UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

[ ☒ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

or

[ ☐ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to                             

Commission file number: 001-08052

GLOBE LIFE INC.

(Exact name of registrant as specified in its charter)

Delaware						63-0780404
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
3700 South Stonebridge Drive, McKinney, TX						75070
(Address of principal executive offices)						(Zip Code)

972-569-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, $1.00 par value per share			GL			New York Stock Exchange
4.250% Junior Subordinated Debentures			GL PRD			New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:     None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     

Yes  x     No   ¨    

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨       No x   

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     

Yes  x       No ¨   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  x       No ¨   

GL 2021 FORM 10-K

---

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.:

Large accelerated filer

x

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

¨

Emerging growth company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

¨

Indicate by checkmark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.                       x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐    No  x

As of June 30, 2021, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $9.5 billion based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class						Outstanding as of February 16, 2022
Common Stock, $1.00 par value per share						99,338,401 shares

DOCUMENTS INCORPORATED BY REFERENCE

Document						Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders to be held on April 28, 2022 (Proxy Statement)						Part III

GL 2021 FORM 10-K

---

Table of Contents

Globe Life Inc.

Table of Contents

									Page
PART I.
			Item 1.			Business			1
			Item 1A.			Risk Factors			9
			Item 1B.			Unresolved Staff Comments			16
			Item 2.			Properties			16
			Item 3.			Legal Proceedings			16
			Item 4.			Mine Safety Disclosures			16
PART II.
			Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			17
			Item 6.			[Reserved]
						Cautionary Statements			19
			Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
			Item 7A.			Quantitative and Qualitative Disclosures about Market Risk			53
			Item 8.			Financial Statements and Supplementary Data			53
						Consolidated Balance Sheets			56
						Consolidated Statements of Operations			57
						Consolidated Statements of Comprehensive Income			58
						Consolidated Statements of Shareholders' Equity			59
						Consolidated Statements of Cash Flows			60
						Notes to Consolidated Financial Statements			61
						Note 1—Significant Accounting Policies			61
						Note 2—Statutory Accounting			73
						Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income			74
						Note 4—Investments			76
						Note 5—Deferred Acquisition Costs			90
						Note 6—Commitments and Contingencies			91
						Note 7—Liability for Unpaid Claims			94
						Note 8—Income Taxes			95
						Note 9—Postretirement Benefits			97
						Note 10—Supplemental Disclosures of Cash Flow Information			103
						Note 11—Debt			104
						Note 12—Shareholders' Equity			106
						Note 13—Stock-Based Compensation			107
						Note 14—Business Segments			112
			Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			119
			Item 9A.			Controls and Procedures			119
			Item 9B.			Other Information			122
			Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			122
PART III.
			Item 10.			Directors, Executive Officers, and Corporate Governance			122
			Item 11.			Executive Compensation			122
			Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			122
			Item 13.			Certain Relationships and Related Transactions and Director Independence			123
			Item 14.			Principal Accountant Fees and Services			123
PART IV.
			Item 15.			Exhibits and Financial Statement Schedules			123
						Signatures			134

GL 2021 FORM 10-K

---

Table of Contents

Part I

Item 1. Business

Globe Life and the Company refer to Globe Life Inc., an insurance holding company incorporated in Delaware in 1979, and its subsidiaries and affiliates. Its primary subsidiaries are Globe Life And Accident Insurance Company, American Income Life Insurance Company, Liberty National Life Insurance Company, Family Heritage Life Insurance Company of America, and United American Insurance Company.

Globe Life's website is: www.globelifeinsurance.com. Globe Life makes available free of charge through its website, its annual report on Form 10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after they have been electronically filed with or furnished to the Securities and Exchange Commission. Other information included in Globe Life's website is not incorporated into this filing.

 

1

GL 2021 FORM 10-K

---

Table of Contents

The following table presents Globe Life's business by primary marketing distribution method. Additional information concerning industry segments may be found in Management’s Discussion and Analysis and in Note 14—Business Segments within the Notes to the Consolidated Financial Statements.

Primary Distribution Method

Underwriting Company

Products and Target Markets

Distribution

Direct to Consumer Division

Globe Life And Accident Insurance Company McKinney, Texas

Individual life and supplemental health insurance including juvenile and senior life coverage and Medicare Supplement to lower middle-income to middle-income Americans.

Nationwide distribution through direct to consumer channels: including direct mail, electronic media, and insert media.

American Income Life Division

American Income Life Insurance Company Waco, Texas

Individual life and supplemental health insurance marketed to working families.

9,415 producing agents in the U.S., Canada, and New Zealand.

Liberty National Division

Liberty National Life Insurance Company McKinney, Texas

Life and supplemental health insurance distributed through in-home and worksite channels.

2,804 producing agents in the U.S.

Family Heritage Division

Family Heritage Life Insurance Company of America Cleveland, Ohio

Supplemental limited-benefit health insurance to lower middle-income to middle-income families.

1,157 producing agents in the U.S.

United American Division

United American Insurance Company McKinney, Texas

Medicare Supplement coverage to Medicare beneficiaries and, to a lesser extent, supplemental limited-benefit health coverage to people under age 65.

3,716 independent producing agents in the U.S.

2

GL 2021 FORM 10-K

---

Table of Contents

Insurance

Life Insurance

 

The distribution channels for life insurance products include direct to consumer, exclusive agents, and independent agents. These methods are described in greater detail within the primary marketing distribution channel chart as seen above. The following table presents annualized premium in force for the three years ended December 31, 2021 by distribution method:

			Annualized Premium in Force(1) (Dollar amounts in thousands)
			2021						2020						2019
Direct to Consumer			$	929,197					$	881,012					$	831,739
Exclusive agents:
American Income			1,458,408						1,325,293						1,220,483
Liberty National			341,332						318,545						309,792
Independent agents:
United American			8,426						9,314						10,211
Other			205,822						205,785						209,403
			$	2,943,185					$	2,739,949					$	2,581,628

(1)See definition of annualized premium in force under Results of Operations in Management's Discussion & Analysis.

Globe Life's insurance subsidiaries write a variety of nonparticipating ordinary life insurance products. These include traditional whole life, term life, and other life insurance. The Company does not currently sell interest-sensitive whole life products. The following tables present selected information about Globe Life's life insurance products.

			Annualized Premium in Force (Dollar amounts in thousands)
			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
Whole life:
Traditional			$	2,011,349					68						$	1,857,106					68						$	1,737,794					67
Interest-sensitive			33,912						1						36,297						1						38,691						2
Term			750,005						26						716,698						26						683,869						26
Other			147,919						5						129,848						5						121,274						5
			$	2,943,185					100						$	2,739,949					100						$	2,581,628					100

			Policy Count and Average Face Amount Per Policy (Dollar amounts in thousands)
			2021												2020												2019
			Policy Count						Average Face Amount per Policy						Policy Count						Average Face Amount per Policy						Policy Count						Average Face Amount per Policy
Whole life:
Traditional			8,963,774						$	15.3					8,717,785						$	14.7					8,477,406						$	14.2
Interest-sensitive			191,536						20.4						199,975						20.3						208,822						20.3
Term			4,731,044						15.3						4,526,172						15.1						4,313,709						14.8
Other			432,372						15.3						408,859						14.3						399,365						13.7
			14,318,726						$	15.3					13,852,791						$	14.9					13,399,302						$	14.5

3

GL 2021 FORM 10-K

---

Table of Contents

Health Insurance

 

The following table presents Globe Life's health insurance annualized premium in force for the three years ended December 31, 2021 by distribution channel.

			Annualized Premium in Force (Dollar amounts in thousands)
			2021						2020						2019
Direct to Consumer			$	74,627					$	77,522					$	78,229
Exclusive agents:
Liberty National			196,783						196,534						197,163
American Income			111,102						104,701						96,447
Family Heritage			363,226						338,309						312,479
Independent agents:
United American			540,340						476,296						454,720
			$	1,286,078					$	1,193,362					$	1,139,038

Globe Life offers Medicare Supplement and limited-benefit supplemental health insurance products that include primarily critical illness and accident plans. These products are designed to supplement health coverage that applicants already own. Medicare Supplements are offered to enrollees in the traditional fee-for-service Medicare program. Medicare Supplement plans are standardized by federal regulation and are designed to pay deductibles and co-payments not paid by Medicare.

The following table presents supplemental health annualized premium in force information for the three years ended December 31, 2021 by product category.

			Annualized Premium in Force (Dollar amounts in thousands)
			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
Limited-benefit plans			$	700,767					54						$	617,759					52						$	581,056					51
Medicare Supplement			585,311						46						575,603						48						557,982						49
			$	1,286,078					100						$	1,193,362					100						$	1,139,038					100

Annuities

 

Annuity products include single-premium and flexible-premium deferred annuities. Annuities in each of the three years ended December 31, 2021, comprised less than 1% of premium. The Company does not currently market annuity products.

Pricing

 

Premium rates for life and health insurance products are established using assumptions as to future mortality, morbidity, persistency, investment income, expenses, and target profit margins. These assumptions are based on Company experience and projected investment earnings rates. Revenues for individual life and health insurance products are primarily derived from premium income, and, to a lesser extent, through policy charges to the policyholder account values on annuity products and certain individual life products. Profitability is affected by actual experience deviations from the established assumptions and to the extent investment income varies from that required for policy reserves.

 

Collections for annuity products and certain life products are not recognized as revenues, but are added to policyholder account values. Revenues from these products are derived from charges to the account balances for insurance risk and administrative costs. Profits are earned to the extent these revenues exceed actual costs. Profits are also earned from investment income in excess of the amounts required for policy reserves.

4

GL 2021 FORM 10-K

---

Table of Contents

Underwriting

 

The underwriting standards of each Globe Life insurance subsidiary are established by management. Each subsidiary uses information obtained from the application and, in some cases, telephone interviews with applicants, including, but not limited to inspection reports, pharmacy data, motor vehicle records, responses to both medical and not medical questions, doctors’ statements and/or medical examinations to determine whether a policy should be issued in accordance with the application, with a different rating, with a rider, with reduced coverage, or rejected.

Reserves

 

The life insurance policy reserves reflected in Globe Life's consolidated financial statements as future policy benefits are calculated based on accounting principles generally accepted in the United States of America (GAAP). These reserves, with future premiums and the associated interest compounded at assumed rates, must be sufficient to cover policy and contract obligations as they mature. Generally, the mortality and persistency assumptions used in the calculations of reserves are based on Company experience. Similar reserves are held on most of the health insurance policies written by Globe Life's insurance subsidiaries, since these policies generally are issued on a guaranteed-renewable basis. The assumptions used in the calculation of Globe Life's reserves are reported in Note 1—Significant Accounting Policies. Reserves for annuity products and certain life products consist of the policyholders’ account values and are increased by policyholder deposits and interest credited and are decreased by policy charges and benefit payments.

Reinsurance

Globe Life has historically participated in very limited third-party reinsurance as a result of the low face amounts of the policies sold by the Company. See Schedule IV and Note 6—Commitments and Contingencies for more information.

Investments

 

The nature, quality, and percentage mix of insurance company investments are regulated by state laws. The investments of Globe Life insurance subsidiaries consist predominantly of high-quality, investment-grade securities. Approximately 94% of our invested assets, at fair value, are fixed maturities at December 31, 2021 (see Note 4—Investments and Management’s Discussion and Analysis).

Competition

 

Globe Life competes with other insurance carriers through policyholder service, price, product design, and sales efforts. While there are insurance companies competing with Globe Life, no individual company dominates any of Globe Life's life or health insurance markets.

 

Globe Life's health insurance products compete with, in addition to the products of other health insurance carriers, health maintenance organizations, preferred provider organizations, and other health care-related institutions which provide medical benefits based on contractual agreements.

 

The Company effectively competes with other carriers, in part, due to its ability to operate at lower policy acquisition and administrative expense levels than peer companies. This allows Globe Life to have competitive rates while maintaining higher underwriting margins.

Regulation

Insurance—Insurance companies are subject to regulation and supervision in the states in which they do business. The laws of the various states establish agencies with broad administrative and supervisory powers which include, among other things, granting and revoking licenses to transact business, regulating trade practices, licensing agents, approving policy forms, approving certain premium rates, setting minimum reserve and loss ratio requirements, determining the form and content of required financial statements, and prescribing the type and amount of investments permitted. Insurance companies are also required to file detailed annual reports with supervisory agencies, and records of their business are subject to examination at any time. Under the rules of the

5

GL 2021 FORM 10-K

---

Table of Contents

National Association of Insurance Commissioners (NAIC), insurance companies are examined periodically by one or more of the supervisory agencies.

Risk-Based Capital (RBC)—The NAIC requires that a risk-based capital formula be applied to all life and health insurers. The risk-based capital formula is a threshold formula rather than a target capital formula. It is designed only to identify companies that require regulatory attention and is not to be used to rate or rank companies that are adequately capitalized. All Globe Life's insurance subsidiaries are more than adequately capitalized under the risk-based capital formula. See further discussion of RBC in Capital Resources.

Holding Company—States have enacted legislation requiring registration and periodic reporting by insurance companies domiciled within their respective jurisdictions that control or are controlled by other corporations so as to constitute a holding company system. Globe Life and its subsidiaries have registered as a holding company system pursuant to such legislation in Indiana, Nebraska, Ohio, and New York.

Insurance holding company system statutes and regulations impose various limitations on investments in subsidiaries, and may require prior regulatory approval for material transactions between insurers and affiliates and for the payment of certain dividends and other distributions.

Environmental, Social, and Governance (ESG)

Globe Life’s sustainable business practices are a driver of the success and longevity that our Company has experienced since its origin. We plan to advance our sustainable business practices by further developing the Company's ESG strategy and disclosures and intend to align with the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Environmental responsibility and sustainability are key components of our overall corporate responsibility efforts. We strive to reduce our impact on the environment by implementing numerous green building initiatives at our corporate facilities, placing a company-wide emphasis on recycling and reducing waste generally, and focusing on efforts to reduce the use of paper and water. With respect to social matters, our focus continues to be on supporting a culture that is inclusive and attractive for all of our employees and independent sales agents. We are committed to maintaining a diverse workforce that reflects the communities in which we work. In addition, to enable the Company to appropriately respond to ESG-related challenges and opportunities, the Company has in place an ESG Committee, and the Board and its committees regularly engage with senior management on relevant ESG-related issues.

