GL Globe Life Inc. - 10-K

Item 1A. Risk Factors

Risks Related to Our Business

The following is a summary of the material risks and uncertainties that could adversely affect our business, financial condition, and results of operations.

Business and Operational Risks

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

Our future success depends, in substantial part, on our ability to recruit, hire, and motivate highly-skilled insurance personnel. Further, the development and retention of producing agents are critical to supporting sales growth in our agency operations because our insurance sales are primarily made by these individuals.

If we do not provide an attractive career opportunity with competitive compensation as well as motivation for producing agents to increase sales of our products, our growth could be impeded. Providing such opportunity 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 companies.

In addition, a failure to effectively develop new methods of reaching consumers, realize cost efficiencies or generate an attractive value proposition in our Direct to Consumer Division business could result in reduced sales and profits.

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 either organized labor union groups or affinity groups, or adverse changes in the public’s receptivity to Direct to Consumer marketing initiatives could negatively affect our life insurance business.

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 our sales agents are employees. From time to time, we are subject to civil litigation, including class and collective action litigation, alleging that we have improperly classified certain of our sales agents as independent contractors. In September 2024, the Equal Employment Opportunity Commission ("EEOC") notified us that it had determined that all sales agents affiliated with State General Agent Simon Arias were employees, not independent contractors, of Globe Life Inc. and/or AIL. Such determination is not binding but any potential civil action brought by the EEOC would likely include such an allegation. A future adverse judgment in connection with any such civil litigation described above could result in substantial damages. Future changes in rules, regulations or interpretations of existing rules and regulations, or significant adverse judgments in litigation, could require us to reclassify all or a portion of our agents as employees and the impact could significantly increase our operating costs and negatively impact our insurance business.

The use of third-party vendors, including independent sales agents, to support the Company's operations makes the Company susceptible to the operational risk of those third parties, which could lower revenues, increase costs, reduce profits, disrupt business, or damage the Company’s reputation.

The Company utilizes third-party vendors, including independent sales agents, to provide certain business services and functions, which exposes the Company to risks outside of its control. The reliance on these third-party vendors creates a number of business risks, such as the risk that the Company may not maintain service quality, control or effective management of the outsourced business operations and that the Company cannot control the data, facilities, networks, emerging technology or information systems used by third-party vendors. We employ controls and procedures designed to facilitate service quality of our third-party vendors and mitigate risks resulting from the use of third-party vendors; however, such controls and procedures cannot be 100% effective in all cases. The

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Company may be adversely affected by a third-party vendor who operates in a poorly controlled manner or fails to deliver contracted services, which could lower revenues, increase costs, reduce profits, disrupt business, or damage the Company’s reputation.

Extensive federal and state laws regulate our business, imposing certain requirements that independent sales agents must follow in dealing with clients. Misconduct of our independent sales agents could result in violations of law by, or claims against, us or our subsidiaries. From time to time, we are subject to private litigation as a result of alleged misconduct by independent agents. We employ controls and procedures designed to prevent and detect agent misconduct; however, such controls and procedures cannot be 100% effective in all cases. Instances of misconduct or non-compliance or violations of laws or regulations by our independent sales agents could result in adverse findings in either examinations or litigation and subject us to sanctions, monetary liabilities, restrictions on or loss of the operation of our business or reputational harm, any of which could have a material adverse effect on our business, financial condition or results of operations.

Additionally, the Company is at risk of being unable to meet legal, regulatory, financial or customer obligations if the data, information systems, facilities or networks of a third-party vendor are disrupted, damaged or fail, whether due to physical disruptions, such as fire, natural disaster, pandemic or power outage, or due to cybersecurity incidents, ransomware or other impacts to vendors, including labor strikes, political unrest and terrorist attacks.

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 income 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 and/or credit spreads 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 and solvency 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 Globe Life Inc. (Parent Company) should additional statutory capital be required.

Our investment portfolio contains certain alternative investments that may be illiquid and volatile, which could negatively affect our investment income and liquidity.

Over the past several years, we have increased our investment in alternative investments, such as limited partnerships. These and other similar investments may have different, more significant risk characteristics than investments in fixed maturity securities, may be more volatile and may be illiquid due to restrictions on sales, transfers and redemption terms, all of which could negatively affect our investment income and overall portfolio liquidity.

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These alternative investments may not meet regulatory admissibility requirements or may result in increased regulatory capital charges to the insurance subsidiaries that hold these investments, which could limit those subsidiaries’ ability to pay dividends and negatively impact our liquidity.

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 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.

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.

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. in addition, our Bermuda reinsurance subsidiaries are subject to regulation established by the Bermuda Monetary Authority ("BMA"). 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.

Under an intercompany reinsurance agreement initiated in 2025, we have ceded approximately $1.2 billion of our life statutory reserves from Liberty National Life Insurance Company, Globe Life And Accident Insurance Company, and American Income Life Insurance Company to GL Re, as of December 31, 2025. Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structure and could require the holding company to contribute additional capital to GL Re or our U.S. insurance subsidiaries to recapture ceded business.

Other sources of liquidity include a variety of short-term and long-term instruments, including our credit facility, Pre-Capitalized Trust Securities ("P-CAPS") facility, commercial paper, long-term debt, Federal Home Loan Bank ("FHLB"), intercompany financing and reinsurance.

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.

We are subject to liquidity risks associated with sourcing a concentration of our funding from the FHLB.

We use institutional funding agreements originating from FHLB, which from time to time serve as a significant source of our liquidity. Additionally, we use agreements with the FHLB to meet near-term liquidity needs. If the FHLB

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were to change its definition of eligible collateral, we could be required to post additional amounts of collateral in the form of cash or other assets. Additionally, if our creditworthiness falls below the FHLB’s requirements or if legislative or other political actions cause changes to the FHLB’s mandate or to the eligibility of life insurance companies to be members of the FHLB system, we could be required to find other sources to replace this funding, which may prove difficult and increase our liquidity risk.

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 newly 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 and maintain required capital levels and credit ratings.

In the 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, 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.

We have become subject to, and may in the future be subject to, short selling strategies driving down the market price of our common stock.

Short selling is the practice of selling securities that the seller does not own but may have borrowed with the intention of buying identical securities back at a later date. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. Because it is in the short seller’s best interests for the price of the securities to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding the relevant issuer, its business prospects and similar matters calculated to or which may create negative market momentum, which may permit them to obtain profits for themselves as a result of selling the stock short. Companies, like us, that are subject to unfavorable allegations, even if untrue, may have to expend a significant amount of resources to investigate such allegations and/or defend themselves, including in connection with securityholder litigation against Globe Life Inc. or investigations by regulators related to or prompted by such allegations.

We have been the target of several short sellers who have published reports making allegations about the Company, which resulted in a significant decline in the price of our common stock. In addition, these reports resulted in significant negative publicity against us, damaged our reputation, and resulted in a putative securities class action litigation and derivative shareholder litigation. See Note 5—Commitments and Contingencies f or a discussion of such litigation. We have already expended significant resources to defend and repair our reputation. We will continue to defend against any unfounded and unsubstantiated claims about our business, our disclosures, and the integrity of our financial statements, which may require us to expend significant resources.

We may be subject to additional short seller reports and activity in the future. The publication of any such commentary regarding us may bring about a temporary, or long term, decline in the market price of our common stock. No assurances can be made that similar declines in the market price of our common stock or negative publicity will not occur in the future, in connection with such commentary by short sellers or otherwise.

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Industry Risks

Variations in actual-to-expected rates of mortality, morbidity and policyholder behavior 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 assumptions involve the exercise of significant judgment with respect to levels or trends of mortality, morbidity, lapses, and discount rates. Changes in assumptions could materially impact our financial condition and results of operations. Further, 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.

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, 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 commonly experiences health care inflation every year, annual premium rate increases for the Medicare Supplement policies are typically necessary. Accordingly, the inability 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 or other public health issues, 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. In addition, government, business, and consumer reactions to public health events could result in material negative impacts to our business and operations.

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 our producing agents or our employees performing operational tasks and supporting computer-based data processing, or impair or destroy our capability to

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transmit, store, and retrieve valuable data. In addition, in the event that a significant number of our management were unavailable following a disaster, the achievement of our strategic objectives could be negatively impacted.

We are exposed to model risk, which is the risk of financial loss or reputational damage or adverse regulatory impacts caused by model errors or limitations, incorrect implementation of models, or misuse of or overreliance upon models.

Models are utilized by our businesses and corporate areas primarily to project future cash flows associated with pricing products, calculating reserves and valuing assets, as well as in evaluating risk and determining capital requirements, among other uses. These models may not operate properly and may rely on assumptions and projections that are inherently uncertain. As our businesses continue to grow and evolve, the number and complexity of models we utilize expands, increasing our exposure to error in the design, implementation or use of models, including the associated input data and assumptions.

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 events and natural disasters, 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.

