What about variable annuities?

Variable annuities, which are essentially mutual funds with added tax deferral benefits, are appropriate for older parents or grandparents who will not be subject to the 10 percent withdrawal penalty at age 59 1/2, or are willing to begin taking payments over their life expectancies before that date. (See also "Annuities in General," in Chapter 7.) Short periods of tax deferral--less than 8 to 10 years--do not usually provide any benefits over taxable mutual funds.