Human Capital Management

Globe Life's talent base encompasses a broad range of experience that possesses the depth of critical skills to efficiently and effectively accomplish our business purpose and mission, serve our policyholders, and protect our shareholders' interests. Maintaining superior human capital is a key driver to the success and longevity that our Company has experienced since its origins dating back to the early 1900s. As of December 31, 2021, the Company had 3,222 full time, part-time, and temporary employees. In 2021, our employee headcount decreased by 1% due to normal attrition. The Company engages over 13,000 independently-contracted insurance agents. Refer to Management's Discussion & Analysis for exclusive agent counts.

People, Culture, and Community

At Globe Life, we are united by our mission to—Make Tomorrow Better1 and this starts with our employees and agents. Beyond providing insurance protection for millions of individuals, serving our policyholders and generating financial results for our shareholders, we focus on cultivating a healthy, positive culture and a thriving community within and among our campuses that is inclusive of and attractive for all. Globe Life promotes a diverse work force, where differences are celebrated and inclusiveness is embraced, to better enable our employees to consistently achieve outstanding individual and collective results. Our commitment to diversity starts at the top; of the 11 independent Board members, 45% are women and 18% are racial/ethnic minorities.

1Per the Globe Life Employee Handbook, the Globe Life mission statement is "We help families Make Tomorrow Better by working to protect their financial future."

6

GL 2021 FORM 10-K

---

Table of Contents

As of December 31, 2021 and 2020, the Globe Life employees, (excluding independently-contracted agents) identify as follows:

2021
Ethnicity/Race									Gender									Generations
White			56		%				Female			66		%				Baby Boomers (1946-1964)			20		%
Black or African American			21						Male			34						Gen X (1965-1977)			31
Hispanic or Latino			12															Millennials (1978-1995)			41
Asian			9															Gen Z (1996-2012)			8
American Indian or Alaskan Native			1
Native Hawaiian or Pacific Islander			—
Other or Not Specified			1
Total			100		%							100		%							100		%

2020
Ethnicity/Race									Gender									Generations
White			53		%				Female			67		%				Baby Boomers (1946-1964)			23		%
Black or African American			21						Male			33						Gen X (1965-1977)			31
Hispanic or Latino			11															Millennials (1978-1995)			41
Asian			9															Gen Z (1996-2012)			5
American Indian or Alaskan Native			1
Native Hawaiian or Pacific Islander			—
Other or Not Specified			5
Total			100		%							100		%							100		%

We conduct a confidential survey biennially to give our employees the opportunity to provide candid feedback about their experiences at the Company, including but not limited to, confidence in the Company and leadership, competitiveness of our compensation and benefit package, and departmental relationships. The results are shared with our employees, reviewed by senior leadership, and used to identify areas for improvement and create action plans based on the employee feedback received.

We strive to Make Tomorrow Better, in part by giving financial and service contributions to programs that provide hands-on assistance in the communities where we live, work, serve, and visit. We focus our charitable giving on organizations that support children, families, veterans, and seniors, as well as those that work to ensure people are able to live full, healthy lives. These categories align with our mission to help families make tomorrow better by working to protect their financial future. In 2021, we provided financial support of approximately $2.6 million to organizations within that focus, including charities that support underserved communities, provide scholarships to youth, and advance equity and diversity efforts.

Talent Development

At Globe Life, we believe investing in our employees through training and development is paramount to their success. We have developed a learning ecosystem that includes a multitude of professional development opportunities, including online, self-directed, and instructor-led courses on a variety of topics. An education assistance program is also offered to facilitate growth in an area related to one's current position with the Company.

Health, Safety, and Wellness

We strive to provide a safe and healthy work environment for every employee. We furnish employees with numerous tools and trainings throughout the year to help ensure they have, at their fingertips, the best information to safely engage with co-workers, customers, and third parties. In furtherance of our commitment to our employees, we offer a comprehensive employee benefits package that includes competitive monetary benefits, retirement benefits through a Section 401(k) plan and a qualified pension to eligible employees, fitness center reimbursement,

7

GL 2021 FORM 10-K

---

Table of Contents

paid-time-off (based on years of service), health insurance, dental and vision insurance, employee resource program, health savings and flexible spending accounts, family leave, and tuition assistance.

The Company remains committed to the well-being and safety of its employees, agents, customers, guests, vendors, and shareholders in our resolve to maintain a stable and secure business environment. In response to the COVID-19 pandemic, our crisis management and incident response teams guided the Company through an expedited, yet smooth, transition towards working remotely. We efficiently transitioned approximately 80-85% of the Company's total workforce, excluding agents, to working remotely and continued to operate in a mostly remote capacity throughout 2021, allowing individuals to return to our campuses on a limited and voluntary basis. As we transition out of our pandemic response phase, we will continue to provide our employees flexible workplace options and flexible schedule opportunities, as appropriate by the department and role requirements. The Company successfully transitioned most sales and recruiting of agents to a virtual experience in 2020. Agency operations mostly remained a virtual experience during 2021, providing limited occurrences of in-person exposure. The agency operations will continue to offer both virtual and in-person experiences.

8

GL 2021 FORM 10-K

---

Table of Contents

Item 1A. Risk Factors

 

Risks Related to Our Business

 

The insurance industry is a regulated industry, populated by many public and private companies. We operate in the industry's life and health insurance sectors, each of which has its own set of risks.

Business and Operational Risks

The development and maintenance of our various distribution channels are critical to growth in product sales and profits.

Recruiting, development, and retention of producing agents are critical to support sales growth in our agency operations because our insurance sales are primarily made to individuals, and the face amounts of the life insurance policies sold are typically lower than those of policies sold in higher-income markets. If we do not provide an attractive career opportunity with competitive compensation and that motivates producing agents to increase sales of our products, our growth could be impeded. In addition, a failure to effectively develop new methods of reaching consumers and realizing cost efficiencies in our Direct to Consumer Division business could result in reduced sales and profits.

Our future success depends, in substantial part, on our ability to recruit, hire, motivate, develop and retain highly-skilled insurance personnel. Doing so may be difficult due to many factors, including but not limited to, fluctuations in economic and industry conditions and the effectiveness of our compensation programs and competition among other employers.

Our life insurance products are sold in niche markets. We are at risk should any of these markets diminish.

We have several life distribution channels that focus on distinct market niches, three of which are labor unions, affinity groups, and sales via Direct to Consumer solicitations. Deterioration of our relationships with organized labor or adverse changes in the public’s receptivity to direct to consumer marketing initiatives could negatively affect our life insurance business.

The impact of COVID-19 and related risks could materially affect our results of operations, financial position and/or liquidity.

The effects of the COVID-19 pandemic, and U.S. and international responses, are wide-ranging, costly, disruptive and rapidly changing. The global COVID-19 pandemic has resulted in and is expected to continue to result in significant disruptions in economic activity and financial markets. COVID-19 has directly and indirectly adversely affected the Company and will likely continue to do so for an uncertain period of time. Because of the size and breadth of this pandemic and the impact of related government and regulatory actions, all of the direct and indirect consequences of COVID-19 on the Company are not yet known and may not emerge for some time.

The COVID-19 pandemic subjects the Company to various potential risks that could adversely affect the Company in different ways, including but not limited to the following:

•Reduced sales resulting from potential limitations in the virtual sales and agent recruiting process or reductions in the willingness or ability of consumers to purchase our products;

•Reduced cash flows from lower premiums, higher surrenders and greater than anticipated claim payments;

•Disruptions, delays, and increased costs and risks related to employees working remotely, having limited or no access to our facilities, and experiencing reductions or interruptions of critical or essential services;

•Ratings downgrades, increased bankruptcies and credit spread widening in industries in which we invest in our investment portfolio.

For the year ended December 31, 2021, we recorded approximately $140 million of COVID-19 life claims. This amount includes certain estimates, utilizing accepted actuarial practices, of what management expects the ultimate settlement and claims administration will cost for claims that have occurred by the end of the year, whether known or unknown. Given the great uncertainties associated with COVID-19 and its impact and the limited information

9

GL 2021 FORM 10-K

---

Table of Contents

upon which our current assumptions and assessments have been made, our reserves and the underlying estimated level of claim losses and costs arising from COVID-19 may materially change.

Actual or alleged misclassification of independent contractors at our insurance subsidiaries could result in adverse legal, tax or financial consequences.

A significant portion of our sales agents are independent contractors. Although we believe we have properly classified such individuals, a risk nevertheless exists that a court, the Internal Revenue Service or other authority will take the position that those sales agents are employees. The laws and regulations that govern the status and classification of workers are subject to change and differing interpretations, which we cannot predict.

If there is an adverse determination regarding the classification of some or all of the independent contractors at our insurance subsidiaries by a court or governmental agency, we could incur significant costs with respect to payroll tax liabilities, employee benefits, wage payments, fines, judgments and/or legal settlements, any of which could have a material adverse effect on our business, financial condition and results of operations. In addition, any resulting reclassification could necessitate significant changes in our affected insurance subsidiaries’ business models.

Financial and Strategic Risks

Our investments are subject to market and credit risks. Significant downgrades, delinquencies and defaults in our investment portfolio could potentially result in lower net investment income and increased realized and unrealized investment losses.

Our invested assets are subject to the customary risks of defaults, downgrades and changes in market values. Our investment portfolio consists predominately of fixed maturity and short-term investments, where we are exposed to the risk that individual issuers will not have the ability to make required interest or principal payments. A concentration of these investments in any particular issuer, industry, group of related industries or geographic areas could increase this risk. Factors that may affect both market and credit risks include interest rate levels (consisting of both treasury rate and credit spread), financial market performance, disruptions in credit markets, general economic conditions, legislative changes, particular circumstances affecting the businesses or industries of each issuer and other factors beyond our control.

Additionally, as the majority of our investments are long-term fixed maturities that we typically hold until maturity, a significant increase in interest rates or a market downturn could cause a material temporary decline in the fair value of our fixed investment portfolio, even with regard to performing assets. These declines could cause a material increase in unrealized losses in our investment portfolio. Significant unrealized losses could substantially reduce our capital position and shareholders’ equity. It is possible our investment in certain of these securities with unrealized losses could experience a credit event where an allowance for credit loss is recorded, reducing net income.

 

We cannot be assured that any particular issuer, regardless of industry, will be able to make required interest and principal payments on a timely basis or at all. Significant downgrades or defaults of issuers could negatively impact our risk-based capital ratios, leading to potential downgrades of the Company by rating agencies, potential reduction in future dividend capacity from our insurance subsidiaries, and/or higher financing costs at the Parent Company should additional statutory capital be required.

 

Changes in interest rates could negatively affect income.

Declines in interest rates expose insurance companies to the risk that they will fail to earn the level of interest on investments assumed in pricing products and in setting discount rates used to calculate net policy liabilities, which could have a negative impact on income. Significant decreases in interest rates could result in calls by issuers of investments, where such features are available to issuers. Any such calls could result in a decline in our investment income, as reinvestment of the proceeds would likely be at lower interest rates.

An increase in interest rates could result in certain policyholders surrendering their life or annuity policies for cash, thereby potentially requiring our insurance subsidiaries to liquidate invested assets if other sources of liquidity are not available to meet their obligations. In such a case, realized losses could result from the sale of the invested assets and could adversely affect our statutory income, required capital levels, and results of operations.

10

GL 2021 FORM 10-K

---

Table of Contents

Our ability to fund operations is substantially dependent on available funds from our insurance subsidiaries.

As a holding company with no direct operations, our principal asset is the capital stock of our insurance subsidiaries, which periodically declare and distribute dividends on their capital stock. Moreover, our liquidity, including our ability to pay our operating expenses and to make principal and interest payments on debt securities or other indebtedness owed by us, as well as our ability to pay dividends on our common stock or any preferred stock, depends significantly upon the surplus and earnings of our insurance subsidiaries and the ability of these subsidiaries to pay dividends or to advance or repay funds to us. Other sources of liquidity include a variety of short-term and long-term instruments, including our credit facility, commercial paper, long-term debt, Federal Home Loan Bank,(FHLB) intercompany financing and reinsurance.

The principal sources of our insurance subsidiaries’ liquidity are insurance premiums, as well as investment income, maturities, repayments and other cash flow from our investment portfolio. Our insurance subsidiaries are subject to various state statutory and regulatory restrictions applicable to insurance companies that limit the amount of cash dividends, loans and advances that those subsidiaries may pay to us, including laws establishing minimum solvency and liquidity thresholds. For example, in the states where our companies are domiciled, an insurance company generally may pay dividends only out of its unassigned surplus as reflected in its statutory financial statements filed in that state. Additionally, dividends paid by insurance subsidiaries are restricted based on regulations by their states of domicile. Accordingly, impairments in assets or disruptions in our insurance subsidiaries’ operations that reduce their capital or cash flow could limit or disallow the payment of dividends, a principal source of our cash flow, to us.

 

Changes in laws or regulations in the states in which our companies are domiciled could constrain the ability of our insurance subsidiaries to pay dividends or to advance or repay funds to us in sufficient amounts and at times necessary to pay our debt obligations, corporate expenses, or dividends on our capital stock.

Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs or access capital, as well as affect our cost of capital.

Should interest rates increase in the future, the higher interest expense on any new issued debt may reduce net income. In addition, if the credit and capital markets were to experience significant disruption, uncertainty and instability, these conditions could adversely affect our access to capital. Such market conditions could limit our ability to replace maturing debt obligations in a timely manner or at all and/or access the capital necessary to grow our business.

 

In the unlikely event that current sources of liquidity do not satisfy our needs, we may have to seek additional financing or raise capital. The availability and cost of additional financing or capital depend on a variety of factors such as market conditions, the general availability of credit or capital, the volume of trading activities, the overall availability of credit to the insurance industry and our credit ratings and credit capacity. Additionally, customers, lenders or investors could develop a negative perception of our financial prospects if we were to incur large investment losses or if the level of our business activity decreased due to a market downturn. Our access to funds may also be impaired if regulatory authorities or rating agencies take negative actions against us. If our internal sources of liquidity prove to be insufficient, we may not be able to successfully obtain additional financing on favorable terms or at all. As such, we may be forced to delay raising capital, issue shorter term securities than we would prefer or bear an unattractive cost of capital which could decrease our profitability and significantly reduce our financial flexibility. If so, our results of operations, financial condition, consolidated RBC, and cash flows could be materially negatively affected.

 

Industry Risks

Variations in actual-to-expected rates of mortality, morbidity and persistency could materially negatively affect our results of operations and financial condition.