Legal, Regulatory, and Compliance Risks

Recent volatility in the trading price of our common stock has and can be expected to result in securities class action litigation.

In April 2024, the trading price of our common stock dropped following the publication of certain short seller reports. As of the date of this Report, one putative securities class action and five shareholder derivative lawsuits have been filed against Globe Life Inc. related to this event. While we intend to defend such actions vigorously, any judgment against us or any future stockholder litigation could have a material adverse effect on our business, financial condition or results of operations.

Our businesses are heavily regulated and changes in regulation or regulatory scrutiny may have a material adverse impact on our business, financial condition or results of operation.

Insurance companies, including our insurance subsidiaries, are subject to extensive supervision and regulation in the states in which they conduct 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 for our life, Medicare Supplement and other supplemental health products, as well as other terms and conditions included in the insurance policies offered by our insurance subsidiaries, marketing practices, advertising, use of emerging technologies, agent licensing, independent agent practices, policy forms, capital adequacy, solvency, reserves and permitted investments.

Regulatory authorities also have the power to conduct investigations, and to bring administrative or judicial proceedings against us, which could result in suspension or revocation of our licenses, cease and desist orders, fines, civil penalties, disgorgement, criminal penalties or other disciplinary action that could have a material adverse impact on our business, financial condition or results of operation. Press coverage and other public statements that allege wrongdoing, even if untrue, can lead to increased regulatory inquiries or investigations.

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. Additionally, any violation or alleged violation of law or regulations could result in significant legal costs or in legal proceedings

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that may result in monetary and legal remedies being imposed against the Company, which could have a material adverse effect on our business, financial condition or results of operations.

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 Policie s 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 third parties 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. We are subject to the privacy and security provisions of federal laws including, but not limited to, the Gramm-Leach-Biley Act of 1999 ("GLBA"), the Health Information Technology for Economic and Clinical Health Act ("HITECH"), and the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). HIPAA additionally requires that we impose privacy and security requirements on our third-party business associates. Various state laws also address the use and disclosure of personally identifiable information, to the extent they are more restrictive than these and other federal laws. Further, approximately half of the states have adopted a form of the National Association of Insurance Commissioners’ data security model law, which imposes security requirements. Noncompliance with these 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 information systems or manage responsible use of emerging technologies, including artificial intelligence, could adversely affect our financial condition and results of operations at the Company.

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. Our ability to modernize and maintain our information technology systems and infrastructure requires us to commit significant resources and effective planning and execution. This modernization includes the innovative, responsible, and secure use of artificial intelligence ("AI").

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. As a result of increasingly complex AI risks, more frequent and sophisticated cyberattacks and the highly regulated nature of the insurance industry, we must continually implement new, and maintain existing, technology or adapt existing technology to protect against security and privacy incidents and to meet compliance requirements of new and proposed regulations.

Any incident affecting 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,

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subject us to significant civil and criminal liability, constrain cash flows, or require us to incur significant technical, legal, or other expenses. In addition, should we be unable to implement or maintain our technology effectively, efficiently, or in a timely manner, it could result in poor customer experience, poor agent 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.

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.

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, including short seller reports and allegations of independent agent misconduct could damage our brand or reputation, which could adversely impact our ability to recruit and retain agents, our ability to market our products, and the persistency of in force policies. A reduction in the number of agents selling our products, or the rate of growth of the number of agents selling our products may have an adverse impact on product sales and profit, and such impact may be material.

We may not meet expectations relating to corporate responsibility and sustainability standards and practices .

Certain existing or potential investors, customers and regulators evaluate our business or other practices according to a variety of corporate responsibility and sustainability standards and expectations. Certain of our regulators have proposed or adopted, or may propose or adopt, certain corporate responsibility and sustainability rules or standards that would apply to our business. Our practices may be judged by these standards that are continually evolving and not always clear. Our decisions or priorities are made with the considerations of all stakeholders. Prevailing corporate responsibility and sustainability standards and expectations may also reflect contrasting or conflicting values or agendas.

We may not meet these corporate responsibility and sustainability expectations. Failure to meet, or achieve progress on, these expectations, 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. In addition, our policies, and processes to evaluate and manage these standards in coordination with other business priorities may not prove completely effective or satisfy investors, customers, regulators, or others.

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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 2023, 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 through exclusive, direct-to-consumer and independent distribution channels 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 and supplemental health, and the investment segment that supports the product lines.

Insurance Product Line Segments. The insurance product line segments involve the marketing, underwriting, and administration of policies. Each product line is further subdivided 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 liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below:

Net investment income

(Required interest on policy liabilities)

Excess investment income

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GLOBE LIFE INC.

Management's Discussion & Analysis

Globe Life serves the lower-middle to middle-income market. We believe this market is underserved, has significant growth potential, and provides us with a distinct competitive advantage. This advantage is protected due not only to our ability to efficiently reach this market through both exclusive and direct to consumer distribution channels, but also due to the amount of data and experience we possess, as we have been in this same market for over 60 years with essentially the same products. The basic protection life and health insurance products we offer are specifically designed to help provide financial security to consumers in this market.

Current Highlights.

• Net income as a return on equity (ROE) for the year ended December 31, 2025 was 20.9% and net operating income as an ROE, excluding accumulated other comprehensive income (1) was 16.0%.

• Total premium increased 5% over the same period in the prior year. Life premium increased 3% for the period from $3.3 billion in 2024 to $3.4 billion in 2025. Health premium increased 9% to $1.5 billion over the prior-year period of $1.4 billion.

• Total net sales increased 13% over the same period in the prior year from $840 million in 2024 to $948 million in 2025. The average producing agent count across all of the exclusive agencies increased 3% over the prior year.

• Book value per share increased 19% over the same period in the prior year from $62.50 to $74.17. Book value per share, excluding accumulated other comprehensive income (1) , increased 11% over the prior year from $86.40 in 2024 to $96.16 in 2025.

• For the year ended December 31, 2025, the Company repurchased 5.4 million shares of Globe Life Inc. common stock at a total cost of $685 million for an average share price of $126.41.

The following graphs represent net income and net operating income (1) for the twelve month periods ended December 31, 2025 and 2024.

(1) As shown in the charts above, net operating income is primarily comprised of insurance underwriting margin plus excess investment income and annuity and other income, offset by operating expenses 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 accumulated other comprehensive income ("AOCI"), is considered a non-GAAP measure. Management utilizes this measure to view the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. The impact of the adjustment to exclude AOCI is $(1.8) billion and $(2.0) billion for the year ended December 31, 2025 and 2024, respectively.

Book value per share, excluding AOCI, is also considered a non-GAAP measure. Management utilizes this measure to view the book value of the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. The impact of the adjustment to exclude AOCI is $(21.99) and $(23.90) per share for the year ended December 31, 2025 and 2024, respectively.

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

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GLOBE LIFE INC.

Management's Discussion & Analysis

Summary of Operations.

• Net income totaled $1.16 billion in 2025, compared with $1.07 billion in 2024 and $971 million in 2023.

• On a diluted per common share basis, net income per common share for 2025 increased 18% to $14.07. Net income per common share, on a diluted per common share basis was $11.94 in 2024 and $10.07 in 2023.

• Net operating income was $1.20 billion in 2025, compared with $1.11 billion in 2024 and $1.03 billion in 2023.

• On a diluted per common share basis, net operating income per common share for 2025 increased 17% to $14.52. Net operating income per common share, on a diluted per common share basis, was $12.37 in 2024 and $10.65 in 2023.

Net remeasurement gains of $134.3 million in 2025, $46.3 million in 2024, and $3.2 million in 2023 were attributable to the Company's annual third-quarter review and unlocking of life and health long-term assumptions, including lapses, mortality and morbidity. See the remeasurement gain/loss table in Note 6—Policy Liabilities for additional information.

Overall, the Company continues to see positive signs in its core operations, including sales and premium growth, and continues to achieve an operating ROE (excluding accumulated other comprehensive income) generally in the mid-teens.

Net operating income is primarily comprised of insurance underwriting margin plus excess investment income and annuity and other income, offset by operating expenses, 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 is affected by certain non-operating items. 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.

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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. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company’s business.

Analysis of Profitability by Segment

(Dollar amounts in thousands)

2025 Change

2024 Change

Life insurance underwriting margin

Health insurance underwriting margin

Excess investment income

Segment profit or (loss)

Annuity and other income

Administrative expense

Other corporate expense

Pre-tax total

Applicable taxes

Net operating income

Reconciling items, net of tax:

Realized gains (losses)

Other expenses

Legal proceedings

Net income

The life insurance segment is our primary segment and is the largest contributor to earnings in each year presented. In 2025, the life insurance segment underwriting margin increased $157 million, compared with 2024. This was primarily a result of increased premiums and favorable policy obligations as a percent of premium due to a remeasurement gain resulting from the assumption updates in 2025. In 2024, the life insurance segment underwriting margin increased $160 million when compared with 2023. This was primarily a result of increased premiums and favorable policy obligations as a percent of premium in addition to a remeasurement gain as a result of assumption changes in 2024. Excess investment income decreased $26 million in 2025 compared with 2024, resulting from lower average invested asset growth and lower average earned yields on our short-term, direct commercial mortgage loan and limited partnership investments. In 2025, underwriting margin in the health segment increased to $390 million due to increased sales and rate increases in our Medicare supplement business, compared with $372 million in 2024 and $378 million in 2023.

