In the long run, the tax hit is the same no matter how you look at it. A big hit now vs a bunch of little hits along the way. Except for the fact that a lump sum like that may put you in a much higher bracket.
If you don't need the money now, you can always roll it into a different contract (tax free 1035 exchange). That all depends on your age and a few other specific details.
It really just depends on what you have planned for the money.
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