We establish policy reserves to pay future policyholder benefits. These reserves do not represent an exact calculation of liability, but rather are actuarial estimates based on models and accounting requirements that include many assumptions and projections which are inherently uncertain. The reserve computations involve the exercise of

11

GL 2021 FORM 10-K

---

Table of Contents

significant judgment with respect to investment yields, levels of mortality, morbidity, persistency, and investment yields, as well as the timing of premium and benefit payments. Even though our actuaries continually test actual-to-expected results, actual results may differ significantly from the levels assumed, which could result in increased policy obligations and expenses and thus negatively affect our profit margins and income.

A ratings downgrade or other negative action by a rating agency could materially affect our business, financial condition and results of operations.

Various rating agencies review the financial performance and condition of insurers, including our insurance subsidiaries, and publish their financial strength ratings as indicators of an insurer’s ability to fulfill its contractual obligations. These ratings are important to maintaining public confidence in our insurance products. A downgrade or other negative action by a rating agency with respect to the financial strength ratings of our insurance subsidiaries could negatively affect us by limiting or restricting the ability of our insurance subsidiaries to pay dividends to us and reducing our sales by adversely affecting our ability to sell insurance products through independent insurance agencies.

The supplemental health insurance market is subject to substantial regulatory scrutiny.

Regulatory changes could impact our Medicare Supplement and other supplemental health business. The nature and timing of any such changes cannot be predicted and could have a material adverse effect on our supplemental health insurance business.

Obtaining timely and appropriate premium rate increases for certain supplemental health insurance policies is critical.

A significant percentage of the supplemental health insurance premiums that our insurance subsidiaries earn is from Medicare Supplement insurance. Medicare Supplement insurance, including conditions under which the premiums for such policies may be increased, is highly regulated at both the state and federal level. As a result, our Medicare Supplement business is characterized by lower profit margins than life insurance and requires strict administrative discipline and economies of scale for success. Since Medicare Supplement policies are coordinated with the federal Medicare program, which experiences health care inflation every year, annual premium rate increases for the Medicare Supplement policies are typically necessary. Accordingly, the inability of our insurance subsidiaries to obtain approval of appropriate premium rate increases for supplemental health insurance plans in a timely manner from state insurance regulatory authorities could adversely impact their profitability and thus our business, financial condition and results of operations.

Our business is subject to the risk of the occurrence of catastrophic events that could adversely affect our financial condition or operations.

Our insurance policies are issued to and held by a large number of policyholders throughout the United States in relatively low-face amounts. Accordingly, it is unlikely that a large portion of our policyholder base would be affected by a single natural disaster. However, our insurance operations could be exposed to the risk of catastrophic mortality or morbidity caused by events such as a pandemic, hurricane, earthquake, or man-made catastrophes, including acts of terrorism or war, which may produce significant claims in larger areas, especially those that are heavily populated. Claims resulting from natural or man-made catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially reduce our profitability or harm our financial condition.

Our life and health insurance products are particularly exposed to risks of catastrophic mortality, such as a pandemic or other events that result in a large number of deaths. In addition, the occurrence of such an event in a concentrated geographic area could have a severe disruptive effect on our workforce and business operations. The likelihood and severity of such events cannot be predicted and are difficult to estimate. In such an event, the impact to our operations could have a material adverse impact on our ability to conduct business and on our results of operations and financial condition, particularly if those problems affect employees performing operations tasks and supporting computer-based data processing, or destroy the capability to transmit, store, and retrieve valuable data. In addition, in the event that a significant number of our management were unavailable following a disaster, our strategic plan could be negatively impacted.

12

GL 2021 FORM 10-K

---

Table of Contents

Our business is subject to the risk of direct or indirect effects of climate change.

Climate change may increase the frequency and severity of weather-related natural disasters and pandemics, which may adversely impact our mortality and morbidity rates and disrupt our business operations. In addition, climate change and climate change regulation may affect the prospects of companies and other entities whose securities we hold, or our willingness to continue to hold their securities. Climate change may also influence investor sentiment with respect to the Company and investments in our portfolio. We cannot predict how legal, regulatory and social responses to concerns around climate change may impact our business.

Legal, Regulatory, and Compliance Risks

Our businesses are heavily regulated and changes in regulation may reduce our profitability and growth.

Insurance companies, including our insurance subsidiaries, are subject to extensive supervision and regulation in the states in which they do business. The primary purpose of this supervision and regulation is the protection of policyholders, not investors. Regulatory agencies have broad administrative power over numerous aspects of our business, including premium rates and other terms and conditions included in the insurance policies offered by our insurance subsidiaries, marketing practices, advertising, agent licensing, policy forms, capital adequacy, solvency, reserves and permitted investments. Also, regulatory authorities have relatively broad discretion to grant, renew or revoke licenses or approvals. The insurance laws, regulations and policies currently affecting our companies may change at any time, possibly having an adverse effect on our business. Should regulatory changes occur, we may be unable to maintain all required licenses and approvals, or fully comply with the wide variety of applicable laws and regulations or the relevant authority’s interpretation of such laws and regulations. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend some or all of our business activities and/or impose substantial fines.

 

Changes in U.S. federal income tax law could increase our tax costs or negatively impact our insurance subsidiaries' capital.

Changes to the Internal Revenue Code, administrative rulings, or court decisions affecting the insurance industry, including the products insurers offer, could increase our effective tax rate and lower our net income, adversely impact our insurance subsidiaries' capital, or limit the ability of our insurance subsidiaries to sell certain of their products.

 

Changes in accounting standards issued by accounting standard-setting bodies may affect our financial statements, reduce our reported profitability and change the timing of profit recognition.

Our financial statements are subject to the application of GAAP and accounting practices as promulgated by the National Association of Insurance Commissioners’ statutory accounting practices (NAIC SAP), which principles are periodically revised and/or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards or guidance issued by recognized authoritative bodies. Future accounting standards that we are required to adopt could change the current accounting treatment that we apply to our consolidated financial statements. These changes including underlying assumptions, projections, estimates or judgments/interpretations by management, could have a material adverse effect on our business, financial condition and results of operations. (Refer to Note 1— Significant Accounting Policies under the caption Accounting Pronouncements Yet to be Adopted)

Non-compliance with laws or regulations related to customer and consumer privacy and information security, including a failure to ensure that our business associates with access to sensitive customer and consumer information maintain its confidentiality, could materially adversely affect our reputation and business operations.

The collection, maintenance, use, disclosure and disposal of personally identifiable information by our insurance subsidiaries are regulated at the international, federal and state levels. Applicable laws and rules are subject to change by legislation or administrative or judicial interpretation. Various state laws address the use and disclosure of personally identifiable information to the extent they are more restrictive than those contained in the privacy and security provisions in the federal Gramm-Leach-Bliley Act of 1999 (GLBA), the Health Information Technology for

13

GL 2021 FORM 10-K

---

Table of Contents

Economic and Clinical Health Act (HITECH), and in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA also requires that we impose privacy and security requirements on our business associates (as that term is defined in the HIPAA regulations). Noncompliance with any privacy laws, whether by us or by one of our business associates, could have a material adverse effect on our business, reputation and results of operations and could result in material fines and penalties, various forms of damages, consent orders regarding our privacy and security practices, adverse actions against our licenses to do business, and injunctive relief.

General Risk Factors

The failure to maintain effective and efficient information systems at the Company could compromise data security, thereby adversely affecting our financial condition and results of operations.

Our business is highly dependent upon the internet, third-party service providers, and information systems to operate in an efficient and resilient manner. We gather and maintain data for the purpose of conducting marketing, actuarial analysis, sales and policy administration functions.

Malicious third-parties, employee or agent errors or disasters affecting our information systems could impair our business operations, regulatory compliance and financial condition. Employee or agent malfeasance or errors in the handling of our information systems may result in unauthorized access to customer or proprietary information, or an inability to use our information systems to efficiently support business operations.

More frequent and sophisticated cyberattacks and more impactful regulatory oversight models could result in additional costs to protect against security breaches. Any breach of confidential information systems resulting from the above factors could damage our reputation in the marketplace, deter potential customers from purchasing our products, result in the loss of existing customers, subject us to significant civil and criminal liability, constrain cash flows, or require us to incur significant technical, legal or other expenses.

The failure to effectively maintain and modernize our information technology systems and infrastructure could adversely affect our business.

Our ability to modernize our information technology systems and infrastructure requires us to commit to significant resources, effective planning, and execution. In addition, due to the highly regulated nature of the insurance industry, we must continually implement new technology or adapt existing technology to meet compliance requirements of new and proposed regulations. Should we be unable to implement these innovations effectively, efficiently, or in a timely manner, it could result in poor customer experience, additional expenses, reputational harm, legal, and regulatory actions and other adverse consequences. This could also result in the inability to effectively support business operations.

Damage to the brand and reputation of Globe Life or its subsidiaries could affect our ability to conduct business.

Negative publicity through traditional media, internet, social media and other public forums could damage our brand or reputation and adversely impact our agent recruiting efforts, the ability to market our products and the persistency of in-force policies. The Company could be subjected to adverse publicity in the event of a significant security breach.

14

GL 2021 FORM 10-K

---

Table of Contents

We may fail to meet expectations relating to environmental, social, and governance standards and practices.

Certain existing or potential investors, customers and regulators evaluate our business or other practices according to a variety of environmental, social and governance (“ESG”) standards and expectations. Certain of our regulators have proposed or adopted, or may propose or adopt, ESG rules or standards that would apply to our business. Our practices may be judged by ESG standards that are continually evolving and not always clear. Prevailing ESG standards and expectations may also reflect contrasting or conflicting values or agendas. We may fail to meet our commitments or targets, and our policies and processes to evaluate and manage ESG standards in coordination with other business priorities may not prove completely effective or satisfy investors, customers, regulators, or others. For example, as we consider the recommendations of SASB, TCFD, and develop our own ESG materiality assessment, we may continue to expand our disclosures in these areas. Our failure to report accurately or achieve progress on our metrics on a timely basis, or at all, could adversely affect our reputation, business, financial performance and growth. We may face adverse regulatory, investor, customer, media, or public scrutiny leading to business, reputational, or legal challenges.

15

GL 2021 FORM 10-K

---

Table of Contents

Item 1B. Unresolved Staff Comments

 

As of December 31, 2021, Globe Life had no unresolved SEC staff comments.

Item 2. Properties

 

Globe Life, through its subsidiaries, owns or leases buildings that are used in the normal course of business. Globe Life owns and occupies approximately 500,000 combined square feet in McKinney, Texas (headquarters) and at the Waco, Texas and Oklahoma City, Oklahoma campuses. Additionally, the Company leases other buildings across the U.S.

Item 3. Legal Proceedings

Discussion regarding litigation and unclaimed property audits is provided in Note 6—Commitments and Contingencies.

Item 4. Mine Safety Disclosures

 

Not Applicable.

16

GL 2021 FORM 10-K

---

Table of Contents

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

The principal market in which Globe Life's common stock is traded is the New York Stock Exchange (NYSE: GL). There were 2,125 shareholders of record on December 31, 2021, excluding shareholder accounts held in nominee form.

The line graph shown below compares Globe Life's cumulative total return on its common stock with the cumulative total returns of the Standard & Poor’s 500 Stock Index (S&P 500) and the Standard & Poor’s Life & Health Insurance Index (S&P Life & Health Insurance). Globe Life's stock is included within both the S&P 500 and the S&P Life & Health Insurance Index.

*$100 invested on 12/31/2016 in stock or index, including reinvestment of dividends. Fiscal year ended December 31.

Copyright© 2022 Standard & Poor's, a division of S&P Global. All rights reserved.

17

GL 2021 FORM 10-K

---

Table of Contents

Purchases of Certain Equity Securities by the Issuer and Others for the Fourth Quarter 2021

						(a)						(b)						(c)						(d)
Period						Total Number of Shares Purchased						Average Price Paid Per Share						Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs						Maximum Number of Shares (or Approximate Dollar Amount) that May Yet Be Purchased Under the Plans or Programs
October 1-31, 2021						265,733						$	91.68					265,733						—
November 1-30, 2021						751,875						91.60						751,875						—
December 1-31, 2021						609,074						90.00						609,074						—

 

On August 4, 2021, Globe Life's Board reaffirmed its continued authorization of the Company’s stock repurchase program in amounts and with timing that management, in consultation with the Board, determined to be in the best interest of the Company. The program has no defined expiration date or maximum number of shares to be purchased.

Item 6. [Reserved]

18

GL 2021 FORM 10-K

---

Table of Contents

CAUTIONARY STATEMENTS

 

We caution readers regarding certain forward-looking statements contained in the foregoing discussion and elsewhere in this document, and in any other statements made by, or on behalf of Globe Life whether or not in future filings with the Securities and Exchange Commission. Any statement that is not a historical fact, or that might otherwise be considered an opinion or projection concerning the Company or its business, whether express or implied, is meant as and should be considered a forward-looking statement. Such statements represent management's opinions concerning future operations, strategies, financial results or other developments. We specifically disclaim any obligation to update or revise any forward-looking statement because of new information, future developments, or otherwise.

 

Forward-looking statements are based upon estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control, including uncertainties related to the impact of the COVID-19 pandemic and associated direct and indirect effects on our business operations, financial results and financial condition. If these estimates or assumptions prove to be incorrect, the actual results of Globe Life may differ materially from the forward-looking statements made on the basis of such estimates or assumptions. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, which may be national in scope, related to the insurance industry generally, or applicable to the Company specifically. Such events or developments could include, but are not necessarily limited to:

1.Economic and other conditions, including the COVID-19 pandemic and its impact on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions;

2.Regulatory developments, including changes in accounting standards or governmental regulations (particularly those impacting taxes and changes to the Federal Medicare program that would affect Medicare Supplement);

3.Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such as Health Maintenance Organizations and other managed care or private plans) and that could affect the sales of traditional Medicare Supplement insurance;

4.Interest rate changes that affect product sales and/or investment portfolio yield;

5.General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from the COVID-19 pandemic, particularly in certain industries that may comprise part of our investment portfolio) that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities;

6.Changes in the competitiveness of the Company's products and pricing;

7.Litigation results;

8.Levels of administrative and operational efficiencies that differ from our assumptions (including any reduction in efficiencies resulting from increased costs arising from operating during the COVID-19 pandemic);

9.The ability to obtain timely and appropriate premium rate increases for health insurance policies from our regulators;

10.The customer response to new products and marketing initiatives;

11.Reported amounts in the consolidated financial statements which are based on management estimates and judgments which may differ from the actual amounts ultimately realized;

12.Compromise by a malicious actor or other event that causes a loss of secure data from, or inaccessibility to, our computer and other information technology systems;

13.The severity, magnitude and impact of the COVID-19 pandemic, including effects of the pandemic and the effects of the U.S. and state governments' and other businesses’ response to the pandemic, on our operations and personnel, and on commercial activity and demand for our products; and

14.Our ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period as a result of the COVID-19 pandemic.

Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission.

 

19

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion should be read in conjunction with Globe Life's Consolidated Financial Statements and Notes thereto appearing elsewhere in this report. The following management discussion will only include comparison to prior year. For discussion regarding activity from 2019, please refer to the prior filed Form 10-Ks at www.sec.gov.

 

"Globe Life" and the "Company" refer to Globe Life Inc. and its subsidiaries and affiliates.

Results of Operations

						How Globe Life Views Its Operations. Globe Life Inc. is the holding company for a group of insurance companies that market primarily individual life and supplemental health insurance to lower middle to middle income households throughout the United States. We view our operations by segments, which are the insurance product lines of life, supplemental health, and annuities, and the investment segment that supports the product lines. Segments are aligned based on their common characteristics, comparability of the profit margins, and management techniques used to operate each segment.
						Insurance Product Line Segments. The insurance product line segments involve the marketing, underwriting, and administration of policies. Each product line is further segmented by the various distribution channels that market the insurance policies. Each distribution channel operates in a niche market offering insurance products designed for that particular market. Whether analyzing profitability of a segment as a whole, or the individual distribution channels within the segment, the measure of profitability used by management is the underwriting margin, as seen below:
						Premium revenue                                                            (Policy obligations)                                                            (Policy acquisition costs and commissions)                                                             Underwriting margin
						Investment Segment. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below:
						Net investment income (Required interest on net policy liabilities)                                                            (Financing costs)                                                             Excess investment income

20

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Current Highlights, comparing year-to-date 2021 with 2020.

•Net income as a return on equity (ROE) for the year ended December 31, 2021 was 8.8% and net operating income as an ROE, excluding net unrealized gains on the fixed maturity portfolio(1) was 12.3%.

•Total premium increased 7% over the prior year. Life premium increased 8% for the period from $2.7 billion in 2020 to $2.9 billion in 2021. Life underwriting margin declined 8% from $675 million in 2020 to $624 million in 2021.

•Net investment income increased 3% over the same period in the prior year. Excess investment income declined 2% below the prior year.

•Total net sales increased 7% over the same period in the prior year from $662 million to $706 million.

•Book value per share increased 3% over the same period in the prior year from $83.19 to $85.97. Book value per share, excluding net unrealized gains on the fixed maturity portfolio(1), increased 10% over the prior year from $53.12 to $58.50.

•The Company incurred $140 million of COVID-19 net life claims (net of reserves released upon death) for the year ended December 31, 2021 compared with $67 million during the same period last year.

•For the year ended December 31, 2021, the Company repurchased 4.8 million shares of Globe Life Inc. common stock at a total cost of $455 million for an average share price of $95.11.

The following graphs represent net income and net operating income for the three years ended December 31, 2021.

(1)As shown in the charts above, net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. It has been used consistently by Globe Life's management for many years to evaluate the operating performance of the Company. It differs from net income primarily because it excludes certain non-operating items such as realized gains and losses and certain significant and unusual items included in net income. Net income is the most directly comparable GAAP measure.

Net operating income as an ROE, excluding net unrealized gains on the fixed maturity portfolio, is considered a non-GAAP measure. Management utilizes this measure to view the business without the effect of the net unrealized gains, which are primarily attributable to fluctuation in interest rates on the available-for-sale portfolio. The impact of the adjustment to exclude net unrealized gains on fixed maturities, net of tax is $2.8 billion and $3.2 billion for the year ended December 31, 2021 and 2020, respectively.

Book value per share, excluding net unrealized gains on the fixed maturity portfolio, is also considered a non-GAAP measure. Management utilizes this measure to view the book value of the business without the effect of net unrealized gains, which are primarily attributable to fluctuation in interest rates on the available-for-sale portfolio. The impact of the adjustment to exclude net unrealized gains on fixed maturities is $27.47 and $30.07 for year ended December 31, 2021 and 2020, respectively.

Refer to Analysis of Profitability by Segment for non-GAAP reconciliation to GAAP.

21

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Summary of Operations. Net income increased 2% to $745 million in 2021, compared with $732 million in 2020. This increase was primarily related to an increase in realized gains offset by higher COVID-19 life claims. On a diluted per common share basis, net income per common share for 2021 increased from $6.82 to $7.22. Included in net income were after-tax realized gains of $47 million in 2021, compared with realized after-tax losses of $2 million for 2020. Realized gains and losses are presented more fully under the caption Realized Gains and Losses in this report.

Net operating income from continuing operations declined 4% to $707 million in 2021, compared with $738 million in 2020. On a diluted per common share basis, net operating income per common share decreased slightly from $6.88 to $6.86. Net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. Net income is the most directly comparable GAAP measure. We do not consider realized gains and losses to be a component of our core insurance operations or operating segments. Additionally, net income was affected by certain significant and unusual non-operating items in 2020 and 2021. We do not view these items as components of core operating results because they are not indicative of past performance or future prospects of the insurance operations. We remove items such as these that relate to prior periods or are non-operating items when evaluating the results of current operations, and therefore exclude such items from our segment analysis for current periods.

Despite headwinds with COVID-19, the Company continues to see positive signs in its core operations, including strong sales, favorable persistency and a strong ROE, excluding net unrealized gains on the fixed maturity portfolio.

COVID-19. For the year ended December 31, 2021, the Company incurred $140 million of COVID-19 net life claims. Per the Centers for Disease Control and Prevention (CDC), there were approximately 460 thousand U.S. COVID-19 deaths in 2021. In the second half of the year, the COVID-19 deaths were concentrated in geographies and younger age groups where the Company has greater risk exposure. The Company’s level of COVID-19 net life claims, on average for the year, was approximately $3 million per 10,000 U.S. deaths.

Going forward, we anticipate that COVID-19 deaths will continue at elevated levels throughout 2022, with an impact of approximately $50 million at the mid-point of our guidance based on incurred claims in the range of $3 million to $4 million per 10,000 U.S. deaths. The projected life claims are dependent on this estimate and many other variables, including, but not limited to, projected U.S. deaths from COVID-19, the timing and availability of effective treatments for the disease, vaccination rates, and effectiveness of vaccines, impact from potential variants, and the ages and geographic areas in which infections and deaths occur.

22

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Globe Life's operations on a segment-by-segment basis are discussed in depth below. Net operating income has been used consistently by management for many years to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from GAAP net income primarily because it excludes certain non-operating items such as realized gains and losses and other significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business. Net income is the most directly comparable GAAP measure.

Analysis of Profitability by Segment

(Dollar amounts in thousands)

			2021						2020						2019						2021 Change						%						2020 Change						%
Life insurance underwriting margin			$	623,675					$	674,946					$	703,464					$	(51,271)					(8)						$	(28,518)					(4)
Health insurance underwriting margin			304,302						272,369						243,638						31,933						12						28,731						12
Annuity underwriting margin			8,704						9,029						9,458						(325)						(4)						(429)						(5)
Excess investment income			238,528						244,424						257,605						(5,896)						(2)						(13,181)						(5)
Other insurance:
Other income			1,216						1,325						1,318						(109)						(8)						7						1
Administrative expense			(271,631)						(250,947)						(240,321)						(20,684)						8						(10,626)						4
Corporate and other			(39,825)						(45,783)						(55,103)						5,958						(13)						9,320						(17)
Pre-tax total			864,969						905,363						920,059						(40,394)						(4)						(14,696)						(2)
Applicable taxes			(157,472)						(167,771)						(167,957)						10,299						(6)						186						—
Net operating income			707,497						737,592						752,102						(30,095)						(4)						(14,510)						(2)
Reconciling items, net of tax:
Realized gain (loss)—investments			54,220						(1,915)						16,291						56,135												(18,206)
Realized loss—redemption of debt			(7,358)						(501)						—						(6,857)												(501)
Part D adjustments—discontinued operations			—						—						(92)						—												92
Administrative settlements			(1,047)						—						(400)						(1,047)												400
Non-operating expenses			(1,923)						(816)						(508)						(1,107)												(308)
Legal proceedings			(6,430)						(2,587)						(6,603)						(3,843)												4,016
Net income			$	744,959					$	731,773					$	760,790					$	13,186					2						$	(29,017)					(4)

The life insurance segment is our primary segment and is the largest contributor to earnings in each year presented. The life insurance segment underwriting margin declined $51 million compared with the prior year, primarily due to higher life claims related to COVID-19 offset by premium growth. The health segment contributed to growth in income in both years contributing $32 million of additional underwriting margin in 2021 and $29 million in 2020.

23

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

In 2021, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was American Income Life Division. The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the year ended December 31, 2021.

Total premium income rose 7% for the year ended December 31, 2021 to $4.1 billion. Total net sales increased 7% to $706 million, when compared with 2020. Total first-year collected premium (defined in the following section) was $583 million for 2021, compared with $547 million for 2020.

Life insurance premium income increased 8% to $2.9 billion over the prior year total of $2.7 billion. Life net sales rose 8% to $522 million for the year ended 2021. First-year collected life premium rose 14% to $423 million. Life underwriting margins, as a percent of premium, declined to 22% in 2021 from 25% in the prior year. Underwriting margin declined to $624 million in 2021, 8% below the same period in 2020. The decline in the life underwriting margin is primarily due to approximately $140 million of COVID-19 net life claims incurred during the year ended 2021 versus $67 million during the same period in 2020.

Health insurance premium income increased 5% to $1.20 billion over the prior year total of $1.14 billion. Health net sales rose 4% to $184 million for the year ended 2021. First-year collected health premium fell 9% to $160 million. Health underwriting margins, as a percent of premium, increased to 25% in 2021 compared with 24% in 2020. Health underwriting margin increased to $304 million for the year ended 2021, 12% over the same period in 2020.

Excess investment income, the measure of profitability of our investment segment, declined 2% during 2021 to $239 million from $244 million in the same period in 2020. Excess investment income per common share, reflecting the impact of our share repurchase program, increased 1% to $2.31 from $2.28 when compared with the same period in 2020.

Insurance administrative expenses increased 8% in 2021 when compared with the prior year period. These expenses were 6.6% as a percent of premium during the year ended 2021 and 2020.

For the year ended December 31, 2021, the Company repurchased 4.8 million Globe Life Inc. shares at a total cost of $455 million for an average share price of $95.11.

24

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

The discussions of our segments are presented in the manner we view our operations, as described in Note 14—Business Segments.

 

We use three statistical measures as indicators of premium growth and sales over the near term: “annualized premium in force,” “net sales,” and “first-year collected premium.”

•Annualized premium in force is defined as the premium income that would be received over the following twelve months at any given date on all active policies if those policies remain in force throughout the twelve-month period. Annualized premium in force is an indicator of potential growth in premium revenue.

•Net sales, a statistical performance measure, is calculated as annualized premium issued, net of cancellations in the first thirty days after issue, except in the case of Direct to Consumer, where net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued.

•First-year collected premium is defined as the premium collected during the reporting period for all policies in their first policy year. First-year collected premium takes lapses into account in the first year when lapses are more likely to occur, and thus is a useful indicator of how much new premium is expected to be added to premium income in the future.

See further discussion of the distribution channels below for Life and Health.

25

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2021, life premium represented 71% of total premium and life underwriting margin represented 67% of the total. Additionally, investments supporting the reserves for life products produce the majority of excess investment income attributable to the investment segment.

 

The following table presents the summary of results of life insurance. Further discussion of the results by distribution channel is included below.

Life Insurance

Summary of Results

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Premium						Amount						% of Premium						Amount						% of Premium
Premium and policy charges			$	2,898,210					100						$	2,672,804					100						$	2,517,784					100
Policy obligations			2,070,485						71						1,809,373						68						1,638,053						65
Required interest on reserves			(735,282)						(25)						(698,112)						(26)						(666,168)						(26)
Net policy obligations			1,335,203						46						1,111,261						42						971,885						39
Commissions, premium taxes, and non-deferred acquisition expenses			234,033						8						212,859						8						203,052						8
Amortization of acquisition costs			705,299						24						673,738						25						639,383						25
Total expense			2,274,535						78						1,997,858						75						1,814,320						72
Insurance underwriting margin			$	623,675					22						$	674,946					25						$	703,464					28

The lower life insurance underwriting margins for the year ended December 31, 2021 are primarily attributed to approximately $140 million of COVID-19 net life claims, compared with $67 million in the prior year.

26

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Life insurance products are marketed through several distribution channels. Premium income by distribution channel for each of the last three years is as follows:

 

Life Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
American Income			$	1,402,878					48						$	1,257,726					47						$	1,160,495					46
Direct to Consumer			971,461						34						906,959						34						855,543						34
Liberty National			311,081						11						293,897						11						285,551						11
Other			212,790						7						214,222						8						216,195						9
Total			$	2,898,210					100						$	2,672,804					100						$	2,517,784					100

 

Annualized life premium in force was $2.9 billion at December 31, 2021, an increase of 7% over $2.7 billion a year earlier.

The following table shows net sales information for each of the last three years by distribution channel.

Life Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
American Income			$	290,512					56						$	253,276					52						$	237,587					55
Direct to Consumer			148,846						28						165,426						34						126,208						29
Liberty National			71,184						14						54,931						12						53,718						13
Other			11,055						2						10,371						2						12,301						3
Total			$	521,597					100						$	484,004					100						$	429,814					100

The table below discloses first-year collected life premium by distribution channel.

 

Life Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
American Income			$	250,937					59						$	214,566					58						$	195,225					59
Direct to Consumer			111,761						27						104,262						28						82,615						25
Liberty National			50,336						12						42,435						11						39,840						12
Other			9,705						2						10,190						3						11,564						4
Total			$	422,739					100						$	371,453					100						$	329,244					100

27

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

A discussion of life operations by distribution channel follows.

