2024 prescribed U.S. statutory and tax interest rates for the valuation of life insurance and annuity products

This report updates the maximum statutory valuation rate and nonforfeiture interest rate for calendar year 2025 issues of life insurance products and the maximum statutory valuation interest rates for calendar year 2024 issues of annuity products.

VM-22 was adopted with an effective date of January 1, 2018, and prescribes the interest rates to be used when valuing single premium immediate annuities and other similar contracts or supplementary contracts.

Key results

Bond yields increased and then decreased in the second half of 2023 and then remained between 5.25% and 5.75% in the first half of 2024.

Highlights include:

• Under VM-20, statutory valuation interest rates for life insurance products that are categorized as term or universal life still in the secondary guarantee period are different from interest rates for other life insurance products.
• The maximum statutory valuation interest rate for calendar year 2025 issues of whole life insurance products (i.e., life insurance products with guarantee duration of more than 20 years) increased 50 basis points to 3.50%.
• The nonforfeiture interest rate for calendar year 2025 issues of life insurance increased 75 basis points to 4.75% for products with guarantee duration of 20 years or less and increased 75 basis points to 4.50% for products with guarantee duration of more than 20 years.
• The maximum statutory valuation interest rates for calendar year 2024 issues of annuities and guaranteed interest contracts (not subject to VM-22) increased 25 to 75 basis points, to 3.50% to 5.50%, depending on type and guarantee duration.

Contact

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Lori Helge

Director, Insurance Consulting & Technology

email Email phone +1 312 873 5085

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