Future Policy Benefit Reserves

12 Months Ended

Dec. 31, 2011

Future Policy Benefit Reserves

Note 6—Future Policy Benefit Reserves

A summary of the assumptions used in determining the liability for future policy benefits at December 31, 2011 is as follows:

Individual Life Insurance

Interest assumptions:

Years of Issue	Interest Rates		Percent of Liability
1917-2011		2.5% to 5.75%		11	%
1985-2011		6.0%		29
1986-1992		7.0% graded to 6.0%		7
1954-2000		8.0% graded to 6.0%		11
1951-1985		8.5% graded to 6.0%		4
1984-2011		6.75%		4
2011-2011		5.75% graded to 6.75%		1
2000-2011		7.0%		19
1984-2011		Interest Sensitive		14
				100	%

Mortality assumptions:

For individual life, the mortality tables used are various statutory mortality tables and modifications of:

1950-54	Select and Ultimate Table
1954-58	Industrial Experience Table
1955-60	Ordinary Experience Table
1965-70	Select and Ultimate Table
1955-60	Inter-Company Table
1970	United States Life Table
1975-80	Select and Ultimate Table
X-18	Ultimate Table
2001	Valuation Basic Table

Withdrawal assumptions:

Withdrawal assumptions are based on Torchmark’s experience.

Individual Health Insurance

Interest assumptions:

Years of Issue	Interest Rates		Percent of Liability
1955-2011		2.5% to 5.75%		2	%
1993-2011		6.0%		60
1986-1992		7.0% graded to 6.0%		26
1955-2000		8.0% graded to 6.0%		6
1951-1986		8.5% graded to 6.0%		1
2008-2010		6.75%		1
2001-2007		7.0%		4
				100	%

Morbidity assumptions:

For individual health, the morbidity assumptions are based on either Torchmark’s experience or the assumptions used in calculating statutory reserves.

Termination assumptions:

Termination assumptions are based on Torchmark’s experience.

Overall Interest Assumptions:

The overall average interest assumption for determining the liability for future life and health insurance benefits in 2011 was 5.9%.