The American Income Life Division markets to members of labor unions and continues to diversify its lead sources by building relationships with other affinity groups, utilizing third-party internet vendor leads and obtaining referrals to facilitate sustainable growth. This division is Globe Life's largest contributor of life premium of any distribution channel at 48% of the Company's 2021 total life premium. Net sales increased 15% to $291 million in 2021 over the 2020 total of $253 million. The increase in net life sales is due to increased productivity and well as an increase in agent count. Premium increased 12% primarily due to improved persistency and higher sales. The underwriting margin, as a percent of premium, was 30% for the year ended December 31, 2021, down from 32% from the prior year primarily due to higher COVID-19 claims and higher reserve increases from lower policy lapse rates.

This division incurred $36 million in COVID-19 net life claims, representing approximately 3% of premium, for the year ended December 31, 2021, compared with $18 million in COVID-19 net life claims during the prior year.

Below is the average producing agent count at the end of the period for the American Income Life Division. The average producing agent count is based on the actual count at the end of each week during the year. The division continues to see a significant recruiting opportunity due to the current economic conditions and our ability to recruit virtually and in-person. Sales growth in our exclusive agencies is generally dependent on growth in the size of the agency force.

			2021						2020						2019						2021 Change						%						2020 Change						%
American Income			9,971						8,738						7,360						1,233						14						1,378						19

American Income Life continues to focus on growing and strengthening the agency force, specifically through emphasis on agency middle-management growth and additional agency office openings. In addition to offering financial incentives and training opportunities, the agency has made considerable investments in information technology, including a customer relationship management (CRM) tool for the agency force. This tool is designed to drive productivity in lead distribution, conservation of business, manager dashboards and new agent recruiting. Additionally, this division has invested in and successfully implemented technology that allows the agency force to engage in virtual recruiting, training and sales activity. Over the past year and through the pandemic, the agents have shifted to primarily a virtual experience with the customers and have generated a vast majority of its sales through virtual presentations. We find this flexibility to be enticing for new recruits as well as a driver of sustainability for our agency force.

The Direct to Consumer Division (DTC) offers adult and juvenile life insurance through a variety of marketing approaches, including direct mailings, insert media, and electronic media. In recent years, production from electronic media, which is comprised of sales through both the internet and inbound phone calls to our call center, has grown rapidly compared with direct mail response as management has aggressively increased marketing activities related to internet and mobile technology as well as focused on driving traffic to our inbound call center. This had been steadily increasing prior to COVID-19, but the pandemic accelerated this activity due in part to the awareness of needing life insurance from the effects of COVID-19. The different approaches support and complement one another in the division's efforts to reach the consumer. The DTC's long-term growth has been fueled by constant innovation and name recognition. We continually introduce new initiatives in this division in an attempt to increase response rates.

While the juvenile market is an important source of sales, it also is a vehicle to reach the parents and grandparents of juvenile policyholders, who are more likely to respond favorably to a DTC solicitation for life coverage on themselves than is the general adult population. Also, both juvenile policyholders and their parents are low acquisition-cost targets for sales of additional coverage over time.

The DTC division continued to see high demand of its life insurance products in the current year primarily through its internet and inbound phone channels as a result of the response from COVID-19. Our continued investments in technology have allowed us to successfully serve the higher demands for our products through the digital self-serve and phone channels.

28

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

DTC net sales decreased 10% to $149 million for the year ended December 31, 2021 compared with $165 million in the prior year, primarily due to the record high net life sales in the prior year at the onset of the pandemic. We expect continued strong sales in 2022 due to the heightened awareness as to the benefits of life insurance.

DTC incurred $69 million of COVID-19 net life claims, representing approximately 7% of premium, in 2021 compared with $35 million in 2020. DTC’s underwriting margin, as a percent of premium, was 7% for the year ended December 31, 2021, which was lower than the 14% result in 2020 primarily due to higher COVID-19 net life claims in 2021.

The Liberty National Division markets individual life insurance to middle-income household and worksite customers. Recent investments in new sales technologies as well as recent growth in middle management within the agency will help continue this growth. The underwriting margin as a percent of premium was 17%, down from 23% for the year ended 2020. The decrease is primarily attributable to higher than normal policy obligations during 2021 as a result of COVID-19. This division incurred $28 million of COVID-19 net life claims, representing approximately 9% of premium, for the year ended December 31, 2021 compared with $12 million in 2020. Net sales increased 30% in 2021 over 2020. With the division's ability to return to face-to-face customer interaction and the option of virtual sales, total net life sales increased for the full year 2021. However, due to higher policy obligations as result of COVID-19, underwriting margin as a percent of premium was lower for the full year 2021 as compared with 2020.

Below is the average producing agent count at the end of the period for Liberty National Division. As the division continues to gain momentum in its sales and recruiting initiatives and advances its technology and CRM platform, the agency should see an increase in recruiting of new agents and an increase in the average producing agent count.

			2021						2020						2019						2021 Change						%						2020 Change						%
Liberty National			2,716						2,575						2,350						141						5						225						10

The Liberty National Division average producing agent count increased 5% in 2021. We continue to execute our long-term plan to grow this agency through expansion from small-town markets in the Southeast to more densely populated areas with larger pools of potential agent recruits and customers. Continued expansion of this agency’s presence into more heavily populated, less-penetrated areas will help create long-term agency growth. Additionally, the agency continues to help improve the ability of agents to develop new worksite marketing business. Systems that have been put in place, including the addition of a CRM platform and enhanced analytical capabilities, have helped the agents develop additional worksite marketing opportunities as well as improve the productivity of agents selling in the individual life market.

The Other Agencies distribution channels primarily include non-exclusive independent agencies selling predominantly life insurance. The Other Agencies contributed $213 million of life premium income, or 7% of Globe Life's total in 2021, but contributed only 2% of net sales for the year.

HEALTH INSURANCE

Health insurance sold by the Company primarily includes Medicare Supplement insurance, accident coverage, and other limited-benefit supplemental health products including cancer, critical illness, heart, and intensive care coverage.

Health premium accounted for 29% of our total premium in 2021, while the health underwriting margin accounted for 32% of total underwriting margin. Health underwriting margin increased 12% to $304 million primarily due to lower policy obligations. The Company continues to emphasize life insurance sales relative to health due to life’s superior long-term profitability and its greater contribution to excess investment income.

29

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

The following table presents underwriting margin data for health insurance.

Health Insurance

Summary of Results

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Premium						Amount						% of Premium						Amount						% of Premium
Premium			$	1,201,676					100						$	1,141,097					100						$	1,077,346					100
Policy obligations			758,745						63						733,481						64						687,764						64
Required interest on reserves			(102,574)						(8)						(93,475)						(8)						(87,289)						(8)
Net policy obligations			656,171						55						640,006						56						600,475						56
Commissions, premium taxes, and non-deferred acquisition expenses			97,453						8						91,959						8						94,973						8
Amortization of acquisition costs			143,750						12						136,763						12						138,260						13
Total expense			897,374						75						868,728						76						833,708						77
Insurance underwriting margin			$	304,302					25						$	272,369					24						$	243,638					23

Health premium increased 5% from $1.14 billion in 2020 to $1.20 billion in 2021. Health underwriting margin increased 12% from $272 million in 2020 to $304 million in 2021 primarily due to growth in premiums. Further discussion is included below by distribution channel.

Globe Life markets supplemental health insurance products through a number of distribution channels. The following table is an analysis of our health premium by distribution channel for each of the last three years.

Health Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
United American			$	481,614					40						$	452,980					40						$	416,582					39
Family Heritage			343,839						29						317,021						28						294,182						27
Liberty National			187,327						16						188,835						16						189,578						18
American Income			114,950						9						105,734						9						99,447						9
Direct to Consumer			73,946						6						76,527						7						77,557						7
Total			$	1,201,676					100						$	1,141,097					100						$	1,077,346					100

Of total health premium of $1.2 billion, premium from limited-benefit plans comprise $639 million, or 53% of the total, for 2021 compared with $588 million in the prior year. Premium from Medicare Supplement products comprises the remaining 47% or $563 million for 2021 compared with $553 million in 2020. Annualized health premium in force was $1.29 billion at December 31, 2021, an increase of 8% over the prior year balance of $1.19 billion.

30

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Presented below is a table of health net sales by distribution channel for the last three years.

 

Health Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
United American			$	63,551					35						$	61,690					35						$	79,218					41
Family Heritage			72,600						39						70,665						40						65,626						34
Liberty National			26,512						14						22,905						13						24,504						13
American Income			18,230						10						18,817						10						18,059						10
Direct to Consumer			3,465						2						3,594						2						3,827						2
Total			$	184,358					100						$	177,671					100						$	191,234					100

Of total net sales of $184 million, sales of limited-benefit plans comprise $118 million, or 64% of the total, for 2021 compared with $113 million in 2020. Medicare Supplement sales make up the remaining 36%, or $66 million for 2021 compared with $65 million in 2020.

The following table discloses first-year collected health premium by distribution channel.

 Health Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Total						Amount						% of Total						Amount						% of Total
United American			$	60,386					37						$	79,628					45						$	72,021					44
Family Heritage			57,427						36						54,242						31						50,204						31
Liberty National			20,348						13						20,169						11						19,698						12
American Income			18,939						12						18,536						11						17,142						11
Direct to Consumer			3,253						2						3,051						2						3,749						2
Total			$	160,353					100						$	175,626					100						$	162,814					100

First-year collected premium related to limited-benefit plans comprise $99 million, or 62% of total first-year collected premium for 2021 compared with $93 million in 2020. First-year collected premium from Medicare Supplement policies make up the remaining 38%, or $61 million for 2021 compared with $83 million in 2020.

A discussion of health operations by distribution channel follows.

The United American Independent Agency consists of non-exclusive independent agencies who may also sell for other companies. The United American Independent Agency was Globe Life's largest health agency in terms of health premium income.

This division is also Globe Life's largest producer of Medicare Supplement insurance, responsible for 82% of the Company's Medicare Supplement premium and 95% of Medicare Supplement net sales. Medicare Supplement premium in this agency rose 4% to $460 million in 2021 over the prior period net sales of $443 million. Medicare Supplement net sales increased 2% to $63 million in 2021 from the prior year. The Medicare Supplement market is highly competitive and thus sales will fluctuate over the years. Underwriting margin as a percent of premium was flat at 15% for 2021 compared with 2020.

31

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

As discussed in Note 1—Significant Accounting Policies, the Company acquired Beazley Benefits, now rebranded as Globe Life Benefits, on August 1, 2021. Globe Life Benefits enhances the Company's presence in the worksite market by offering group supplemental health insurance solutions to employer groups through brokers. While the acquisition had an immaterial impact on year-to-date results, we are optimistic about Globe Life Benefits' ability to contribute additional health premium and profits in the future. Operating results for Globe Life Benefits are included as part of United American Division results.

The Family Heritage Division primarily markets limited-benefit supplemental health insurance in non-urban areas. Most of its policies include a cash-back feature, such as a return of premium, where any excess of premiums over claims paid is returned to the policyholder at the end of a specified period stated within the insurance policy. Underwriting margin as a percent of premium was 27%, up from 26% for the year ended December 31, 2020. The increase was primarily attributable to favorable claims experience.

The division experienced a 3% increase in net health sales in 2021 as compared with the 2020, primarily due to an increase in agent productivity and training. The division will continue to launch incentive programs to help drive an increase in productivity and the number of producing agents.

Below is the average producing agent count at the end of the indicated periods for the Family Heritage Division. While the agency has seen a decrease in agent count as compared with 2020, we anticipate that as COVID-19 and the job market stabilize, agent recruitment opportunities should increase.

			2021						2020						2019						2021 Change						%						2020 Change						%
Average producing agents			1,213						1,325						1,112						(112)						(8)						213						19

The Liberty National Division represented 16% of all Globe Life health premium income at $187 million in 2021. Liberty National markets limited-benefit supplemental health products consisting primarily of critical illness insurance. Much of Liberty National’s health business is generated through worksite marketing targeting small businesses of 10 to 100 employees. In 2021, health premium income declined 1%. Liberty National's first-year collected premium increased 1% to $20.3 million in 2021 compared with $20.2 million in 2020. Health net sales for 2021 increased by $4 million or 16% from 2020. We anticipate an increase in net health sales going forward at this division as the Company becomes more able to interact face-to-face with customers.

Other distribution. While some of the Company's other distribution channels market health products, selling life insurance is the main emphasis. On a combined basis, they accounted for 15% of health premium in 2021 and 16% in 2020. The American Income Life Division primarily markets accident plans. The Direct to Consumer Division markets primarily Medicare Supplements to employer or union-sponsored groups, adding $3 million of Medicare Supplement net sales in 2021 and $4 million in 2020. 

ANNUITIES

Our fixed annuity balances at the end of 2021 and 2020 were $1.03 billion and $1.06 billion, respectively. Underwriting margin was $8.7 million for 2021 and $9.0 million for 2020.

We do not currently market stand-alone fixed or deferred annuity products, favoring instead protection-oriented life and supplemental health insurance products. Therefore, we do not expect that annuities will be a significant portion of our business or marketing strategy going forward.

32

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

INVESTMENTS

We manage our capital resources including investments, debt, and cash flow through the investment segment. Excess investment income represents the profit margin attributable to investment operations and is the measure that we use to evaluate the performance of the investment segment as described in Note 14—Business Segments. It is defined as net investment income less both the required interest on net insurance policy liabilities and the interest cost associated with capital funding or “financing costs.”

Management also views excess investment income per diluted common share as an important and useful measure to evaluate the performance of the investment segment. It is defined as excess investment income divided by the total diluted weighted average shares outstanding, representing the contribution by the investment segment to the consolidated earnings per share of the Company. Since implementing our share repurchase program in 1986, we have used $8.7 billion of excess cash flow at the Parent Company to repurchase Globe Life Inc. common shares after determining that the repurchases provided a greater risk adjusted after-tax return than other investment alternatives. If we had not used this excess cash to repurchase shares, but had instead invested it in interest-bearing assets, we would have earned more investment income and had more shares outstanding. As excess investment income per diluted common share incorporates all capital resources, we view excess investment income per diluted common share as a useful measure to evaluate the investment segment.

Excess Investment Income. The following table summarizes Globe Life's investment income, excess investment income, and excess investment income per diluted common share.

