v3.26.1
Future Policy Benefits
 3 Months Ended
Mar. 31, 2026
Liability for Future Policy Benefit, after Reinsurance [Abstract]  
Future Policy Benefits (8) Future Policy Benefits
The following table sets forth our liability for future policy benefits as of the dates indicated:
(Amounts in millions)March 31, 2026December 31, 2025
Long-term care insurance$42,378 $43,157 
Life insurance1,416 1,467 
Fixed annuities10,127 10,437 
Total long-duration insurance contracts53,921 55,061 
Deferred profit liability134 136 
Cost of reinsurance27 31 
Total future policy benefits$54,082 $55,228 
The following tables present the balances of and changes in the liability for future policy benefits as of and for the periods indicated:
March 31, 2026
(Dollar amounts in millions)Long-term
care insurance		Life
insurance		Fixed
annuities
Present value of expected net premiums:
Beginning balance as of January 1$16,480 $3,499 $— 
Beginning balance, at original discount rate$16,411 $3,396 $— 
Effect of changes in cash flow assumptions15 — — 
Effect of actual variances from expected experience14 4 — 
Adjusted beginning balance16,440 3,400 — 
Issuances— — 9 
Interest accretion207 47 — 
Net premiums collected (1)
(462)(99)(9)
Derecognition (lapses and withdrawals)— — — 
Other— — — 
Ending balance, at original discount rate16,185 3,348 — 
Effect of changes in discount rate assumptions(164)42 — 
Ending balance as of March 31$16,021 $3,390 $— 
Present value of expected future policy benefits:
Beginning balance as of January 1$59,634 $4,354 $10,437 
Beginning balance, at original discount rate$60,539 $4,191 $9,193 
Effect of changes in cash flow assumptions(2)— — 
Effect of actual variances from expected experience50 24 (28)
Adjusted beginning balance60,587 4,215 9,165 
Issuances— — 9 
Interest accretion818 55 151 
Benefit payments(925)(173)(232)
Derecognition (lapses and withdrawals)— — — 
Other— — 2 
Ending balance, at original discount rate60,480 4,097 9,095 
Effect of changes in discount rate assumptions(2,083)103 1,032 
Ending balance as of March 31$58,397 $4,200 $10,127 
Net liability for future policy benefits, before flooring adjustments$42,376 $810 $10,127 
Flooring adjustments (2)
2 606 — 
Net liability for future policy benefits42,378 1,416 10,127 
Less: reinsurance recoverable7,542 678 7,841 
Net liability for future policy benefits, net of reinsurance recoverable$34,836 $738 $2,286 
Weighted-average liability duration (years)11.35.510.3
______________
(1)Represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments.
(2)Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases.
December 31, 2025
(Dollar amounts in millions)Long-term
care insurance		Life
insurance		Fixed
annuities
Present value of expected net premiums:
Beginning balance as of January 1$17,315 $3,690 $— 
Beginning balance, at original discount rate$17,625 $3,640 $— 
Effect of changes in cash flow assumptions(183)— — 
Effect of actual variances from expected experience(32)(41)— 
Adjusted beginning balance17,410 3,599 — 
Issuances1 — 38 
Interest accretion874 197 — 
Net premiums collected (1)
(1,874)(401)(38)
Derecognition (lapses and withdrawals)— — — 
Other— 1 — 
Ending balance, at original discount rate16,411 3,396 — 
Effect of changes in discount rate assumptions69 103 — 
Ending balance as of December 31$16,480 $3,499 $— 
Present value of expected future policy benefits:
Beginning balance as of January 1$58,487 $4,741 $10,695 
Beginning balance, at original discount rate$60,587 $4,645 $9,568 
Effect of changes in cash flow assumptions103 — (66)
Effect of actual variances from expected experience336 (9)3 
Adjusted beginning balance61,026 4,636 9,505 
Issuances1 — 34 
Interest accretion3,280 239 617 
Benefit payments(3,768)(683)(963)
Derecognition (lapses and withdrawals)— — — 
Other— (1)— 
Ending balance, at original discount rate60,539 4,191 9,193 
Effect of changes in discount rate assumptions(905)163 1,244 
Ending balance as of December 31$59,634 $4,354 $10,437 
Net liability for future policy benefits, before flooring adjustments$43,154 $855 $10,437 
Flooring adjustments (2)
3 612 — 
Net liability for future policy benefits43,157 1,467 10,437 
Less: reinsurance recoverable7,728 702 8,074 
Net liability for future policy benefits, net of reinsurance recoverable$35,429 $765 $2,363 
Weighted-average liability duration (years)11.55.610.4
______________
(1)Represents the portion of gross premiums collected from policyholders that is used to fund expected benefit payments.
(2)Flooring adjustments are necessary when a cohort’s present value of future net premiums exceeds the present value of future benefits. The flooring adjustment ensures that the liability for future policy benefits for each cohort is not less than zero. This adjustment is most prevalent in our term life insurance products due to their product design of a level premium period followed by annual premium rate increases.