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GLOBE LIFE INC.

Management's Discussion & Analysis

In 2025, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was the American Income Life Division (American Income). The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the year ended December 31, 2025.

Total premium income rose 5% for the year ended December 31, 2025 to $4.9 billion. Total net sales increased 13% to $948 million when compared with 2024. Total first-year collected premium (defined in the following section) increased 5% to $704 million for 2025, compared to $674 million in 2024.

Life insurance premium income increased 3% to $3.4 billion over the prior-year total of $3.3 billion. Life net sales increased 3% to $615 million for the year ended 2025 as compared to the year ago period. First-year collected life premium increased 2% to $463 million. Life underwriting margin, as a percent of premium, increased to 45% for 2025 from 41% in 2024. Underwriting margin increased to $1.5 billion in 2025, compared to $1.4 billion in 2024.

Health insurance premium income increased 9% to $1.5 billion over the prior-year total of $1.4 billion. Health net sales rose 36% to $333 million for the year ended 2025. First-year collected health premium rose 10% to $241 million. Health underwriting margin, as a percent of premium, was 26% for 2025 down from 27% in 2024. Health underwriting margin increased to $390 million for the year ended 2025, compared to $372 million in 2024.

Excess investment income, the measure of profitability of our investment segment, declined 16% during the year ended 2025 to $138 million from $164 million in 2024. Excess investment income per common share, reflecting the impact of our share repurchase program, declined 8% to $1.68 from $1.83 when compared with the same period in 2024.

Insurance administrative expenses increased 4% primarily due to higher employee costs, which include salaries and other costs in addition to higher information technology expenses in 2025 when compared with the prior-year period. These expenses were 7.3% as a percent of premium for 2025, unchanged from 2024.

For the year ended December 31, 2025, the Company repurchased 5.4 million shares of Globe Life Inc. common stock at a total cost of $685 million for an average share price of $126.41.

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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 15—Business Segments .

We use three 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 12-month period.

• Net sales is calculated as annualized premium issued, net of cancellations in the first 30 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 (typically one month) has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued since annualized premium issued is before cancellations, as cancellations do not contribute to premium income.

• 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. First-year collected premiums are lower than net sales over the prior 12 months because premiums are not collected on lapsed policies after the date of lapse.

Cancellations are not included in lapses.

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

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GLOBE LIFE INC.

Management's Discussion & Analysis

LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2025, life premium represented 69% of total premium and life underwriting margin represented 79% of the total underwriting margin. Additionally, investments supporting the reserves for life products produce the majority of 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)

Amount

Premium

Amount

Premium

Amount

Premium

Premium and policy charges

Policy obligations

Required interest on reserves

Net policy obligations

Amortization of acquisition costs

Commission expense

Premium taxes

Non-deferred acquisition costs

Total expense

Insurance underwriting margin

Net policy obligations amounted to 32% of premiums for the year ended December 31, 2025, compared to 37% in 2024 and 41% in 2023. This improvement was primarily due to improved mortality and the annual assumption changes which were based upon our review of lapses, mortality, and morbidity resulting in a remeasurement gain of $130.9 million in 2025 compared to a remeasurement gain of $56.8 million in 2024 and a remeasurement loss of $2.0 million in 2023. Refer to Note 6—Policy Liabilities for further discussion of the Company's annual assumptions review.

To enhance comparability of underlying operating performance across periods, the Company also evaluates life underwriting margin on a normalized basis that excludes the impacts of annual assumption updates. As discussed above, assumption unlocking results in a cumulative catch-up remeasurement gain or loss recognized in policy obligations. While required under GAAP, these remeasurement effects can introduce volatility unrelated to current-period underwriting performance.

Normalized life underwriting margin is a non-GAAP financial measure defined as insurance underwriting margin excluding the impacts of assumption unlocking recognized in the period. Management believes this measure provides investors and other users of the financial statements with additional insight into the underlying profitability and trends of the in force life business by removing the effects of assumption changes that vary by period. On a normalized basis, life underwriting margin for 2025 was $1.4 billion or 41% of premium, compared with $1.3 billion or 40% of premium in 2024. In 2023, assumption unlocking had minimal impact with underwriting margin remaining unchanged at 38% of premium. This increase in normalized life underwriting margin in the current year reflects improved underlying mortality and persistency experience and favorable expense efficiency across our Divisions.

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GLOBE LIFE INC.

Management's Discussion & Analysis

The table below summarizes life underwriting margin by distribution channel for the last three years.

Life Insurance

Underwriting Margin by Distribution Channel

(Dollar amounts in thousands)

Amount

% of Premium

Amount

% of Premium

Amount

% of Premium

American Income

Direct to Consumer

Liberty National

Other (1)

Total

(1) Includes a gain of $14 million related to the recapture of reinsurance for the year ended December 31, 2025 as disclosed in Note 1—Significant Accounting Policies under the caption Reinsurance and Recapture.

The following table presents Globe Life's life premium distribution channel for the last three years.

Life Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)

Amount

Total

Amount

Total

Amount

Total

American Income

Direct to Consumer

Liberty National

Other

Total

Annualized life premium in force was $3.4 billion at December 31, 2025, an increase of 4% over $3.3 billion a year earlier.

The following table presents life net sales, an indicator of new business production, by distribution channel for each of the last three years.

Life Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)

Amount

Total

Amount

Total

Amount

Total

American Income

Direct to Consumer

Liberty National

Other

Total

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GLOBE LIFE INC.

Management's Discussion & Analysis

The table below discloses first-year collected life premium by distribution channel for the last three years.

Life Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)

Amount

Total

Amount

Total

Amount

Total

American Income

Direct to Consumer

Liberty National

Other

Total

A discussion of life operations by distribution channel follows.

The American Income Life Division is an exclusive agency that markets to members of labor unions and other affinity groups and continues to diversify its lead sources by utilizing internally generated leads, third-party internet vendor leads and referrals to facilitate sustainable growth. This Division is Globe Life's largest contributor of life premium of any distribution channel at 53% of the Company's 2025 total life premium. In 2025, the average monthly life premium issued per policy was $60 as compared to $56 in 2024. Net sales were $394 million in 2025, up from $382 million in 2024. The underwriting margin, as a percent of premium, was 49% in 2025, up from 47% in 2024.

The average producing agent count increased 2% over the year-ago period. The increase in average producing agent count was driven by an increase in new agent recruiting. Sales growth in this Division, as well as within our other exclusive agencies, is generally dependent on growth in the size of the agency force.

Below is the average producing agent count as of the indicated periods for the American Income Division. The average producing agent count is based on the actual count at the beginning and end of each week during the year.

2025 Change

2024 Change

American Income

American Income Life continues to focus on growing and strengthening the agency force, specifically through emphasis on agency middle-management growth. In addition to offering financial incentives and training opportunities, the Division has made considerable investments in information technology, including a customer relationship management ("CRM") tool for the agency force. This tool is designed to provide dashboards and drive productivity in lead distribution, conservation of business, 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. The agents have generated the vast majority of sales through virtual presentations. We find this flexibility to be attractive to new recruits as well as a driver of retention in our agency force.

The Direct to Consumer Division ("DTC") markets adult and juvenile life insurance through a variety of channels, including direct mail, insert media, and digital marketing. The different media channels support and complement one another in the Division's efforts to provide consumer outreach. All three channels work as part of an omnichannel approach. Sales from the internet and inbound phone calls continue to outpace the activity from direct mail. DTC's long-term growth has been fueled by consistent innovation and brand awareness. Additionally, the DTC Division provides valuable support to our agency business through brand impressions and inquiries that lead to sales in our exclusive agency channels. This Division has implemented new technology to enhance the underwriting process which has improved the conversion of customer inquiries into sales. New initiatives are continuously introduced to help increase response rates, issue rates, and create a seamless customer experience. The juvenile insurance market is an important source of sales as well as a vehicle to reach the parents and grandparents of existing juvenile insureds, who are more likely to respond favorably to a direct to consumer solicitation for life insurance

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GLOBE LIFE INC.

Management's Discussion & Analysis

coverage on themselves in comparison to the general adult population. Additionally, future offerings to parents and grandparents for adult and juvenile insurance are sources of lower acquisition-cost life insurance sales in the future.