Analysis of Excess Investment Income

(Dollar amounts in thousands except per share data)

			2021						2020						2019
Net investment income			$	952,447					$	927,062					$	910,459
Interest on net insurance policy liabilities:
Required interest on reserves			(877,822)						(833,000)						(796,979)
Required interest on deferred acquisition costs			247,389						237,066						228,431
Net required interest			(630,433)						(595,934)						(568,548)
Financing costs			(83,486)						(86,704)						(84,306)
Excess investment income			$	238,528					$	244,424					$	257,605
Excess investment income per diluted common share			$	2.31					$	2.28					$	2.31
Mean invested assets (at amortized cost)			$	18,939,317					$	17,987,502					$	17,026,058
Average net insurance policy liabilities(1)			10,954,500						10,460,539						10,068,120
Average debt and preferred securities (at amortized cost)			2,053,935						1,859,298						1,650,081

(1)Net of deferred acquisition costs, excluding the associated unrealized gains and losses thereon.

Excess investment income declined $6 million or 2% during 2021. Excess investment income per diluted common share increased 1% during 2021. Excess investment income per diluted common share generally increases at a faster pace than excess investment income because the number of diluted shares outstanding generally decreases from year to year as a result of our share repurchase program.

33

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Net investment income increased at a compound annual growth rate of 3% over the 3 years ending 2021 while mean invested assets increased at a compound rate of 5% during the same period. The tax equivalent effective annual yield rate earned on the fixed maturity portfolio was 5.21% in 2021. Growth in net investment income has been negatively impacted in recent years by the low interest rate environment during which time we have invested new money at yields lower than our average portfolio yield. In addition, we have reinvested the proceeds from bonds that matured, were called, or were otherwise disposed of at yield rates less than the yield earned on these disposed bonds. We currently expect that the average annual turnover rate of fixed maturity assets will be less than 2% over the next five years and will not have a material negative impact on net investment income. In addition to fixed maturities, the Company has also invested in limited partnerships with debt like characteristics that diversify risk and enhance risk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the investment funds for the year ended December 31, 2021 was 5.24%. See additional information in Note 4—Investments. The following chart presents the growth in net investment income and the growth in mean invested assets.

			2021						2020						2019
Growth in net investment income			2.7		%				1.8		%				3.2		%
Growth in mean invested assets (at amortized cost)			5.3		%				5.6		%				4.8		%

Should the current low interest rate environment continue, the growth of the Company's net investment income will be negatively impacted primarily due to the investment of new money and proceeds from dispositions at rates less than the average portfolio yield rate. While net investment income would grow, it would continue to grow at rates less than the growth in mean invested assets.

Should interest rates, especially long-term rates, rise, Globe Life's net investment income would benefit due to higher interest rates on new investments. While such a rise in interest rates could adversely affect the fair value of the fixed maturities portfolio, we could withstand an increase in interest rates of approximately 140 to 145 basis points before the net unrealized gains on our fixed maturity portfolio as of December 31, 2021 would be eliminated. Should interest rates increase further, we would not be concerned with potential interest rate driven unrealized losses in our fixed maturity portfolio because we do not intend to sell nor is it likely that management will be required to sell the fixed maturities prior to their anticipated recovery.

Required interest on net insurance policy liabilities reduces net investment income, as it is the amount of net investment income considered by management necessary to “fund” required interest on net insurance policy liabilities, which is the net of the benefit reserve liability and the deferred acquisition cost asset. As such, it is removed from the investment segment and applied to the insurance segments to offset the effect of the required interest from the insurance segments. As discussed in Note 14—Business Segments, management regards this as a more meaningful analysis of the investment and insurance segments. Required interest is based on the actuarial interest assumptions used in discounting the benefit reserve liability and the amortization of deferred acquisition costs for our insurance policies in force.

The great majority of our life and health insurance policies are fixed interest rate protection policies, not investment products, and are accounted for under current GAAP accounting guidance for long-duration insurance products which mandate that interest rate assumptions for a particular block of business be “locked in” for the life of that block of business. Each calendar year, we set the discount rate to be used to calculate the benefit reserve liability and the amortization of the deferred acquisition cost asset for all insurance policies issued that year. That rate is based on the new money yields that we expect to earn on cash flow received in the future from policies of that issue year and cannot be changed. The discount rate used for policies issued in the current year has no impact on the in force policies issued in prior years as the rates of all prior issue years are also locked in. As such, the overall discount rate for the entire in force block of 5.8% is a weighted average of the discount rates being used from all issue years. Changes in the overall weighted-average discount rate over time are caused by changes in the mix of the reserves and the deferred acquisition cost asset by issue year on the entire block of in force business. Business issued in the current year has very little impact on the overall weighted-average discount rate due to the size of our in force business.

Since actuarial discount rates are locked in for life on essentially all of our business, benefit reserves and deferred acquisition costs are not affected by interest rate fluctuations unless a loss recognition event occurs. Due to the

34

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

strength of our underwriting margins, we do not expect an extended low interest rate environment will cause a loss recognition event.

Information about interest on net policy liabilities is shown in the following table.

Required Interest on Net Insurance Policy Liabilities

(Dollar amounts in thousands)

			Required Interest						Average Net Insurance Policy  Liabilities						Average Discount Rate
2021
Life and Health			$	583,996					$	9,912,914					5.9		%
Annuity			46,437						1,041,586						4.5
Total			$	630,433					$	10,954,500					5.8
Increase in 2021			5.8		%				4.7		%
2020
Life and Health			$	548,066					$	9,391,680					5.8		%
Annuity			47,868						1,068,859						4.5
Total			$	595,934					$	10,460,539					5.7
Increase in 2020			4.8		%				3.9		%
2019
Life and Health			$	518,623					$	8,947,308					5.8		%
Annuity			49,925						1,120,812						4.5
Total			$	568,548					$	10,068,120					5.6
Increase in 2019			3.9		%				3.3		%

35

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Financing costs for the investment segment consist primarily of interest on our various debt instruments. The table below presents the components of financing costs and reconciles interest expense per the Consolidated Statements of Operations.

Analysis of Financing Costs

(Dollar amounts in thousands)

			2021						2020						2019
Interest on funded debt			$	78,183					$	73,157					$	69,844
Interest on term loan			—						4,193						3,262
Interest on short-term debt			5,270						9,302						11,165
Other			33						52						35
Financing costs			$	83,486					$	86,704					$	84,306

 

In 2021, financing costs decreased 4% compared with prior year primarily due to rates on the short-term debt. The interest on funded debt was higher than the prior year as a result of the 2.15% Senior Note issued in August 2020. More information on our debt transactions are disclosed in the Financial Condition section of this report and in Note 11—Debt.

Realized Gains and Losses. Our life and health insurance companies collect premium income from policyholders for the eventual payment of policyholder benefits, sometimes paid many years or even decades in the future. Since benefits are expected to be paid in future periods, premium receipts in excess of current expenses are invested to provide for these obligations. For this reason, we hold a significant investment portfolio as a part of our core insurance operations. This portfolio consists primarily of high-quality fixed maturities containing an adequate yield to provide for the cost of carrying these long-term insurance product obligations. As a result, fixed maturities are generally held for long periods to support the liabilities. Expected yields on these investments are taken into account when setting insurance premium rates and product profitability expectations.

 

Despite our intent to hold fixed maturity investments for a long period of time, investments are occasionally sold, exchanged, called, or experience a credit loss event, resulting in a realized gain or loss. These sales are often in response to deterioration in credit quality of the issuer in effort to maximize risk-adjusted, capital-adjusted returns. We do not engage in trading investments for profit. Therefore, gains or losses, which occur in protecting the portfolio or its yield or which result from events that are beyond our control, are only secondary to our core insurance operations of providing insurance coverage to policyholders. In a bond exchange offer, bondholders may consent to exchange their existing bonds for another class of debt securities. The Company also has investments in certain limited partnerships, held under the fair value option, with fair value changes recognized in Realized gains (losses) in the Consolidated Statements of Operations.

 

Realized gains and losses can be significant in relation to the earnings from core insurance operations, and as a result, can have a material positive or negative impact on net income. The significant fluctuations caused by gains and losses can cause period-to-period trends of net income that are not indicative of historical core operating results or predictive of the future trends of core operations. Accordingly, they have no bearing on core insurance operations or segment results as we view operations. For these reasons, and in line with industry practice, we remove the effects of realized gains and losses when evaluating overall insurance operating results.

 

36

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

The following table summarizes our tax-effected realized gains (losses) by component for each of the three years ended December 31, 2021.

Analysis of Realized Gains (Losses), Net of Tax

(Dollar amounts in thousands, except for per share data)

			Year Ended December 31,
			2021												2020												2019
			Amount						Per Share						Amount						Per Share						Amount						Per Share
Fixed maturities:
Sales			$	(8,100)					$	(0.08)					$	(28,844)					$	(0.27)					$	(1,933)					$	(0.02)
Other(1)			35,684						0.34						11,712						0.11						17,223						0.16
Provision for credit losses			2,337						0.02						(2,643)						(0.03)						—						—
Fair value option—change in fair value			18,105						0.18						826						0.01						992						0.01
Other investments			6,194						0.06						17,034						0.16						9						—
Realized investment gains (losses)			54,220						0.52						(1,915)						(0.02)						16,291						0.15
Loss on redemption of debt			(7,358)						(0.07)						(501)						—						—						—
Total realized gains (losses)			$	46,862					$	0.45					$	(2,416)					$	(0.02)					$	16,291					$	0.15

(1)During the three years ended December 31, 2021, 2020, and 2019, the Company recorded $109.2 million, $219.8 million and $243.2 million of exchanges of fixed maturity securities (noncash transactions) that resulted in $19.9 million, $6.2 million, and $16.2 million, respectively in realized gains (losses), net of tax.

Investment Acquisitions. Globe Life's investment policy calls for investing primarily in investment grade fixed maturities that meet our quality and yield objectives. We generally invest in securities with longer maturities because they more closely match the long-term nature of our policy liabilities. We believe this strategy is appropriate since our expected future cash flows are generally stable and predictable and the likelihood that we will need to sell invested assets to raise cash is low.

During calendar years 2019 through 2021, Globe Life invested predominately in fixed maturity securities, primarily in corporate and municipal bonds with longer-term maturities. The following table summarizes selected information for fixed maturity investments. The effective annual yield shown is based on the acquisition price and call features, if any, of the securities. For non-callable bonds, the yield is calculated to maturity date. For callable bonds acquired at a premium, the yield is calculated to the earliest known call date and call price after acquisition ("first call date"). For all other callable bonds, the yield is calculated to maturity date.

Fixed Maturity Acquisitions Selected Information

(Dollar amounts in thousands)

			Year Ended December 31,
			2021						2020						2019
Cost of acquisitions(1):
Investment-grade corporate securities			$	566,400					$	686,844					$	922,927
Investment-grade municipal securities			434,482						543,088						627,967
Other investment-grade securities			10,465						34,171						10,483
Total fixed maturity acquisitions			$	1,011,347					$	1,264,103					$	1,561,377
Effective annual yield (one year compounded)(2)			3.39		%				3.73		%				4.47		%
Average life (in years to next call)			21.7						15.8						18.7
Average life (in years to maturity)			31.7						26.3						29.4
Average rating			A+						A						A

(1)Fixed maturity acquisitions included unsettled trades of $7 million in 2021, $2 million in 2020 and $8 million in 2019.

(2)Tax-equivalent basis, where the yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.

37

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

For investments in callable bonds, the actual life of the investment will depend on whether the issuer calls the investment prior to the maturity date. Given our investments in callable bonds, the actual average life of our investments cannot be known at the time of the investment. Absent sales and "make-whole calls," however, the average life will not be less than the average life to next call and will not exceed the average life to maturity. Data for both of these average life measures is provided in the above chart.

 

During 2020 and 2021, acquisitions consisted of securities spanning a diversified range of issuers, industry sectors, and geographical regions. All of the acquired securities were investment grade. In addition to the fixed maturity acquisitions, Globe Life invested $258 million in other long-term investments in 2021 and $266 million in 2020. These investments include primarily investment funds. See Note—4 for further discussion.

New cash flow available for investment has been primarily provided through our insurance operations, cash received on existing investments, and proceeds from dispositions. While dispositions increase funds available for investment, as noted earlier in this discussion, they can also have a negative impact on investment income if the proceeds from the dispositions are reinvested at lower yields than the bonds that were disposed. Dispositions were $428 million in 2021 and $469 million in 2020.

Since fixed maturities represent such a significant portion of our investment portfolio, the remainder of the discussion of portfolio composition will focus on fixed maturities. See a breakdown of the Company's other investments in Other Investment Information within Note 4—Investments.

Selected information concerning the fixed maturity portfolio is as follows:

Fixed Maturity Portfolio Selected Information

			At December 31,
			2021						2020
Average annual effective yield(1)			5.17%						5.28%
Average life, in years, to:
Next call(2)			15.7						16.2
Maturity(2)			19.0						19.0
Effective duration to:
Next call(2,3)			10.6						11.0
Maturity(2,3)			12.2						12.3

(1)Tax-equivalent basis. The yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.

(2)Globe Life calculates the average life and duration of the fixed maturity portfolio two ways:

(a) based on the next call date which is the next call date for callable bonds and the maturity date for noncallable bonds, and

(b) based on the maturity date of all bonds, whether callable or not.

(3)Effective duration is a measure of the price sensitivity of a fixed-income security to a particular change in interest rates.

38

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Credit Risk Sensitivity. The following tables summarize certain information about the major corporate sectors and security types held in our fixed maturity portfolio at December 31, 2021 and 2020.

