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Future Policy Benefits | 9 Months Ended
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Sep. 30, 2025
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] |
Future Policy Benefits | (11) Future Policy Benefits The following tables summarize balances and changes in the present value of expected net premiums and the present value of expected future policy benefits underlying the LFPB:
|  | Nine months ended |  |  | Year ended |
|  | September 30, 2025 |  |  | December 31, 2024 |
|  | (Dollars in thousands) |
Present Value of Expected Net Premiums |  | Term Life Insurance |
Balance at then current discount rate, beginning of period |  | $ | 13,854,794 |  |  | $ | 13,977,353 |
Balance at original discount rate, beginning of period |  |  | 14,233,996 |  |  |  | 14,012,553 |
Effect of changes in cash flow assumptions |  |  | (354,522 | ) |  |  | (74,233 | )
Effect of actual variances from expected experience |  |  | (307,049 | ) |  |  | (373,646 | )
Adjusted balance, beginning of period |  |  | 13,572,425 |  |  |  | 13,564,674 |
Issuances |  |  | 1,268,255 |  |  |  | 1,884,054 |
Interest accrual at original discount rate |  |  | 472,864 |  |  |  | 608,588 |
Net premiums collected |  |  | (1,328,106 | ) |  |  | (1,733,262 | )
Foreign currency translation |  |  | 32,288 |  |  |  | (90,058 | )
Expected net premiums at original discount rate, end of period |  |  | 14,017,726 |  |  |  | 14,233,996 |
Effect of changes in discount rate assumptions |  |  | 47,455 |  |  |  | (379,202 | )
Expected net premiums at then current discount rate, end of period |  | $ | 14,065,181 |  |  | $ | 13,854,794 |
Present Value of Expected Future Policy Benefits |  |  |  |  |  |
Balance at then current discount rate, beginning of period |  | $ | 20,155,487 |  |  | $ | 20,508,435 |
Balance at original discount rate, beginning of period |  |  | 20,763,900 |  |  |  | 20,391,694 |
Effect of changes in cash flow assumptions |  |  | (436,663 | ) |  |  | (83,975 | )
Effect of actual variances from expected experience |  |  | (333,555 | ) |  |  | (386,512 | )
Adjusted balance, beginning of period |  |  | 19,993,682 |  |  |  | 19,921,207 |
Issuances |  |  | 1,272,194 |  |  |  | 1,892,529 |
Interest accrual at original discount rate |  |  | 720,798 |  |  |  | 929,078 |
Benefit payments |  |  | (1,393,709 | ) |  |  | (1,841,162 | )
Foreign currency translation |  |  | 49,605 |  |  |  | (137,752 | )
Expected future policy benefits at original discount rate, end of period |  |  | 20,642,570 |  |  |  | 20,763,900 |
Effect of changes in discount rate assumptions |  |  | 32,085 |  |  |  | (608,413 | )
Expected future policy benefits at then current discount rate, end of period |  | $ | 20,674,655 |  |  | $ | 20,155,487 |
LFPB |  | $ | 6,609,474 |  |  | $ | 6,300,693 |
Less: reinsurance recoverables |  |  | 2,581,440 |  |  |  | 2,729,022 |
Net LFPB, after reinsurance recoverables |  | $ | 4,028,034 |  |  | $ | 3,571,671 |
Weighted-average duration of net LFPB (in years) |  |  | 8.2 |  |  |  | 8.0 |
During the three months ended September 30, 2025 and 2024, we recognized remeasurement gains of approximately $23 million and $28 million for the Term Life Insurance segment, respectively, with corresponding decreases to the LFPB, net of reinsurance. The remeasurement gains reflected changes to the actuarial cash flow assumptions underlying the LFPB estimate, net of reinsurance, based on our annual assumption reviews of approximately $18 million and $28 million for the three months ended September 30, 2025 and 2024, respectively, and realized experience variances of approximately $5 million and less than $1 million during the three months ended September 30, 2025 and 2024, respectively. Our annual actuarial assumption review was performed during the third quarter of 2025 and included analyzing experience studies based on the Company’s own data and comparing actual to expected cash flow variances by policy cohort. Actuarial judgment was also used since prior historical experience may not fully reflect future expected experience. We have generally observed lower actual mortality experience compared to the actuarial assumptions in our Term Life Insurance segment since mid-2022. We believe part of the favorable experience is a pull-forward effect where certain deaths accelerated during the pandemic resulting in a future period of lower mortality. However, the level of our favorable mortality has not subsided, which indicates that certain mortality assumptions may be higher than necessary. As such, we decreased our mortality assumption for level premium term policies sold in Canada, along with a portion of policies sold in both the U.S. and Canada that continue or exchange their policies after the end of the level premium term period. The decrease in the mortality assumption was the largest contributor to the