DTC net sales increased 5% to $112 million in 2025, compared with $106 million for the same period a year ago. This increase is the result of new technology and improvement in conversion of customer inquiries into sales, as noted above, with the expectation that we are not incurring incremental underwriting risk. This Division has been focused on improving profitability and improving underwriting margin. In 2025, DTC’s underwriting margin, as a percent of premium, was 33%, compared with 29% in 2024. In 2025, the average monthly life premium issued for DTC adults was $18 as compared to $15 for the same period in the prior year.

The Liberty National Division is an exclusive agency that markets individual life insurance to middle-income households and worksite customers. Recent investments in new sales technologies as well as growth in agency middle management within the Division are expected to support increased sales. Underwriting margin increased 22% from the year ago period to $171 million and premium increased 5% to $390 million. The underwriting margin as a percent of premium increased to 44% in 2025, compared to 38% in 2024. In 2025, the average monthly life premium issued per policy was $45 as compared to $43 in 2024.

Below is the average producing agent count as of the indicated periods for the Liberty National Division. The average producing agent count is based on the actual count at the beginning and end of each week during the year.

2025 Change

2024 Change

Liberty National

The Liberty National Division's average producing agent count increased when compared with the prior-year comparable periods. This Division continues to execute a long-term plan to grow through expansion from small-town markets in the Southeast to more densely populated areas with larger pools of potential agent recruits and customers. Expansion of this Division’s presence in larger geographic cities with less penetrated areas will help create long-term sustainable agency growth. Additionally, the Division continues to help improve the ability of agents to develop new worksite business. A CRM platform and enhanced analytical capabilities have helped the agents develop additional worksite marketing and improve the productivity of agents selling in the individual life market. As this Division continues to gain momentum in its sales and recruiting initiatives through advances in technology and utilization of a CRM platform, it anticipates continued growth in recruiting activity, average producing agent count, and net sales.

The Other agency distribution channels primarily include non-exclusive independent agencies selling primarily life insurance. The Other distribution channels contributed $201 million of life premium income, or 6% of Globe Life's total life premium income in 2025, and contrib uted 2% of net sales for the year.

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GLOBE LIFE INC.

Management's Discussion & Analysis

HEALTH INSURANCE

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

Health premium accounted for 31% of our total premium in 2025, while the health underwriting margin accounted for 21% of total underwriting margin. Health underwriting margin increased to $390 million compared to $372 million in the prior year. While the Company continues to emphasize life insurance sales relative to health, due to life’s long-term profitability and its greater contribution to excess investment income, the health business provides a significant contribution to return on equity as it does not require a substantial amount of up-front capital.

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

Health Insurance

Summary of Results

(Dollar amounts in thousands)

Amount

Premium

Amount

Premium

Amount

Premium

Premium

Policy obligations

Required interest on reserves

Net policy obligations

Amortization of acquisition costs

Commission expense

Premium taxes

Non-deferred acquisition costs

Total expense

Insurance underwriting margin

Health premium increased 9% in 2025 as compared to 2024. This increase was attributable to significant sales growth in our Medicare supplement plans as a result of what we believe is a consumer shift from Medicare Advantage plans to Medicare supplement plans during the current year. Premium growth in 2025 was also the result of Medicare supplement rate increases that went into effect in 2025 in addition to an increase in agent count and productivity on other health business. Refer to Note 6—Policy Liabilities for further discussion of the Company's annual assumptions review.

Consistent with the life segment, the Company also evaluates health underwriting margin on a normalized basis that excludes the impacts of annual assumptions unlocking recognized in policy obligations. Normalized health underwriting margin is a non-GAAP financial measure and should not be considered a substitute for GAAP underwriting margin. Management believes this measure provides useful supplemental information regarding underlying health underwriting performance by removing period specific assumption update effects.

On a normalized basis, health underwriting margin for 2025 was $387 million or 25% of premium, compared with $383 million or 27% of premium in 2024 and $373 million or 28% of premium in 2023. The percentage of premium decline primarily reflects higher claims experience and an increase in the proportion of overall health premium from United American. As with life, reported GAAP underwriting margin for all periods presented was affected by assumption unlocking as discussed above.

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GLOBE LIFE INC.

Management's Discussion & Analysis

The table below summarizes health underwriting margin by distribution channel for the last three years.

Health Insurance

Underwriting Margin by Distribution Channel

(Dollar amounts in thousands)

Amount

% of Premium

Amount

% of Premium

Amount

% of Premium

United American

Family Heritage

Liberty National

American Income

Direct to Consumer

Total

The following table presents Globe Life's health premium by distribution channel for the last three years.

Health Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)

Amount

Total

Amount

Total

Amount

Total

United American

Family Heritage

Liberty National

American Income

Direct to Consumer

Total

Premium related to limited-benefit supplemental health products comprises $851 million, or 56%, of the total health premiums for 2025, compared with $786 million, or 56%, in 2024. Premium from Medicare Supplement products comprises the remaining $676 million, or 44%, for 2025, compared with $619 million, or 44%, in 2024.

Annualized health premium in force was $1.65 billion at December 31, 2025, an increase of 12% from $1.48 billion a year earlier.

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GLOBE LIFE INC.

Management's Discussion & Analysis

Presented below is a table of health net sales, an indicator of new business production, by distribution channel for each of the last three years.

Health Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)

Amount

Total

Amount

Total

Amount

Total

United American

Family Heritage

Liberty National

American Income

Direct to Consumer

Total

Health net sales related to limited-benefit supplemental health products comprise $207 million, or 62%, of the total health net sales for 2025, compared with $175 million, or 71%, in 2024. Medicare Supplement sales make up the remaining $126 million, or 38%, for 2025, compared with $70 million, or 29%, in 2024.

The following table discloses first-year collected health premium by distribution channel for the last three years.

Health Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)

Amount

Total

Amount

Total

Amount

Total

United American

Family Heritage

Liberty National

American Income

Direct to Consumer

Total

First-year collected premium related to limited-benefit supplemental health plans comprise $160 million, or 66% of total first-year collected premium for 2025, compared with $155 million, or 71%, in 2024. First-year collected premium from Medicare Supplement policies make up the remaining $81 million, or 34%, for 2025, compared with $64 million, or 29%, in 2024.

A discussion of health operations by distribution channel follows.

The United American Division consists of non-exclusive independent agents and brokers who may also sell for other companies. The United American Division was Globe Life's largest health Division in terms of health premium revenue, with net sales up 92% from the prior year.

This Division includes different units:

• UA General Agency, which primarily sells individual Medicare Supplement insurance through independent agents;

• Special Markets, which markets retiree health insurance to employer and union groups through brokers; and

• Globe Life Group Benefits, which offers group worksite supplemental limited benefit health insurance through brokers.

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GLOBE LIFE INC.

Management's Discussion & Analysis

The majority of the premium revenue comes from Medicare Supplement which has seen increased demand primarily due to changes in the Medicare Advantage market. Underwriting margin as a percent of premium for the Division was 6% in 2025 and 8% in 2024. The decline in underwriting margin as a percent of premium when compared to prior years is primarily attributable to increased claims utilization during the current year from Medicare Supplement. We adjust premium rates based upon an annual review of utilization and claim cost trends and submit rates for approval to the insurance department regulators and the new premium rates generally become effective in the following year on new business issued.

The Family Heritage Division is an exclusive agency that primarily markets individual limited-benefit supplemental health insurance to small to medium-sized businesses. Most of its policies include a return of premium feature, where premium paid is returned less any claims paid to the policyholder at the end of a specified period stated within the insurance policy. Underwriting margin as a percent of premium was 37% in 2025 and 34% in 2024.

The Division experienced a 14% rise in health net sales in 2025 as compared with 2024, primarily due to increased agent count and increased agent productivity. The Division will continue to implement incentive and retention programs to further these increases in the number of producing agents.

Below is the average producing agent count as of the indicated periods for the Family Heritage Division. The average producing agent count is based on the actual count at the beginning and end of each week during the year. The average producing agent count increased 9% compared with the same period a year ago. Along with the Division's increased efforts to grow agent count, it is also focused on the further training and development of its agency middle management. While growth in net sales and earned premium is impacted by agent productivity, growth in the number of average producing agents is the primary driver of future growth in sales, similar to other exclusive agencies.

2025 Change

2024 Change

Family Heritage

The Liberty National Division represented 12% of all Globe Life health premium income in 2025. The Liberty National Division markets limited-benefit supplemental health products, consisting primarily of cancer, critical illness and accident insurance. Much of Liberty National’s health business is generated through worksite marketing targeting small businesses. Health premium at the Liberty National Division was $190 million in 2025, flat when compared with 2024. Liberty National's first-year collected premium was unchanged at $28 million when compared with the prior year. Health net sales fell 1% from 2024. Underwriting margin as a percent of premium was 54% in 2025, compared with 56% in 2024, primarily due to an increase in policy obligations in the current year .