Fixed Maturities by Sector

December 31, 2021

(Dollar amounts in thousands)

			Below Investment Grade															Total Fixed Maturities															% of Total Fixed Maturities
			Amortized Cost, net			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value						Amortized Cost, net			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value						At Amortized Cost, net			At Fair Value
Corporates:
Financial
Insurance - life, health, P&C			$	57,470		$	3,825		$	(4,807)		$	56,488					$	2,345,116		$	513,844		$	(5,553)		$	2,853,407					13			13
Banks			26,980			614			—			27,594						983,317			207,466			(1,635)			1,189,148						6			6
Other financial			97,800			547			(1,103)			97,244						1,240,340			186,431			(2,161)			1,424,610						7			7
Total financial			182,250			4,986			(5,910)			181,326						4,568,773			907,741			(9,349)			5,467,165						26			26
Utilities
Electric			36,284			3,888			—			40,172						1,388,094			382,892			(395)			1,770,591						8			8
Gas and water			—			—			—			—						543,297			107,227			(617)			649,907						3			3
Total utilities			36,284			3,888			—			40,172						1,931,391			490,119			(1,012)			2,420,498						11			11
Industrial - Energy
Pipelines			85,222			11,051			(1,445)			94,828						918,746			203,324			(1,445)			1,120,625						5			5
Exploration and production			33,316			4,890			—			38,206						530,336			105,604			(238)			635,702						3			3
Oil field services			—			—			—			—						49,778			13,653			—			63,431						—			—
Refinery			—			—			—			—						89,032			24,199			—			113,231						1			1
Total energy			118,538			15,941			(1,445)			133,034						1,587,892			346,780			(1,683)			1,932,989						9			9
Industrial - Basic materials
Chemicals			—			—			—			—						673,699			145,114			(50)			818,763						4			4
Metals and mining			—			—			—			—						405,915			118,115			—			524,030						2			3
Forestry products and paper			—			—			—			—						65,608			15,946			—			81,554						—			—
Total basic materials			—			—			—			—						1,145,222			279,175			(50)			1,424,347						6			7
Industrial - Consumer, non-cyclical			84,106			13,059			(2,697)			94,468						2,256,802			475,012			(3,397)			2,728,417						13			13
Other industrials			25,565			3,182			—			28,747						1,254,243			286,889			(589)			1,540,543						7			7
Industrial - Transportation			25,555			5,588			—			31,143						559,399			135,581			(38)			694,942						3			3
Other corporate sectors			179,323			21,807			(3,429)			197,701						1,663,793			277,807			(9,288)			1,932,312						9			9
Total corporates			651,621			68,451			(13,481)			706,591						14,967,515			3,199,104			(25,406)			18,141,213						84			85
Other fixed maturities:
Government (U.S., municipal, and foreign)			—			—			—			—						2,695,796			304,537			(8,203)			2,992,130						15			14
Collateralized debt obligations			36,468			27,037			—			63,505						36,468			27,037			—			63,505						—			—
Other asset-backed securities			13,457			—			(414)			13,043						104,905			3,701			(430)			108,176						1			1
Mortgage-backed securities(1)			—			—			—			—						238			25			—			263						—			—
Total fixed maturities			$	701,546		$	95,488		$	(13,895)		$	783,139					$	17,804,922		$	3,534,404		$	(34,039)		$	21,305,287					100			100

(1)Includes Government National Mortgage Association (GNMA).

39

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Fixed Maturities by Sector

December 31, 2020

(Dollar amounts in thousands)

			Below Investment Grade															Total Fixed Maturities															% of Total Fixed Maturities
			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value						Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value						At Amortized Cost, net			At Fair Value
Corporates:
Financial
Insurance - life, health, P&C			$	57,658		$	3,894		$	(10,788)		$	50,764					$	2,275,843		$	563,349		$	(14,769)		$	2,824,423					13			13
Banks			27,014			15			(456)			26,573						993,946			259,489			(1,050)			1,252,385						6			6
Other financial			114,919			271			(8,245)			106,945						1,134,414			193,975			(8,402)			1,319,987						7			6
Total financial			199,591			4,180			(19,489)			184,282						4,404,203			1,016,813			(24,221)			5,396,795						26			25
Utilities
Electric			50,663			6,289			—			56,952						1,438,796			476,744			(108)			1,915,432						9			9
Gas and water			—			—			—			—						536,664			131,851			—			668,515						3			3
Total utilities			50,663			6,289			—			56,952						1,975,460			608,595			(108)			2,583,947						12			12
Industrial - Energy
Pipelines			85,327			1,624			(2,309)			84,642						923,756			187,851			(2,423)			1,109,184						5			5
Exploration and production			104,719			5,980			(678)			110,021						555,796			121,940			(678)			677,058						3			3
Oil field services			—			—			—			—						49,799			13,613			—			63,412						—			—
Refinery			—			—			—			—						89,371			22,793			—			112,164						1			1
Driller			1,902			—			18			1,920						1,902			—			18			1,920						—			—
Total energy			191,948			7,604			(2,969)			196,583						1,620,624			346,197			(3,083)			1,963,738						9			9
Industrial - Basic materials
Chemicals			—			—			—			—						642,258			152,016			—			794,274						4			4
Metals and mining			—			—			—			—						406,564			144,110			—			550,674						2			3
Forestry products and paper			—			—			—			—						88,804			21,588			—			110,392						1			1
Total basic materials			—			—			—			—						1,137,626			317,714			—			1,455,340						7			8
Industrial - Consumer, non-cyclical			96,265			8,680			(1,903)			103,042						2,233,324			576,007			(2,070)			2,807,261						13			13
Other industrials			25,661			3,925			—			29,586						1,260,646			328,986			(6)			1,589,626						7			7
Industrial - Transportation			25,777			4,315			—			30,092						566,935			175,405			—			742,340						3			3
Other corporate sectors			179,878			17,459			(3,595)			193,742						1,489,113			329,254			(4,142)			1,814,225						9			9
Total corporates			769,783			52,452			(27,956)			794,279						14,687,931			3,698,971			(33,630)			18,353,272						86			86
Other fixed maturities:
Government (U.S., municipal, and foreign)			—			—			—			—						2,313,855			341,176			(1,256)			2,653,775						13			13
Collateralized debt obligations			57,007			23,460			(8,869)			71,598						57,007			23,460			(8,869)			71,598						—			—
Other asset-backed securities			13,949			—			(2,727)			11,222						134,616			3,591			(3,778)			134,429						1			1
Mortgage-backed securities(1)			—			—			—			—						390			45			—			435						—			—
Total fixed maturities			$	840,739		$	75,912		$	(39,552)		$	877,099					$	17,193,799		$	4,067,243		$	(47,533)		$	21,213,509					100			100

(1)Includes GNMAs.

40

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the December 31, 2021 fixed maturity portfolio, representing 84% of amortized cost, net and 85% of fair value. The remainder of the portfolio is invested primarily in securities issued by the U.S. government and U.S. municipalities. The Company holds insignificant amounts in foreign government bonds, collateralized debt obligations, asset-backed securities, and mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers. At December 31, 2021, the total fixed maturity portfolio consisted of 843 issuers.

Fixed maturities had a fair value of $21.3 billion at December 31, 2021, compared with $21.2 billion at December 31, 2020. The net unrealized gain position in the fixed-maturity portfolio decreased from $4.0 billion at December 31, 2020 to $3.5 billion at December 31, 2021 due to an increase in market rates during the period.

For more information about our fixed maturity portfolio by component at December 31, 2021 and December 31, 2020, including a discussion of allowance for credit losses, an analysis of unrealized investment losses and a schedule of maturities, see Note 4—Investments.

An analysis of the fixed maturity portfolio by a composite quality rating at December 31, 2021 and December 31, 2020, is shown in the following tables. The composite rating for each security, other than private-placement securities managed by third parties, is the average of the security’s ratings as assigned by Moody’s Investor Service, Standard & Poor’s, Fitch Ratings, and Dominion Bond Rating Service, LTD. The ratings assigned by these four nationally recognized statistical rating organizations are evenly weighted when calculating the average. The composite quality rating is created utilizing a methodology developed by Globe Life using ratings from the various rating agencies noted above. The composite quality rating is not a Standard & Poor's credit rating. Standard & Poor's does not sponsor, endorse or promote the composite quality rating and shall not be liable for any use of the composite quality rating. Included in the following chart are private placement fixed maturity holdings of $538 million at amortized cost, net of allowance for credit losses ($577 million at fair value) for which the ratings were assigned by the third-party managers.

Fixed Maturities by Rating

At December 31, 2021

(Dollar amounts in thousands)

			Amortized Cost, net						% of Total						Fair Value						% of Total						Average Composite Quality Rating on Amortized Cost, net
Investment grade:
AAA			$	761,526					4						$	867,728					4
AA			2,215,179						13						2,412,947						11
A			4,487,607						25						5,584,588						26
BBB+			3,779,051						21						4,616,977						22
BBB			4,289,044						24						5,174,667						24
BBB-			1,570,969						9						1,865,241						9
Total investment grade			17,103,376						96						20,522,148						96						A-
Below investment grade:
BB			537,064						3						583,608						3
B			128,402						1						136,026						1
Below B			36,080						—						63,505						—
Total below investment grade			701,546						4						783,139						4						BB-
			$	17,804,922					100						$	21,305,287					100
Weighted average composite quality rating																											A-

41

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Fixed Maturities by Rating

At December 31, 2020

(Dollar amounts in thousands)

			Amortized Cost						% of Total						Fair Value						% of Total						Average Composite Quality Rating on Amortized Cost
Investment grade:
AAA			$	713,053					4						$	848,621					4
AA			1,657,270						10						1,873,323						9
A			4,566,999						26						5,969,677						28
BBB+			3,634,583						21						4,612,898						22
BBB			4,137,099						24						5,088,114						24
BBB-			1,644,056						10						1,943,777						9
Total investment grade			16,353,060						95						20,336,410						96						A-
Below investment grade:
BB			686,184						4						692,609						3
B			115,646						1						122,104						1
Below B			38,909						—						62,386						—
Total below investment grade			840,739						5						877,099						4						BB-
			$	17,193,799					100						$	21,213,509					100
Weighted average composite quality rating																											A-

The overall quality rating of the portfolio is A-, the same as year-end 2020. Fixed maturities rated BBB are 54% of the total portfolio at December 31, 2021 compared with 55% at year-end 2020. While this ratio is high relative to our peers, we have limited exposure to higher-risk assets such as derivatives, equities, and asset-backed securities. Additionally, the Company does not participate in securities lending and has no off-balance sheet investments as of December 31, 2021. Of our fixed maturity purchases, BBB securities generally provide the Company with the best risk-adjusted, capital-adjusted returns largely due to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets.

An analysis of changes in our portfolio of below-investment grade fixed maturities at amortized cost, net of allowance for credit losses is as follows:

Below-Investment Grade Fixed Maturities

(Dollar amounts in thousands)

			Year Ended December 31,
			2021						2020
Balance at beginning of period			$	840,739					$	674,155
Downgrades by rating agencies			—						230,334
Upgrades by rating agencies			(67,078)						(14,618)
Dispositions			(78,712)						(49,037)
Provision for credit losses			2,959						(3,346)
Amortization and other			3,638						3,251
Balance at end of period			$	701,546					$	840,739

Our investment policy calls for investing primarily in fixed maturities that are investment grade and meet our quality and yield objectives. Thus, any increases in below-investment grade issues are typically a result of ratings downgrades of existing holdings. Below-investment grade bonds at amortized cost, net of allowance for credit

42

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

losses, were 12% of our shareholders’ equity, excluding the effect of unrealized gains and losses on fixed maturities as of December 31, 2021. Globe Life invests long term and as such, one of our key criterion in our investment process is to select issuers that have the ability to weather multiple financial cycles.

Market Risk Sensitivity. Globe Life's investment securities are exposed to interest rate risk, meaning the effect of changes in financial market interest rates on the current fair value of the Company’s investment portfolio. Since 94% of the carrying value of our investments is attributable to fixed maturity investments and these investments are predominately fixed-rate investments, the portfolio is highly subject to market risk. Declines in market interest rates generally result in the fair value of the investment portfolio rising, and increases in interest rates cause the fair value to decline. Under normal market conditions, we are not concerned about unrealized losses that are interest rate driven since we would not expect to realize them. Globe Life does not intend to sell the securities prior to maturity and, likely, will not be required to sell the securities prior to recovery of amortized cost. The long-term nature of our insurance policy liabilities and strong operating cash-flow substantially mitigate any future need to liquidate portions of the portfolio. The increase or decrease in the fair value of insurance liabilities and debt due to increases or decreases in market interest rates largely offsets the impact of rates on the investment portfolio. However, as is permitted by GAAP, these liabilities are not recorded at fair value.

 

The following table illustrates the interest rate risk sensitivity of our fixed maturity portfolio at December 31, 2021 and 2020. This table measures the effect of a parallel shift in interest rates (as represented by the U.S. Treasury curve) on the fair value of the fixed maturity portfolio. The data measures the change in fair value arising from an immediate and sustained change in interest rates in increments of 100 basis points.

Market Value of Fixed Maturity Portfolio

(Dollar amounts in thousands)

						At December 31,
Change in Interest Rates(1)						2021						2020
(200)						$	26,939,000					$	26,976,000
(100)						23,916,000						23,874,000
0						21,305,000						21,214,000
100						19,045,000						18,926,000
200						17,082,000						16,953,000

(1) In basis points.

43

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

OPERATING EXPENSES

Operating expenses are included in the "Corporate and Other" segment and are classified into two categories: insurance administrative expenses and expenses of the Parent Company. Insurance administrative expenses generally include expenses incurred after a policy has been issued. As these expenses relate to premium for a given period, management measures the expenses as a percentage of premium income. The Company also views stock-based compensation expense as a Parent Company expense. Expenses associated with the issuance of our insurance policies are reflected as acquisition expenses and included in the determination of underwriting margin.

The following table is an analysis of operating expenses for the three years ended December 31, 2021.

Operating Expenses Selected Information

(Dollar amounts in thousands)

			2021												2020												2019
			Amount						% of Premium						Amount						% of Premium						Amount						% of Premium
Insurance administrative expenses:
Salaries			$	115,852					2.8						$	105,935					2.8						$	102,862					2.8
Other employee costs			41,841						1.0						39,885						1.0						34,947						1.0
Information technology costs			47,923						1.2						45,742						1.2						42,927						1.2
Legal costs			15,494						0.4						11,256						0.3						10,286						0.3
Other administrative costs			50,521						1.2						48,129						1.3						49,299						1.4
Total insurance administrative expenses			271,631						6.6						250,947						6.6						240,321						6.7
Parent company expense			9,553												9,891												10,260
Stock compensation expense			30,272												35,892												44,843
Administrative settlements			—												—												400
Legal proceedings			8,139												3,275												8,358
Non-operating expenses			2,434												1,033												643
Total operating expenses, per Consolidated Statements of Operations			$	322,029											$	301,038											$	304,825
			2021												2020												2019
			Amount						%						Amount						%						Amount						%
Total insurance administrative expenses increase (decrease) over prior year			$	20,684					8.2						$	10,626					4.4						$	16,380					7.3
Total operating expenses increase (decrease) over prior year			20,991						7.0						(3,787)						(1.2)						25,240						9.0

Total operating expenses increased 7% over the prior year period primarily due to an 8% increase in insurance administrative expenses. Insurance administrative expenses increased primarily due to higher employee-related expenses, including pension costs and information technology salaries. Pension expense increased due to the lower discount rate used to determine net periodic benefit costs in 2021 as compared to 2020. The decrease in stock-based compensation expense was primarily due to fewer performance based equity awards in 2021 as compared to the same period in 2020. Insurance administrative expenses as a percent of premium were in line with 2020.