Long-term care insurance
For the three months ended March 31, 2026, the impact of changes in cash flow assumptions resulted in a decrease of $17 million in the liability for future policy benefits due to favorable updates related to approval amounts of in-force rate actions on fully reinsured blocks of business, partially offset by unfavorable updates related to approval and implementation timing of in-force rate actions. The favorable impact of cash flow assumption updates on fully reinsured blocks was more than offset in net income (loss) by the unfavorable assumption updates on the retained blocks of business. The impact of actual variances from expected experience resulted in an increase of $36 million in the liability for future policy benefits. This increase was primarily due to higher claims and lower terminations, partially offset by $23 million of net insurance recoveries related to cash payments made to policyholders in connection with a prior legal settlement.
In the fourth quarter of 2025, we completed our annual review of cash flow assumptions including benefit utilization, expected claim incidence, terminations and benefit reductions related to in-force rate actions, among other assumptions. The impact of changes in cash flow assumptions during the year ended December 31, 2025 resulted in an increase of $286 million in the liability for future policy benefits primarily driven by higher expected benefit utilization reflecting near-term experience related to cost of care inflation and unfavorable updates to our healthy life assumptions to better align with recent mortality and incidence trends. This was partially offset by favorable assumption updates reflecting in-force rate action approval experience and benefit reductions as well as favorable claim termination assumption updates. Our healthy life and claim termination assumption updates incorporated trends following the coronavirus pandemic. The impact of actual variances from expected experience during the year ended December 31, 2025 resulted in an increase of $368 million in the liability for future policy benefits. This increase was primarily due to higher claims and lower terminations, partially offset by a $26 million gain related to a third-party recapture of a block of long-term care insurance policies. The unfavorable impacts of cash flow assumption updates and actual variances from expected experience were partially offset in net income (loss) as a portion of the updates and lower termination experience was related to fully reinsured blocks of business.
Life insurance
For the three months ended March 31, 2026, the impact of actual variances from expected experience resulted in an increase of $20 million in the liability for future policy benefits primarily due to overall unfavorable mortality experience.
There were no significant cash flow assumption changes in the fourth quarter of 2025. The impact of actual variances from expected experience during the year ended December 31, 2025 resulted in an increase of $32 million in the liability for future policy benefits primarily due to unfavorable mortality experience.
Fixed annuities
For the three months ended March 31, 2026, the impact of actual variances from expected experience resulted in a decrease of $28 million in the liability for future policy benefits primarily due to favorable mortality.
In the fourth quarter of 2025, we completed our annual review of cash flow assumptions and decreased our liability for future policy benefits by $66 million primarily as a result of favorable updates to our mortality assumptions. These favorable impacts were partially offset in net income (loss) as a portion of the updates was related to reinsured blocks of business.
The following table provides the weighted-average interest rates for the liability for future policy benefits as of the dates indicated:
March 31, 2026December 31, 2025
Long-term care insurance
Interest accretion (locked-in) rate5.7%5.7%
Current discount rate5.6%5.4%
Life insurance
Interest accretion (locked-in) rate5.7%5.7%
Current discount rate5.1%5.0%
Fixed annuities
Interest accretion (locked-in) rate6.8%6.8%
Current discount rate5.7%5.5%
See Note 2—Summary of Significant Accounting Policies included in the Notes to Consolidated Financial Statements in our 2025 Annual Report on Form 10-K for additional information related to the discount rate used to measure the liability for future policy benefits.
The following table sets forth the amount of undiscounted and discounted expected future gross premiums and expected future benefit payments as of the dates indicated:
March 31, 2026December 31, 2025
(Amounts in millions)UndiscountedDiscountedUndiscountedDiscounted
Long-term care insurance
Expected future gross premiums$32,188 $22,248 $32,824 $22,941 
Expected future benefit payments$115,496 $58,397 $116,322 $59,634 
Life insurance
Expected future gross premiums$8,952 $5,052 $9,129 $5,236 
Expected future benefit payments$5,611 $4,200 $6,042 $4,354 
Fixed annuities
Expected future gross premiums$— $— $— $— 
Expected future benefit payments$21,522 $10,127 $21,791 $10,437 
During the three months ended March 31, 2026, we recorded a charge of $1 million to net income (loss) due to expected benefits exceeding expected gross premiums, resulting in net premium ratios capped at 100% for certain cohorts in our life insurance products primarily due to higher claim severity.
The following table sets forth the amount of revenue and interest accretion (expense) recognized in net income (loss) related to our liability for future policy benefits for the periods indicated:
Three months ended March 31,Year ended
20262025December 31, 2025
(Amounts in millions)Gross
premiums
Interest accretion (1)
Gross
premiums
Interest accretion (1)
Gross
premiums
Interest accretion (1)
Long-term care insurance$623 $611 $619 $598 $2,544 $2,406 
Life insurance145 8 155 12 597 42 
Fixed annuities— 151 — 156 — 617 
Total$768 $770 $774 $766 $3,141 $3,065 
______________
(1)Amounts for interest accretion are included in benefits and other changes in policy reserves in the condensed consolidated statements of operations.