While both the American Income Life Division and the Direct to Consumer Division primarily sell life insurance, they also market health products. The American Income Life Division primarily markets accident plans. The Direct to Consumer Division primarily markets Medicare Supplements to employer or union-sponsored groups. On a combined basis, these other channels accounted for 13% of health premium in 2025 and 14% in 2024.

INVESTMENTS

We manage our capital resources, including investments 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 15—Business Segments . It is defined as net investment income less the required interest attributable to policy liabilities.

Management 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.

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GLOBE LIFE INC.

Management's Discussion & Analysis

Excess Investment Income . The following table summarizes Globe Life's net 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)

Net investment income

Interest on policy liabilities (1)

Excess investment income

Excess investment income per diluted common share

Mean invested assets (at amortized cost)

Average insurance policy liabilities

(1) Interest on policy liabilities, at original rates, is a component of total policyholder benefits, a GAAP measure.

Excess investment income declined $26 million, or 16%, in 2025 when compared with 2024. In 2024, excess investment income increased $34 million, or 26%, when compared with 2023. Excess investment income per diluted common share was $1.68 during 2025, a decrease of 8% over the prior-year period ended 2024. Excess investment income per diluted common share was $1.83 during 2024, an increase of 36% over the period ended 2023. Excess investment income per diluted common share generally increases or decreases at a different 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.

Net investment income increased at a compound annual growth rate of 4% over the three years ending 2025. Mean invested assets increased at a compound annual growth rate of 3% during the same period. The effective annual yield rate earned on the fixed maturity portfolio was 5.27% in 2025, compared to 5.26% in 2024. Generally, investment income grows at a slower rate than the assets when the yield on new investments is lower than the yield on dispositions or the average portfolio yield. It also increases at a faster rate than the assets when new investment yields exceed the yield on dispositions or the average portfolio yield. Net investment income declined in the current period due to lower growth in invested assets and lower earned yields on short-term investments, commercial mortgage loans, and limited partnerships compared to the prior year. Invested asset growth was constrained by the impact of reinsurance transactions and higher dividend distributions from the insurance subsidiaries to the Parent, which reduced cash retained at the insurance companies and, accordingly, funds available for new investment acquisitions. In addition to fixed maturities, the Company has also invested in commercial mortgage loans and limited partnerships with debt-like characteristics that diversify risk and enhance risk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the Company's commercial mortgage loans for the year ended December 31, 2025 was 6.41%. The earned yield on limited partnership investments for the year ended December 31, 2025 was 7.56%. See additional information in Note 4—Investments . The following chart presents the growth in net investment income and the growth in mean invested assets.

Growth in net investment income

Growth in mean invested assets (at amortized cost)

Globe Life's net investment income benefits from higher interest rates on new investments. While increasing interest rates has resulted in a net unrealized loss from our available-for-sale debt securities included in accumulated other comprehensive income (loss) as of December 31, 2025, we are not concerned because we do not generally intend to sell, nor is it likely that we will be required to sell, the fixed maturities prior to their anticipated recovery.

Required interest on insurance policy liabilities reduces excess investment income, as it is the amount of net investment income necessary to cover the interest-related growth on insurance policy liabilities. As such, it is reclassified from the insurance segment to the investment segment.

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GLOBE LIFE INC.

Management's Discussion & Analysis

As discussed in Note 15—Business Segments , management regards this as a more meaningful analysis of the investment and insurance segments. Required interest is based on the original discount rate assumptions for our insurance policies in force.

The vast 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 mandates 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 original discount rate to be used to calculate the benefit reserve liability for all insurance policies issued that year. The liability reported on the on the Consolidated Balance Sheets is updated in subsequent periods using current discount rates as of the end of the relevant reporting period with a corresponding adjustment to other comprehensive income.

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 for purposes of recognizing income. As such, the overall original discount rate for the entire in force block of 5.5% 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 on the entire block of in force business. Business issued in the current year has little impact on the overall weighted-average original discount rate due to the size of our in force business.

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

Required Interest on Insurance Policy Liabilities

(Dollar amounts in thousands)

Required

Interest

Average Net

Insurance

Policy

Liabilities (2)

Average

Discount

Rate (1)

Life and Health

Annuity

FHLB Funding Agreement

Deposit Funds

Total

Increase in 2025

Life and Health

Annuity

FHLB Funding Agreement

Deposit Funds

Total

Increase in 2024

Life and Health

Annuity

FHLB Funding Agreement

Deposit Funds

Total

(1) Reflects the average discount rate applicable to the current period, which is used to accrue interest on the insurance policy liabilities for each of the years presented.

(2) Average net insurance policy liabilities are net of accumulated other comprehensive income ("AOCI").

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GLOBE LIFE INC.

Management's Discussion & Analysis

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 these obligations. 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. Gains or losses 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) on 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.

The following table summarizes our tax-effected realized gains (losses) by component for each of the three years ended December 31, 2025.

Analysis of Realized Gains (Losses), Net of Tax

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

Year Ended December 31,

Amount

Per

Share

Amount

Per

Share

Amount

Per

Share

Fixed maturities:

Sales (3)

Matured or other redemptions (1)

Provision for credit losses

Fair value option—change in fair value

Mortgages

Other investments

Total realized gains (losses)—investments

Other gains (losses) (2)

Total realized gains (losses)

(1) During the three years ended December 31, 2025, 2024, and 2023, the Company recorded $288.5 million, $105.6 million, and $50.9 million, respectively, of exchanges of fixed maturity securities (noncash transactions) that resulted in $(2.3) million, $0, and $(1.5) million, respectively, in realized gains (losses), net of tax.

(2) Other realized gains (losses) are primarily a result of changes in the fair value for assets held in connection with non-qualified deferred compensation plans.

(3) During the year ended December 31, 2023, the Company incurred a $52 million after-tax realized loss due to the disposal of holdings in Signature Bank New York and First Republic Bank as a result of the banks entering receivership.

GL 2025 FORM 10-K

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

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-term maturities because they more closely match the long-term nature of our life and health 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.

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,

Cost of acquisitions:

Investment-grade corporate securities

Investment-grade municipal securities

Other securities

Total fixed maturity acquisitions (1)

Effective annual yield (one year compounded) (2)

Average life (in years, to next call)

Average life (in years, to maturity)

Average rating

(1) Fixed maturity acquisitions included unsettled trades of $0 in 2025, $3.2 million in 2024, and $3.8 million in 2023.

(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.

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 2025 and 2024, acquisitions consisted primarily of corporate and municipal bonds with securities spanning a diversified range of issuers, industry sectors, and geographical regions. For the year ended December 31, 2025, we invested primarily in the industrial, financial, and utility sectors. For the entire portfolio, the taxable equivalent effective yield earned was 5.27%, up approximately 1 basis points from the yield in 2024. The increase in taxable equivalent effective yield was primarily due to new purchases at yields exceeding the yield on dispositions and the average portfolio yield.

New cash flow available for investment has been primarily provided through our insurance operations, cash received on existing investments, and proceeds from dispositions. Dispositions of fixed maturities were $937 million in 2025 and $1.42 billion in 2024. Dispositions in 2024 included $462 million related to a coinsurance agreement to cede a majority of annuity business to a third-party insurer that was entered into during 2024.

GL 2025 FORM 10-K

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

In addition to the fixed maturity acquisitions, Globe Life invested in commercial mortgage loans and in other long-term investments. See Note—4 Investments for further discussion.

The following table summarizes Globe Life's other investment acquisitions of the following assets.

Other Investment Acquisitions

(Dollar amounts in thousands)

Year Ended

December 31,

Limited partnerships

Commercial mortgage loans

Common stock

Convertible notes

Company-owned life insurance

Total

Since fixed maturities represent such a significant portion of our investment portfolio, 87% of total amortized cost, net of allowance for credit losses, at December 31, 2025, the remainder of the discussion of portfolio composition will focus on fixed maturities. Selected information concerning the fixed maturity portfolio is as follows:

Fixed Maturity Portfolio Selected Information

At December 31,

Average annual effective yield (1)

Average life, in years, to:

Next call (2)

Maturity (2)

Effective duration to:

Next call (2,3)

Maturity (2,3)

(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 1% change in interest rates.

GL 2025 FORM 10-K

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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, 2025 and 2024.

Fixed Maturities by Sector

December 31, 2025

(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

Banks

Other financial

Total financial

Industrial

Energy

Basic materials

Consumer, non-cyclical

Other industrials

Communications

Transportation

Consumer, cyclical

Technology

Total industrial

Utilities

Total corporates

States, municipalities, and political divisions:

General obligations

Revenues

Total states, municipalities, and political divisions

Other fixed maturities:

Government (U.S. and foreign)

Collateralized debt obligations

Other asset-backed securities

Total fixed maturities

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

Fixed Maturities by Sector

December 31, 2024

(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

Banks

Other financial

Total financial

Industrial

Energy

Basic materials

Consumer, non-cyclical

Other industrials

Communications

Transportation

Consumer, cyclical

Technology

Total industrial

Utilities

Total corporates

States, municipalities, and political divisions:

General obligations

Revenues

Total states, municipalities, and political divisions

Other fixed maturities:

Government (U.S., municipal, and foreign)

Collateralized debt obligations

Other asset-backed securities

Total fixed maturities

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the fixed-maturity portfolio as of December 31, 2025, representing 79% of amortized cost, net, and 81% 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, asset-backed securities, and mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers. At December 31, 2025, the total fixed maturity portfolio consisted of 1,010 issuers.

