UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

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

For the fiscal year ended December 31, 2020

or

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

For the transition period from                              to                             

Commission file number: 001-08052

GLOBE LIFE INC.

(Exact name of registrant as specified in its charter)

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

972-569-4000

(Registrant’s telephone number, including area code)

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

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

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

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

Yes  x     No   ¨    

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

Yes ¨       No x   

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

Yes  x       No ¨   

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

Yes  x       No ¨   

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

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨

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

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

Yes  ☐    No  x

As of June 30, 2020, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $7.7 billion based on the closing sale price as reported on the New York Stock Exchange.

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

Class	Outstanding at February 18, 2021
Common Stock, $1.00 par value per share	103,283,402 shares

DOCUMENTS INCORPORATED BY REFERENCE

Document	Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders to be held on April 29, 2021 (Proxy Statement)	Part III

Globe Life Inc.

Table of Contents

			Page
PART I.
	Item 1.	Business	1
	Item 1A.	Risk Factors	8
	Item 1B.	Unresolved Staff Comments	13
	Item 2.	Properties	13
	Item 3.	Legal Proceedings	13
	Item 4.	Mine Safety Disclosures	13
PART II.
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
	Item 6.	Selected Financial Data	15
		Cautionary Statements	16
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	51
	Item 8.	Financial Statements and Supplementary Data	51
		Consolidated Balance Sheets	54
		Consolidated Statements of Operations	55
		Consolidated Statements of Comprehensive Income	56
		Consolidated Statements of Shareholders' Equity	57
		Consolidated Statements of Cash Flows	58
		Notes to Consolidated Financial Statements	59
		Note 1—Significant Accounting Policies	59
		Note 2—Statutory Accounting	71
		Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income	72
		Note 4—Investments	73
		Note 5—Deferred Acquisition Costs	86
		Note 6—Commitments and Contingencies	87
		Note 7—Liability for Unpaid Claims	91
		Note 8—Income Taxes	92
		Note 9—Postretirement Benefits	94
		Note 10—Supplemental Disclosures of Cash Flow Information	100
		Note 11—Debt	101
		Note 12—Shareholders' Equity	103
		Note 13—Stock-Based Compensation	104
		Note 14—Business Segments	109
		Note 15—Selected Quarterly Data	116
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	117
	Item 9A.	Controls and Procedures	117
	Item 9B.	Other Information	120
PART III.
	Item 10.	Directors, Executive Officers, and Corporate Governance	120
	Item 11.	Executive Compensation	120
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	120
	Item 13.	Certain Relationships and Related Transactions and Director Independence	121
	Item 14.	Principal Accountant Fees and Services	121
PART IV.
	Item 15.	Exhibits and Financial Statement Schedules	121

Table of Contents

Part I

Item 1. Business

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

Effective August 8, 2019, Torchmark Corporation changed its corporate name to Globe Life Inc. The New York Stock Exchange (NYSE) ticker was changed to "GL" on August 9, 2019. The name change is part of a brand alignment strategy which will enhance the Company's ability to build name recognition with potential customers and agent recruits through the use of a single brand. The underwriting companies owned by Globe Life Inc. (the Parent Company) will continue to exist as legal entities, but over a period of time will go to market under the Globe Life name to leverage branding initiatives implemented at Globe Life And Accident Insurance Company in recent years.

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

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

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Insurance

Life Insurance

The distribution channels for life insurance products include direct to consumer, exclusive agents, and independent agents. These methods are described in greater detail within the primary marketing distribution channel chart as seen above. The following table presents annualized premium in force for the three years ended December 31, 2020 by distribution method:

	Annualized Premium in Force(1) (Dollar amounts in thousands)
	2020		2019		2018
Direct to Consumer	$	881,012	$	831,739	$	812,780
Exclusive agents:
American Income	1,325,293		1,220,483		1,129,384
Liberty National	318,545		309,792		300,846
Independent agents:
United American	9,314		10,211		11,094
Other	205,785		209,403		210,624
	$	2,739,949	$	2,581,628	$	2,464,728

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

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

	Annualized Premium in Force (Dollar amounts in thousands)
	2020			2019			2018
	Amount		% of Total	Amount		% of Total	Amount		% of Total
Whole life:
Traditional	$	1,857,106	68	$	1,737,794	67	$	1,643,122	67
Interest-sensitive	36,297		1	38,691		2	41,414		2
Term	716,698		26	683,869		26	671,840		27
Other	129,848		5	121,274		5	108,352		4
	$	2,739,949	100	$	2,581,628	100	$	2,464,728	100

	Policy Count and Average Face Amount Per Policy (Dollar amounts in thousands)
	2020			2019			2018
	Policy Count	Average Face Amount per Policy		Policy Count	Average Face Amount per Policy		Policy Count	Average Face Amount per Policy
Whole life:
Traditional	8,717,785	$	14.7	8,477,406	$	14.2	8,112,745	$	13.9
Interest-sensitive	199,975	20.3		208,822	20.3		209,948	20.6
Term	4,526,172	15.1		4,313,709	14.8		4,459,850	14.9
Other	408,859	14.3		399,365	13.7		376,632	12.9
	13,852,791	$	14.9	13,399,302	$	14.5	13,159,175	$	14.3

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Health Insurance

The following table presents Globe Life's health insurance annualized premium in force for the three years ended December 31, 2020 by distribution channel.

