Lives represent the amount of classic games you'll be able to play.
A life will be taken from your account every time you start a game and, if you win, you'll be able to keep it. That is, every time you win a game the life will remain in your account.
If you lose the game, you'll lose that life and you'll have to use another one to start a new classic game.
It's important to know that you'll only be able to use one life per game. This means that, if you lose, you won't be able to use another life and you'll have to start a new game.