44

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

SHARE REPURCHASES

Globe Life has an ongoing share repurchase program that began in 1986, and is reviewed with the Board of Directors by management quarterly and annually reaffirmed by the Board of Directors. With no specified authorization amount, we determine the amount of repurchases based on the amount of the excess cash flow at the Parent Company, general market conditions, and other alternative uses. The majority of these purchases are made from excess cash flow. Excess cash flow at the Parent Company is primarily comprised of dividends received from the insurance subsidiaries less interest expense paid on its debt, dividends paid to Parent Company shareholders, and other limited operating activities. Additionally, when stock options are exercised, proceeds from these exercises and the resulting tax benefit are used to repurchase additional shares on the open market to minimize dilution as a result of the option exercises. On August 4, 2021, the Board of Directors reauthorized the Parent Company’s share repurchase program in amounts and with timing that management, in consultation with the Board, determines to be in the best interest of the Company and its shareholders.

The following table summarizes share purchase activity for each of the last three years.

 

Analysis of Share Purchases

(Amounts in thousands)

			2021												2020												2019
Purchases with:			Shares						Amount						Shares						Amount						Shares						Amount
Share repurchase program			4,784						$	455,030					4,459						$	380,112					3,932						$	350,080
Option proceeds			858						86,405						676						63,754						1,209						109,489
Total			5,642						$	541,435					5,135						$	443,866					5,141						$	459,569

Throughout the remainder of this discussion, share purchases refer only to those made from excess cash flow at the Parent Company.

 

FINANCIAL CONDITION

 

Liquidity. Liquidity provides Globe Life with the ability to meet on demand the cash commitments required to support our business operations and meet our financial obligations. Our liquidity is primarily derived from multiple sources: positive cash flow from operations, a portfolio of marketable securities, a revolving credit facility, commercial paper and Federal Home Loan Bank (FHLB).

Insurance Subsidiary Liquidity. The operations of our insurance subsidiaries have historically generated substantial cash inflows in excess of immediate cash needs. Cash inflows for the insurance subsidiaries primarily include premium and investment income. In addition to investment income, maturities and scheduled repayments in the investment portfolio are cash inflows. Cash outflows from operations include policy benefit payments, commissions, administrative expenses, and taxes. A portion of the excess cash inflows in the current year will provide for the payment of future policy benefits and are invested primarily in long-term fixed maturities as they better match the long-term nature of these obligations. Excess cash available from the insurance subsidiaries’ operations is generally distributed as a dividend to the Parent Company, subject to regulatory restrictions. The dividends are generally paid in amounts equal to the subsidiaries’ prior year statutory net income excluding realized capital gains. While the leading source of the excess cash is investment income, a significant portion of the excess cash also comes from underwriting income due to our high underwriting margins and effective expense control. While the insurance subsidiaries routinely generate more operating cash inflows than cash outflows annually, the companies also have the entire available-for-sale fixed maturity investment portfolio available to create additional cash flows if required.

During the year, four of our insurance subsidiaries became members of the FHLB of Dallas. FHLB membership provides the insurance subsidiaries with access to various low cost collateralized borrowings and funding agreements. While not a primary source of liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed. Refer to Note 11—Debt for further details.

45

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Parent Company Liquidity. An important source of Parent Company liquidity is the dividends from its insurance subsidiaries. These dividends are received throughout the year and are used by the Parent Company to pay dividends on common and preferred stock, interest and principal repayment requirements on Parent Company debt, and operating expenses of the Parent Company.

			Year Ended December 31,
			(Amounts in Thousands)
			Projected 2022						2021						2020						2019
Liquidity Sources:
Dividends from Subsidiaries			$	400,000					$	478,535					$	485,871					$	479,988
Excess Cash Flows			285,000						370,120						387,606						374,232

For more information on the restrictions on the payment of dividends by subsidiaries, see the Restrictions section of Note 12—Shareholders' Equity. Although these restrictions exist, dividend availability from subsidiaries historically has been more than sufficient for the cash flow needs of the Parent Company.

Additional sources of liquidity for the Parent Company are cash, intercompany receivables, intercompany borrowings, public debt markets, term loans, and a revolving credit facility. At December 31, 2021, the Parent Company had access to $119 million of invested cash, net intercompany receivables and other liquid assets. The credit facility is discussed below.

Short-Term Borrowings. An additional source of Parent Company liquidity is a revolving credit facility with a group of lenders which allows unsecured borrowings and stand-by letters of credit up to $750 million, which could be extended up to $1 billion. While Globe Life can request the extension, it is not guaranteed. Up to $250 million in letters of credit can be issued against the facility. The facility is further designated as a back-up line of credit for a commercial paper program under which commercial paper may be issued at any time, with total commercial paper outstanding not to exceed the facility maximum less any letters of credit issued. As of December 31, 2021, we had available $295 million of additional borrowing capacity under this facility, compared with $360 million a year earlier. Interest charged on the commercial paper program resembles variable rate debt due to its short term nature. Globe Life has consistently been able to issue commercial paper as needed during the three years ended December 31, 2021. As discussed in Note 11—Debt, on September 30, 2021, Globe Life amended the credit agreement dated August 24, 2020. The five-year credit agreement will now mature on September 30, 2026. As of December 31, 2021, the Parent Company was in full compliance with all covenants related to the aforementioned debt.

As a part of the credit facility, Globe Life has stand-by letters of credits. These letters are issued among our subsidiaries, one of which is an offshore captive reinsurer, and have no impact on company obligations as a whole. Any future regulatory changes that restrict the use of off-shore captive reinsurers might require Globe Life to obtain third-party financing, which could cause an insignificant increase in financing costs. On October 26, 2021, the letters of credit were amended to reduce the amount outstanding from $135 million as of December 31, 2020 to $125 million at December 31, 2021.

 

The Parent Company expects to have readily available funds for 2022 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiaries through internally generated cash flow and the credit facility. In the unlikely event that more liquidity is needed, the Company could generate additional funds through multiple sources including, but not limited to, the issuance of debt, an additional short-term credit facility, and intercompany borrowing. Refer to Note 6—Commitments and Contingencies and the discussion surrounding the Company's obligations over the next five years.

As noted above, the Parent Company had access to $119 million of liquid assets available as of December 31, 2021. This liquidity is available to the Company in the event additional funds are needed to support the targeted capital levels within our insurance subsidiaries due to adverse impacts of COVID-19.

Consolidated Liquidity. Consolidated net cash inflows provided from continuing operations were $1.44 billion in 2021, compared with $1.48 billion in 2020. In addition to cash inflows from operations, our companies received proceeds from maturities, calls, and repayments of fixed maturities in the amount of $311 million in 2021, compared

46

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

with $416 million in 2020. As noted under the caption Credit Facility in Note 11, the Parent Company has in place a revolving credit facility. The insurance companies have no additional outstanding credit facilities.

Cash and short-term investments were $161 million at the end of 2021 compared with $203 million at the end of 2020. In addition to these liquid assets, the entire $21.3 billion (fair value at December 31, 2021) portfolio of fixed income securities is available for sale in the event of an unexpected need. Approximately 97% of our fixed income securities are publicly traded, freely tradable under SEC Rule 144, or qualified for resale under SEC Rule 144A. We generally expect to hold fixed income securities to maturity, and even though these securities are classified as available for sale, we have the ability and intent to hold any securities until recovery or maturity. Our strong cash flows from operations, ongoing investment maturities, and credit line availability make any need to sell securities for liquidity highly unlikely.

Capital Resources. The Parent Company's capital structure consists of short-term debt (the commercial paper facility and current maturities of long-term debt), long-term debt, and shareholders’ equity.

Debt: The carrying value of the long-term debt was $1.5 billion at December 31, 2021, which decreased from $1.7 billion a year earlier. A complete analysis and description of long-term debt issues outstanding is presented in Note 11—Debt.

Subsidiary Capital: The National Association of Insurance Commissioners (NAIC) has established a risk-based factor approach for determining threshold risk-based capital levels for all insurance companies. This approach was designed to assist the regulatory bodies in identifying companies that may require regulatory attention. A Risk-Based Capital (RBC) ratio is typically determined by dividing adjusted total statutory capital by the amount of risk-based capital determined using the NAIC’s factors. If a company’s RBC ratio approaches two times the RBC amount, the company must file a plan with the NAIC for improving their capital levels (this level is commonly referred to as “Company Action Level” RBC). Companies typically hold a multiple of the Company Action Level RBC depending on their particular business needs and risk profile.

Our goal is to maintain statutory capital within our insurance subsidiaries at levels necessary to support our current ratings. For 2021, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%. The Company concludes that this capital level is more than adequate and sufficient to support its current ratings, given the nature of its business and its risk profile. As of December 31, 2021, our consolidated Company Action Level RBC ratio was 315% compared with 309% in prior year.

In August 2021, the NAIC fully adopted new and expanded C-1 investment factors. The adoption of these factors resulted in higher amounts of required capital related to our investment portfolio. In addition to the expanded C-1 factors, additional capital was needed by the end of the year to support higher sales levels, growth of our in-force business, higher COVID-19 net life claims, and the acquisition of Beazley Benefits. The Parent Company is committed to maintaining the targeted consolidated RBC ratio at its insurance subsidiaries and has sufficient liquidity available to provide additional capital if necessary.

Shareholder's Equity: As noted under the caption Analysis of Share Purchases within this report, we have an ongoing share repurchase program.

 

Globe Life has continually increased the quarterly dividend on its common shares over the past three years.

			Year Ended December 31,
			Projected 2022						2021						2020						2019
Quarterly dividend by annual year			$	0.2075					$	0.1975					$	0.1875					$	0.1725

Shareholders’ equity was $8.6 billion at December 31, 2021, compared with $8.8 billion at December 31, 2020, a decrease of $128 million or 1%. Since December 31, 2020, shareholders’ equity was reduced by $409 million due to after-tax unrealized losses in the fixed-maturity portfolio as interest rates increased over the period offset by $745 million of net income during this period. In addition, shareholders' equity was reduced by $455 million in share

47

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

purchases under the repurchase program and an additional $86 million in share purchases to offset the dilution from stock option exercises.

We plan to use excess cash available at the Parent Company as efficiently as possible in the future. Possible uses of excess cash flow include, but are not limited to, share repurchases, acquisitions, increases in shareholder dividends, investment in securities, or repayment of short-term debt. We will determine the best use of excess cash after ensuring that targeted capital levels are maintained in our insurance subsidiaries. If market conditions are favorable, we currently expect that share repurchases will continue to be a primary use of those funds.

As discussed in Note 1—Significant Accounting Policies, the Company will adopt ASU 2018-12, Financial Services–Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI), effective on January 1, 2023. The accounting adoption will have no economic impact on the cash flows of our business nor influence our business model of providing basic protection oriented products to the underserved and low to middle-income market. In addition, the adoption will not impact our capital management philosophies. It will, however, modify the timing of when profits emerge on our insurance policies. We are anticipating GAAP net income and net operating income to increase under the new standard primarily due to the significant reduction in DAC amortization in the near or intermediate term. With respect to equity, we anticipate a significant decrease as a result of the requirement to use current discount rates to remeasure the policy liabilities and record the offset through AOCI at adoption. Since current rates (upper-medium grade) are lower than the locked-in rates assumed in valuing our policy liabilities, we will have unrealized interest rate loss recognized through AOCI.

We maintain a significant available-for-sale fixed maturity portfolio to support our insurance policy liabilities. Current accounting guidance requires that we revalue our portfolio to fair market value at the end of each accounting period. The period-to-period changes in fair value, net of their associated impact on deferred acquisition costs and income tax, are reflected directly in shareholders’ equity. Changes in the fair value of the portfolio can result from changes in market rates.

While a majority of invested assets are revalued, accounting rules do not permit interest-bearing insurance policy liabilities to be valued at fair value in a consistent manner as that of assets, with changes in value applied directly to shareholders’ equity. Due to the size of our policy liabilities in relation to our shareholders’ equity, an inconsistency exists in measurement, which may have a material impact on the reported value of shareholders’ equity. Fluctuations in interest rates cause undue volatility in the period-to-period presentation of our shareholders’ equity, capital structure, and financial ratios. Due to the long-term nature of our fixed maturities and liabilities and the strong cash flows consistently generated by our insurance subsidiaries, we have the intent and ability to hold our securities to maturity. As such, we do not expect to incur losses due to fluctuations in market value of fixed maturities caused by market rate changes and temporarily illiquid markets. Accordingly, our management, credit rating agencies, lenders, many industry analysts, and certain other financial statement users prefer to remove the effect of this accounting rule when analyzing our balance sheet, capital structure, and financial ratios.

48

GL 2021 FORM 10-K

---

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

The following table presents selected data related to our capital resources. Additionally, the table presents the effect of this accounting guidance on relevant line items, so that investors and other financial statement users may determine its impact on Globe Life's capital structure. Excluding the effect of unrealized gains and losses on the fixed maturity portfolio from shareholders' equity is considered non-GAAP. Below we include the reconciliation to GAAP.

Selected Financial Data

(Dollar amounts in thousands, except per share data)

			At
			December 31, 2021												December 31, 2020												December 31, 2019
			GAAP						Effect of Accounting Rule Requiring Revaluation(1)						GAAP						Effect of Accounting Rule Requiring Revaluation(1)						GAAP						Effect of Accounting Rule Requiring Revaluation(1)
Fixed maturities			$	21,305,287					$	3,500,365					$	21,213,509					$	4,019,710					$	18,907,147					$	2,491,371
Deferred acquisition costs(2)			4,914,728						(4,327)						4,595,444						(5,955)						4,341,941						(7,488)
Total assets			29,768,048						3,496,038						29,046,731						4,013,755						25,977,460						2,483,883
Short-term debt			479,644						—						254,918						—						298,738						—
Long-term debt			1,546,494						—						1,667,886						—						1,348,988						—
Shareholders' equity			8,642,806						2,761,870						8,771,092						3,170,866						7,294,307						1,962,268
Book value per diluted share			85.97						27.47						83.19						30.07						66.02						17.76
Debt to capitalization(3)			19.0		%				(6.6)		%				18.0		%				(7.6)		%				18.4		%				(5.2)		%
Diluted shares outstanding			100,535												105,429