Fixed maturities had a fair value of $17.6 billion at December 31, 2025, compared to $17.2 billion at December 31, 2024. The net unrealized loss position in the fixed-maturity portfolio decreased from $1.7 billion at December 31, 2024 to $1.2 billion at December 31, 2025 due to a change in market rates during the period.

For more information about our fixed-maturity portfolio by component at December 31, 2025 and December 31, 2024, 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 composite quality rating at December 31, 2025 and December 31, 2024, is shown in the following tables. The company uses the NAIC designation for credit quality ratings. The NAIC designation is generally determined using the second lowest rating available from nationally recognized statistical rating organizations (“NRSRO”) when three or more ratings are available and the lowest rating when two or fewer rating are available. When NRSRO ratings are unavailable the rating may be assigned by the Securities Valuation Office (“SVO”) of the NAIC.

Fixed Maturities by Rating

At December 31, 2025

(Dollar amounts in thousands)

Amortized Cost, net

% of Total

Fair

Value

% of Total

Average Composite Quality Rating on Amortized Cost, net

Investment grade:

AAA

BBB+

BBB

BBB-

Total investment grade

Below investment grade:

Below B

Total below investment grade

Weighted average composite quality rating

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

Fixed Maturities by Rating

At December 31, 2024

(Dollar amounts in thousands)

Amortized

Cost, net

% of Total

Fair

Value

% of Total

Average Composite Quality Rating on Amortized Cost

Investment grade:

AAA

BBB+

BBB

BBB-

Total investment grade

Below investment grade:

Below B

Total below investment grade

Weighted average composite quality rating

The overall quality rating of the portfolio is A-, the same as of year-end 2024. Fixed maturities rated BBB are 42% of the total portfolio at December 31, 2025, down from 46% at December 31, 2024. While this ratio may be high relative to our peers, it is at its lowest level since 2003 and 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, 2025. 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. Our allocation to BBB rated bonds has decreased over the past few years as we have found better risk-adjusted, capital-adjusted value in higher-rated bonds.

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,

Balance at beginning of period

Downgrades by rating agencies

Upgrades by rating agencies

Dispositions

Acquisitions

Provision for credit losses

Amortization and other

Balance at end of period

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

Our investment policy calls for investing primarily in fixed maturities that are investment grade and meet our quality and yield objectives. Thus, the balance of below-investment grade issues is primarily the result of ratings downgrades of existing holdings. Below-investment grade bonds at amortized cost, net of allowance for credit losses, were 3% of total fixed maturities at amortized cost as of December 31, 2025.

OPERATING EXPENSES

Operating expenses 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, 2025.

Operating Expenses Selected Information

(Dollar amounts in thousands)

Amount

Premium

Amount

Premium

Amount

Premium

Insurance administrative expenses:

Salaries

Other employee costs

Information technology costs

Legal costs

Other administrative costs

Total insurance administrative expenses

Parent company expense

Stock compensation expense

Legal proceedings

Other expenses

Total operating expenses, per Consolidated Statements of Operations

Amount

Amount

Amount

Total insurance administrative expenses increase (decrease) over prior year

Total operating expenses increase (decrease) over prior year

Total operating expenses for December 31, 2025 increased in comparison with the prior year primarily due to increases in insurance administrative expenses as well as stock compensation. Insurance administrative expenses increased $13 million primarily due to higher employee costs, which include salaries and other costs. Insurance administrative expenses as a percent of premium were 7.3% for the year ended December 31, 2025 and 2024. Total operating expense for December 31, 2025, increased in comparison with the prior year primarily due to increases in insurance administrative expenses and costs associated with existing stock compensation plans.

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

SHARE REPURCHASES

Globe Life has an ongoing share repurchase program that began in 1986. The share repurchase program is reviewed with the Board of Directors quarterly, and continues indefinitely unless and until the Board of Directors decides to suspend, terminate or modify the program. On November 18, 2024, the Board of Directors authorized the repurchase of up to $1.8 billion under the Company's existing share repurchase program. Management generally determines the amount of repurchases based on the amount of excess cash flows and other available sources after the payment of dividends to the Parent Company shareholders, general market conditions, and other alternative uses. At December 31, 2025, we had slightly more than $1.1 billion remaining under the authorization to repurchase. Since implementing our share repurchase program in 1986, we have used $11.0 billion to repurchase Globe Life Inc. common shares, after determining that the repurchases provide a greater risk-adjusted after-tax return than other alternatives and we expect to continue this program into the future.

Excess cash flow at the Parent Company is primarily comprised of dividends received from the insurance subsidiaries less interest expense paid on its debt 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.

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

Analysis of Share Purchases

(Amounts in thousands)

Purchases with:

Shares

Amount

Shares

Amount

Shares

Amount

Excess cash flow at the Parent Company (1)

Option exercise proceeds

Total

(1) Excludes excise tax on the repurchase of treasury stock of $6 million in 2025, $8 million in 2024, and $4 million in 2023.

During 2024, the amount of share repurchases was higher as we accelerated repurchases given favorable market conditions and the use of additional capital raised during the year. Refer to Note 12—Debt for further details. Throughout the remainder of this discussion, share repurchases will only refer to those made from excess cash flow at the Parent Company and exclude anti-dilutive share repurchases related to stock options exercised.

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, pre-capitalized trust securities facility, a revolving credit facility, commercial paper, and advances from the Federal Home Loan Bank.

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 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. The subsidiary dividends are generally paid in amounts equal to the subsidiaries’ prior year statutory net income excluding net realized capital gains. While the insurance subsidiaries annually generate more operating cash inflows than cash outflows, the companies also have the entire available-for-sale fixed-maturity portfolio available to create additional cash flows if required. GL Re will pay dividends to the parent subject to limitations stipulated by the BMA.

Four of our insurance subsidiaries are members of the FHLB of Dallas. FHLB membership provides the insurance subsidiaries with access to various low-cost collateralized borrowings and funding agreements.

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

While not the only source of liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed. Refer to Note 12—Debt for further details.

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 2026

Liquidity Sources:

Dividends from Subsidiaries

Excess Cash Flows (1)

(1) Excess cash flows are reported gross of shareholder dividends. For the year ended December 31, 2025, 2024, and 2023, shareholder dividends were $86 million, $85 million, and $84 million, respectively.

For more information on the restrictions on the payment of dividends by subsidiaries, see the Restrictions section of Note 13—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.

Dividends from subsidiaries and excess cash flows are projected to be lower in 2026 than in 2025 primarily due to nonrecurring extraordinary dividends received of $192 million in late 2024 and $80 million in 2025 which increased excess cash flows in 2025. Additional sources of liquidity for the Parent Company are cash, intercompany receivables, intercompany borrowings, debt markets, term loans, pre-capitalized trust securities facility discussed below and a revolving credit facility. See Schedule II for more information. The credit facility is discussed below under the caption Sh ort- T erm Borrow ings .

In 2025, we entered into a 30-year facility agreement (“Facility Agreement”) with a Delaware Trust (the “Trust”) formed by us in connection with the sale by the trust of $500 million pre-capitalized trust securities redeemable May 15, 2055 in a Rule 144A private placement. The Trust invested the proceeds from the sale of its securities in a portfolio of principal and interest strips of U.S. Treasury securities (the “Strips”).

The Facility Agreement provides us with the right to sell at any time to the Trust up to $500 million of our 6.580% Senior Notes due 2055 (the “6.580% Senior Notes”) in exchange for a corresponding amount of the Strips held by the Trust (the “Issuance Right”). Our capacity under the agreement is based on the value of the Strips which was $499 million as of December 31, 2025. We agreed to pay a semi-annual facility fee of 1.789% per annum on the unexercised portion of the Issuance Right.

The Company can redeem the 6.580% Senior Notes at any time, in whole or in part, at a price equal to the greater of par or a make-whole redemption price. At December 31, 2025, the Company had no senior note issuances under the Facility Agreement.