remeasurement gain recognized for LFPB assumption changes during the three months ended September 30, 2025. Since 2023, we have also generally observed higher lapse rates compared to our actuarial assumption for policies sold in the U.S. that are within the level premium term period. However, we believe this is temporary due to current economic conditions, and that lapse rates will gradually return to our historical normalized levels. During our 2024 assumption review, we made changes to our early duration lapse rate assumption for U.S. cohorts to reflect recent lapse experience. In the current year assumption review, in accordance with our best estimates, we did not make further changes to these lapse assumptions. If our early duration lapse experience does not revert back to our best estimate assumptions as forecasted, we could recognize experience variances in subsequent periods but do not expect the magnitude to be significant to our LFPB. During the three and nine months ended September 30, 2025, the remeasurement gains recognized for experience variances are primarily attributable to both lower mortality and higher policy lapse rates as described above. In 2024, the remeasurement gain recognized for the Term Life Insurance segment for assumption changes made during our annual review was mainly due to an assumption change to reduce incidence rates for the waiver of premium benefit offered as an optional supplemental rider on our term life insurance policies that waives the policyholder’s insurance premiums during a qualifying disability. During our 2025 assumption review, we did not observe any significant variances between recent waiver of premium disability claims when compared with the assumption changes that were made in 2024. As such, no further changes were considered necessary to the disability claims assumptions used in the LFPB during the 2025 period. We also performed our annual reviews of LFPB assumptions for our closed block of non-term life insurance included in the Corporate and Other Distributed Products segment. Based on these reviews, we recognized a remeasurement loss of less than $1 million and a remeasurement loss of approximately $5 million during the three months ended September 30, 2025 and 2024, respectively. Discount rates, while a material assumption to our LFPB, are not part of the assumption-setting process since they are updated quarterly based on observable rates. There have been no changes in the compilation of data sources used for this input. Losses recognized as a result of capping the net premium ratio at 100% were immaterial during the three and nine months ended September 30, 2025 and 2024. The following table reconciles the LFPB to the unaudited condensed consolidated balance sheets:
|  | September 30, 2025 |  |  | December 31, 2024 |
|  | (In thousands) |
Term Life Insurance |  | $ | 6,609,474 |  |  | $ | 6,300,693 |
Other |  |  | 207,304 |  |  |  | 202,371 |
Total |  | $ | 6,816,778 |  |  | $ | 6,503,064 |
The following table reconciles the reinsurance recoverables to the unaudited condensed consolidated balance sheets:
|  | September 30, 2025 |  |  | December 31, 2024 |
|  | (In thousands) |
Term Life Insurance |  | $ | 2,581,440 |  |  | $ | 2,729,022 |
Other |  |  | 15,157 |  |  |  | 15,143 |
Total |  | $ | 2,596,597 |  |  | $ | 2,744,165 |
The amount of discounted (using the then current discount rate) and undiscounted expected gross premiums and expected future benefit payments were as follows:
| September 30, 2025 |  |  | December 31, 2024 |
| (In thousands) |
Term Life Insurance |  |
| Undiscounted |  |  | Discounted |  |  | Undiscounted |  |  | Discounted |
Expected future benefit payments | $ | 33,841,648 |  |  | $ | 20,674,656 |  |  | $ | 33,966,483 |  |  | $ | 20,155,489 |
Expected future gross premiums | $ | 39,267,157 |  |  | $ | 27,188,836 |  |  | $ | 39,389,917 |  |  | $ | 26,414,010 |
The amount of revenue and interest recognized in our unaudited condensed consolidated statements of income were as follows:
| Three months ended September 30, |  |  | Nine months ended September 30, |
| 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
| (In thousands) |
Term Life Insurance |  |  |  |  |
Gross premiums | $ | 864,047 |  |  | $ | 847,626 |  |  | $ | 2,580,396 |  |  | $ | 2,524,615 |
Interest accretion (expense) | $ | (83,320 | ) |  | $ | (80,375 | ) |  | $ | (247,934 | ) |  | $ | (239,220 | )
The weighted-average discount rates were as follows:
| September 30, 2025 |  |  | December 31, 2024 |
Term Life Insurance |  |  |  |  |
Original discount rate |  | 5.02 | % |  |  | 4.95 | %
Current discount rate |  | 5.65 | % |  |  | 5.69 | %
There were no changes to the methods used to determine the discount rates during the nine months ended September 30, 2025 and the twelve months ended December 31, 2024.

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