Since the average life expectancy is on the increase because of higher and sophisticated standards of living. Lifetime annuities are mainly for funding retirement. There are two types of lifetime annuities -- fixed and variable.

A very important investment option available for those people who are looking for retirement savings is variable annuities. The companies offering variable annuities invest through the sale of annuities in stocks, bonds, real estate or money markets. These variable annuities offer deferral tax savings by using an insurance policy. The main benefit of this variable annuity is that any income like capital gains or the interest on the underlying investment amount is not subjected to tax.

Another retirement benefit is annuity income during an entire life period, which is called annuitization. When the claimant dies, the beneficiary receives the balance left in the account. Moreover, the holder of the variable annuity has the guaranteed payment of the full principal amount upon death to the extent of insurance portion covered by the account. This is in spite of the lower market value at that particular point in time. However if the annuity holder receives the payment upon death, then it may not be beneficial if the investment was planned for retirement

Annuities retirement plans like TIAA-CREF offer lifetime incomes that can be paid to both the annuitant and the annuity partner, if it is two-life annuity. The annuitant has the benefit of systematic cash withdrawals during the annuity period. The annuity holder can annuitize a portion of the accumulated amount to have some regular income and can switch over to a lifetime income option later on. If the annuitant wishes to exchange the annuity (cashing the retirement annuities), it is advisable not to dispose of it, as it is purely retirement benefit oriented. If an annuitant decides to exchange the annuity, a brokers or insurance agents should be contacted to get a complete idea about the financial consequences of the exchange.