Short-Term Borrowings. An additional source of Parent Company liquidity is a credit facility with a group of lenders. The facility was amended on March 29, 2024, resulting in an increased capacity of $250 million. The facility allows for unsecured borrowings and stand-by letters of credit up to $1 billion, which could be increased up to $1.25 billion. While the Parent Company may request the increase, it is not guaranteed. The updated five-year credit agreement will mature on March 29, 2029. Up to $250 million in letters of credit can be issued against the facility. The facility serves as a backup 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. Interest charged on the commercial paper program resembles variable rate debt due to its short term nature. As of December 31, 2025, we had available $579 million of additional borrowing capacity under this facility, compared with $466 million a year earlier. Globe Life has consistently been able to issue commercial paper as needed during the three years ended December 31, 2025. As of December 31, 2025, the Parent Company was in full compliance with all covenants related to the aforementioned debt.

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

As a part of the credit facility, Globe Life has stand-by letters of credit. These letters are issued among our insurance 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 increase in financing costs. On March 29, 2023, the letters of credit were amended to reduce the amount outstanding from $125 million to $115 million. The outstanding letters of credit remained at $115 million at December 31, 2025.

The Parent Company expects to have readily available funds for 2026 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiaries. 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 borrowings. Refer to Note 5—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 $76 million of liquid assets available as of December 31, 2025. This liquidity is available to the Company in the event additional funds are needed to support the targeted capital levels within our insurance subsidiaries.

Consolidated Liquidity. Consolidated net cash inflows provided from operations were $1.40 billion in 2025 and 2024. The Company sold shorter term securities and reinvested in longer term investments, extending duration and taking advantage of higher current interest rates during the year ended December 31, 2025. As noted under the caption Credit Facility in Note 12—Debt , the Parent Company has in place a revolving credit facility and a P-CAPS facility. The insurance companies have no additional outstanding credit facilities.

Cash and short-term investments were $459 million at the end of 2025, compared with $250 million at the end of 2024. In addition to these liquid assets, $17.6 billion (fair value at December 31, 2025) of fixed income securities are available for sale in the event of an unexpected need. Approximately $1.4 billion, at fair value, are pledged for outstanding FHLB advances and reinsurance. Further, approximately 98% of our fixed income securities are publicly traded, freely tradable under SEC Rule 144, or qualified for resale under SEC Rule 144A. While our fixed income securities are classified as available for sale, we have the ability and general intent to hold any securities to recovery or maturity. Our strong cash flows from operations, on-going investment maturities, and available liquidity under our credit facility, FHLB, and P-CAPS facility 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. It does not include short-term FHLB borrowings, which are obligations of the insurance subsidiaries and typically repaid over the course of the year.

Debt: The carrying value of the long-term debt was $2.3 billion at December 31, 2025 and 2024. A complete analysis and description of long-term debt issues outstanding is presented in Note 12—Debt .

Financing costs 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)

Interest on funded debt

Interest on term loan

Interest on short-term debt

Other

Financing costs

In 2025, financing costs increased 11% compared with the prior year. The increase in financing costs is primarily due to higher average balances in the current year compared to the prior year due to the issuance of debt in the third quarter of 2024. More information on our debt transactions is disclosed in the Financial Condition section of this report and in Note 12—Debt .

GL 2025 FORM 10-K

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

Subsidiary Capital : The National Association of Insurance Commissioners 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 ratio is typically determined by dividing adjusted total statutory capital by the amount of RBC 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 its 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. Globe Life targets a consolidated Company Action Level RBC ratio of 300% to 320%. The Company has concluded 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. For 2025, our consolidated Company Action Level RBC ratio was 316%. 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.

Our Bermuda-based insurance subsidiaries are subject to regulation in Bermuda and the BMA has capital requirements and solvency standards including limitations on dividends or distributions to shareholders, The minimum solvency margin that must be maintained by a Class C insurer is the greater of : (i) $0.5 million; or (ii) 1.5 percent of assets; or (iii) 25 percent of its enhanced capital requirement ("ECR") as reported at the end of the relevant year.

A Class C insurer is also required to maintain available statutory economic capital and surplus at a level equal to or in excess of its ECR, which is established by reference to either the Bermuda Solvency Capital Requirement ("BSCR") model or a Bermuda-approved internal capital model. While not specifically referred to in the Insurance Act, the BMA has also established a target capital level ("TCL") equal to 120 percent of an insurer's ECR. The TCL serves as an early warning tool for the BMA and failure to maintain statutory capital at least equal to the TCL will likely result in increased regulatory oversight.

We are in the process of completing Globe Life Re's capital and solvency return in respect of the year ended December 31, 2025, which includes the BSCR. We expect that Globe Life Re’s level of capitalization will exceed the minimum solvency margin and result in its statutory economic capital and surplus being in excess of the TCL.

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 2026

Quarterly dividend by annual year

Shareholders’ equity was $6.0 billion at December 31, 2025. This compares with $5.3 billion at December 31, 2024, an increase of $669 million or 13%. Shareholders' equity increased $819 million, or 18%, during 2024 from $4.5 billion in 2023.

During 2025, shareholders’ equity increased as a result of net income of $1.2 billion, but was offset by share repurchases of $685 million and an additional $190 million in share repurchases to offset the dilution from stock option exercises. Additionally, the balance of AOCI increased $258 million primarily due to increased interest rates and discount rates over the period. During 2024, shareholders' equity increased as a result of net income of $1.1 billion, offset by share repurchases of $946 million and an additional $48 million in share repurchases to offset the dilution from stock option exercises. In addition, the balance of AOCI increased $743 million due to changes in interest rates and discount rates over the 2024 period.

GL 2025 FORM 10-K

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GLOBE LIFE INC.

Management's Discussion & Analysis

We plan to use excess cash available at the Parent Company as efficiently as possible in the future. Excess cash flow, as we define it, results primarily from the dividends received by the Parent Company from its insurance subsidiaries less the interest paid on debt. The cash received by the Parent Company from our insurance subsidiaries is after they have made substantial investments during the year to grow the business. Possible uses of excess cash flow include, but are not limited to, share repurchases, acquisitions, shareholder dividend payments, subsidiary capital contributions, investments 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.

Future policy benefits are computed using current discount rates with the impact of changes in discount rates included in accumulated other comprehensive income. Additionally, the liability for future policy benefits is calculated using net premiums rather than gross premiums. Given that gross premiums are considerably higher than net premiums for our business, as seen in Note 6—Policy Liabilities , the measurement of the liability is higher than what it would be had it been computed using gross premiums. This is an important consideration when analyzing shareholders' equity.

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 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 maturity investments and liabilities and the strong cash flows consistently generated by our insurance subsidiaries, we have the 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.

Financial Strength Ratings. The financial strength of our major insurance subsidiaries is rated by Standard & Poor’s and A. M. Best. The following table presents these ratings for our five largest insurance subsidiaries at December 31, 2025.

Standard

& Poor’s

Best

Liberty National Life Insurance Company

Globe Life And Accident Insurance Company

United American Insurance Company

American Income Life Insurance Company

Family Heritage Life Insurance Company of America

A.M. Best states that it assigns an A (Excellent) rating to insurance companies that have, in its opinion, an excellent ability to meet their ongoing insurance obligations.

The AA financial strength rating category is assigned by Standard & Poor’s Corporation (S&P) to those insurers which have very strong capacity to meet its financial commitments. The plus sign (+) or minus sign (-) shows the relative standing within the major rating category.

GL 2025 FORM 10-K

Table of Contents

GLOBE LIFE INC.

Management's Discussion & Analysis

OTHER ITEMS

Litigation. For more information concerning litigation, please refer to Note 5—Commitments and Contingencies .

CRITICAL ACCOUNTING ESTIMATES

Application of Critical Accounting Estimates. Critical accounting estimates are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations. The preparation of financial statements in conformity with GAAP requires the application of accounting estimates that often involve a significant degree of judgment. Management reviews these key estimates and assumptions used in the preparation of financial statements on a timely basis. If management determines that modifications are necessary due to current facts and circumstances, the Company’s results of operations and financial position as reported in the consolidated financial statements could possibly change significantly. Information on our accounting policies is disclosed in Note 1—Significant Accounting Policies .

Future Policy Benefits. Considerable information concerning the policies, procedures, and other relevant data related to the valuation of our liability for future policy benefits is presented in Note 1—Significant Accounting Policies and Note 6—Policy Liabilities .

The liability for future policy benefits for traditional and limited-payment long duration life and health products comprises the vast majority of the total liability for future policy benefits for the Company. The liability is determined each reporting period based on the net level premium method. This method requires the liability for future policy benefits to be calculated as the present value of estimated future policyholder benefits and the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders.

The Company reviews, and updates as necessary, its cash flow assumptions (mortality, morbidity, and lapses) used to calculate the change in the liability for future policy benefits at least annually. These cash flow assumptions are reviewed at the same time every year, or more frequently, if suggested by experience. If cash flow assumptions are changed, the net premium ratio is recalculated from the original issue date, or the Transition Date, using actual experience and projected future cash flows. As cash flow assumptions are changed, the liability for future policy benefits is adjusted with changes recognized in policyholder benefits on the Consolidated Statements of Operations .

The following table illustrates the sensitivity of our liability for future policy benefits, including the corresponding pre-tax impact on OCI, and net income, as of December 31, 2025, to changes in cash flow assumptions. This information is useful in understanding the potential financial impact on our financial statements from changes in these items and the expected impact to our liability for future policy benefits. We could experience impacts that are more or less significant than noted in the following analysis; however the sensitivities provide insight regarding the direction and magnitude of those potential impacts.

At December 31, 2025

(Dollar amounts in thousands)

Assumptions

Sensitivity

Future policy benefits

OCI (1)

Net Income

Mortality

1% increase

1% decrease

Morbidity

5% increase

5% decrease

Lapses

10% increase

10% decrease

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Management's Discussion & Analysis

(1) Represents the associated impact to OCI from updating the net premium ratio based upon the cash flow assumptions and the remeasurement of the liability for future policy benefits using the current discount rate.

The liability for future policy benefits is discounted using a current upper-medium grade fixed-income instrument yield that reflects the duration characteristics of the liability for future policy benefits. Accordingly, the discount rate assumption is key in determining the change in the value of the liability for future benefits for long duration life and health contracts. Since the liability for future policy benefits for traditional and limited-payment long duration life and health products comprises approximately 93% of the total liability for future policy benefits, it is subject to interest rate risk. A decrease in discount rates will cause an increase in the obligation with a corresponding change in AOCI.

The following table illustrates the interest rate sensitivity of our liability for future policy benefits as of December 31, 2025. This table measures the effect of a parallel shift in discount rates on the liability. The data measures the change in reported value arising from an immediate change in rates in increments of 50 and 100 basis points, which would be recorded as a component of OCI.

Value of Liability for Future Policy Benefits

(Dollar amounts in thousands)

At December 31,

Change in Discount Rates (1)

(1) In basis points.

Deferred Acquisition Costs. Certain costs of acquiring new insurance business are deferred and recorded as an asset. These costs are capitalized on a grouped contract basis and amortized over the expected term of the related contracts, and are essential for the acquisition of new insurance business.

Deferred Acquisition Costs ("DAC") are amortized on a constant-level basis over the expected term of the grouped contracts, with the related expense included in amortization of deferred acquisition costs on the Consolidated Statements of Operations . The in force metric used to compute the DAC amortization rate is annualized premium in force. The assumptions used to amortize acquisition costs include mortality, morbidity, and lapses, and are consistent with those used in calculating the liability for future policy benefits.

Value of business acquired ("VOBA") is amortized on a basis that is consistent with DAC, as described above, and is subject to periodic recoverability and loss recognition testing to determine if there is a premium deficiency. These tests evaluate whether the present value of future contract-related cash flows will support the capitalized VOBA asset. These cash flows consist primarily of premium income, less benefits and expenses. The present value of these cash flows, less the reserve liability, is then compared with the unamortized balance. In the event the estimated present value of net cash flows is less, the deficiency would be recognized by a charge to earnings and either a reduction of unamortized acquisition costs or an increase in the liability for future benefits.

Policy Claims and Other Benefits Payable. This liability consists of known benefits currently payable and an estimate of claims that have been incurred but not yet reported to us. The estimate of unreported claims is based on prior experience and is made after careful evaluation of all information available to us. However, the factors upon which these estimates are based can be subject to change from historical patterns. Factors involved include the litigation environment, regulatory mandates, and the introduction of policy types for which claim patterns are not well established, and medical trend rates and medical cost inflation as they affect our health claims. Changes in these estimates, if any, are reflected in the earnings of the period in which the adjustment is made. The Company concludes that the estimates used to produce the liability for claims and other benefits, including the estimate of

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Management's Discussion & Analysis

unsubmitted claims, are the most appropriate under the circumstances. However, there is no certainty that the resulting stated liability will be our ultimate obligation. At this time, we do not expect any change in this estimate to have a material impact on earnings or financial position consistent with our historical experience. There were no significant changes in the claims process in the current year.

Valuation of Fixed Maturities. We hold a substantial investment in high-quality fixed maturities to provide for the funding of our future policy contractual obligations over long periods of time. While these securities are generally expected to be held to maturity, they are classified as available for sale and are sold from time to time to maximize risk-adjusted, capital-adjusted returns or for other general purposes. We report this portfolio at fair value. Fair value is the price that we would expect to receive upon sale of the asset in an orderly transaction. The fair value of the fixed maturity portfolio is primarily affected by changes in interest rates in financial markets. Because of the size of our fixed maturity portfolio and the long average life, small changes in rates can have a significant effect on the portfolio and the reported financial position of the Company. This impact is disclosed in 100 basis point increments under the caption Market Risk Sensitivity in this report. However, as discussed under the caption Financial Condition in this report, the Company regards these unrealized fluctuations in value as having no meaningful impact on our actual financial condition and, as such, we remove them from consideration when viewing our financial position and financial ratios.

At times, the values of our fixed maturities can also be affected by illiquidity in the financial markets. Illiquidity may contribute to a spread widening, and accordingly to unrealized losses, on many securities that we would expect to be fully recoverable. Even though our fixed maturity portfolio is available for sale, we have the ability and general intent to hold the securities until maturity as a result of our strong and stable cash flows generated from our insurance products. Considerable information concerning the policies, procedures, classification levels, and other relevant data concerning the valuation of our fixed maturity investments is presented in Note 1—Significant Accounting Policies and in Note 4—Investments under the captions Fair Value Measurements in both notes. There were no significant changes in the valuation process in the current year.

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 86% 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 generally 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 following table illustrates the interest rate sensitivity of our fixed maturity portfolio at December 31, 2025. 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)

(1) In basis points.

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GLOBE LIFE INC.

Management's Discussion & Analysis

Investments: Allowance for Credit Losses. We continually monitor our investment portfolio for investments where fair value has declined below carrying value to determine if a credit loss event has occurred. When a credit event does occur, an allowance for credit loss is recorded and the corresponding provision is recognized on the Consolidated Statements of Operations in Realized Gains or Losses. Non-credit related fluctuations in the fair value are recorded in Other Comprehensive Income. The policies and procedures that we use to evaluate and account for allowance for credit losses are disclosed in Note 1—Significant Accounting Policies and the discussions under the captions Investments and Realized Gains and Losses in this report. While every effort is made to make the best estimate of status and value with the information available regarding an allowance for credit loss, it is difficult to predict the future prospects of a distressed or impaired security.

Defined Benefit Pension Plans. We maintain funded defined benefit plans covering most full-time employees. We also have an unfunded nonqualified defined benefit plan covering a limited number of officers. Our obligations under these plans are determined actuarially based on specified actuarial assumptions. In accordance with GAAP, an expense is recorded each year as these pension obligations grow due to the increase in the service period of employees and the interest cost associated with the passage of time. These obligations are offset, at least in part, by the growth in value of the assets in the funded plans. At December 31, 2025, our gross liability under these plans was $677 million, but was offset by assets of $684 million.

The actuarial assumptions used in determining our obligations/expenses for pensions include: employee mortality and turnover, retirement age, the expected return on plan assets, projected salary increases, and the discount rate at which future obligations could be settled. Additionally, a corridor approach is used to amortize any unrecognized gains or losses outside the corridor (the standard 10% of the greater of plan PBO and fair value assets) and have an amortization service period of approximately nine years. These assumptions have an important effect on the pension obligation. A decrease in the discount rate will cause an increase in the pension obligation. A decrease in projected salary increases will cause a decrease in this obligation. Small changes in assumptions may cause significant differences in reported results for these plans. For example, a sensitivity analysis is presented below for the impact of change in the discount rate and the long-term rate of return on assets assumed on our defined benefit pension plans expense for the year 2025 and projected benefit obligation as of December 31, 2025.

Pension Assumptions

(Dollar amounts in thousands)

Assumption

Change (1)

Impact on Expense

Impact on Projected Benefit Obligation

Discount Rate (2) :

Increase

Decrease

Expected Return (3) :

Increase

Decrease

(1) In basis points.

(2) The discount rate for determining the net periodic benefit cost was 5.81% for 2025. The discount rate used for determining the projected benefit obligation as of December 31, 2025 was 5.81%.

(3) The expected long-term return rate assumed was 7.33% at December 31, 2025, and 7.18% in the prior year. Management considers both historical and future yields to determine the expected return.

The Company determines mortality assumptions through the use of published mortality tables that reflect broad-based studies of mortality and published longevity improvement scales.

The criteria used to determine the primary assumptions are discussed in Note 10—Postretirement Benefits . While we have used our best efforts to determine the most reliable assumptions, given the information available from Company experience, economic data, independent consultants, and other sources, we cannot be certain that actual results will be the same as expected. The assumptions are reviewed annually and revised, if necessary, based on more current information available to us. Note 10—Postretirement Benefits also contains information about pension plan assets, investment policies, and other related data. There were no significant changes in the assumptions in the current year.

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