	Annualized Premium in Force (Dollar amounts in thousands)
	2020		2019		2018
Direct to Consumer	$	77,522	$	78,229	$	79,325
Exclusive agents:
Liberty National	196,534		197,163		201,294
American Income	104,701		96,447		88,237
Family Heritage	338,309		312,479		290,186
Independent agents:
United American	476,296		454,720		414,656
	$	1,193,362	$	1,139,038	$	1,073,698

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

The following table presents supplemental health annualized premium in force information for the three years ended December 31, 2020 by product category.

	Annualized Premium in Force (Dollar amounts in thousands)
	2020			2019			2018
	Amount		% of Total	Amount		% of Total	Amount		% of Total
Limited-benefit plans	617,759		52	581,056		51	549,283		51
Medicare Supplement	$	575,603	48	$	557,982	49	$	524,415	49
	$	1,193,362	100	$	1,139,038	100	$	1,073,698	100

Annuities

Annuity products include single-premium and flexible-premium deferred annuities. Annuities in each of the three years ended December 31, 2020 comprised less than 1% of premium. The Company does not currently market annuity products.

Pricing

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

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

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Underwriting

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

Reserves

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

Reinsurance

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

Investments

The nature, quality, and percentage mix of insurance company investments are regulated by state laws. The investments of Globe Life insurance subsidiaries consist predominantly of high-quality, investment-grade securities. Approximately 95% of our invested assets, at fair value, are fixed maturities at December 31, 2020 (see Note 4—Investments and Management’s Discussion and Analysis).

Competition

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

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

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

Regulation

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

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

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

Guaranty Assessments—State guaranty laws provide for assessments from insurance companies to be placed into a fund which is used, in the event of failure or insolvency of an insurance company, to fulfill the obligations of that company to its policyholders. The amount which a company is assessed is based on its proportional share of the premium in each state. A significant portion of assessments are recoverable as offsets against state premium taxes.

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

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

Human Capital Management

Globe Life's talent base encompasses a broad range of experience that possesses the depth of critical skills to efficiently and effectively accomplish our business purpose and mission, serve our policyholders, and protect our shareholders' interests. Maintaining superior human capital is a key driver to the success and longevity that our Company has experienced since its origins dating back to the early 1900s. As of December 31, 2020, the Company had 3,261 full time, part-time, and temporary employees. The Company engages over 13 thousand exclusive producing insurance agents, most of whom are classified as independent contractors. In 2020, we increased our employee headcount by 2% and grew our exclusive agency force by 21%.

People, Culture, and Community

At Globe Life, we are united by our mission—To Make Tomorrow Better1 and this starts with our employees and agents. Beyond providing insurance protection for millions of individuals, serving our policyholders and generating financial results for our shareholders, we focus on cultivating a healthy, positive culture and a thriving community within and among our campuses that is inclusive of and attractive for all. Globe Life promotes a diverse work force, where differences are celebrated and inclusiveness is embraced, to better enable our employees to consistently achieve outstanding individual and collective results. Our commitment to diversity starts at the top; of the 9 independent Board members, 56% are women and 22% are ethnic minorities.

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

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As of December 31, 2020, the Globe Life employees, (excluding agents) are as follows:

Ethnicity			Gender			Generations
White	53	%	Female	67	%	Traditionalists (1925-1945)	—	%
Black or African American	21		Male	33		Baby Boomers (1946-1964)	23
Hispanic or Latino	11					Gen X (1965-1977)	31
Asian	9					Millennials (1978-1995)	41
American Indian or Alaskan Native	1					Gen Z (1996-2012)	5
Native Hawaiian or Pacific Islander	—
Other or Not Specified	5
Total	100	%		100	%		100	%

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

We also strive To Make Tomorrow Better by supporting the communities in which we live and work through financial and service-based contributions to organizations that address health-related issues and those that serve youth, families and seniors.

Talent Development

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

Health, Safety, and Wellness

We strive to provide a safe and healthy work environment for every employee. We furnish employees with numerous tools and trainings throughout the year to help ensure they have at their fingertips the best information to safely engage with co-workers, customers, and third parties. In furtherance of our commitment to our employees, we offer a comprehensive employee benefits package that includes competitive monetary benefits, retirement benefits through a Section 401(k) plan and a qualified pension to eligible employees, fitness center reimbursement, paid-time-off (based on years of service), health insurance, dental and vision insurance, employee resource program, health savings and flexible spending accounts, family leave, and tuition assistance.

During the COVID-19 pandemic, the Company remained committed to the well-being and safety of its employees, agents, customers, guests, vendors, and shareholders in our resolve to maintain a stable and secure business environment. In response to the pandemic, our crisis management and incident response teams guided the Company through an expedited, yet smooth, transition towards working remotely. We efficiently transitioned approximately 80-85% of the Company's total workforce, excluding agents, to working remotely. For the agency operations, most sales and recruiting agents transitioned to a virtual experience providing limited in-person exposure.

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Item 1A. Risk Factors

Risks Related to Our Business

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

Business and Operational Risks

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

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

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

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

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

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

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

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

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

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

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

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

•Reduced cash flows from higher surrenders and claim payments or greater than anticipated losses from higher policyholder claims;

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

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

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

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

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

Financial and Strategic Risks

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

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

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

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

Changes in interest rates could negatively affect income.

Declines in interest rates expose insurance companies to the risk that they will fail to earn the level of interest on investments assumed in pricing products and in setting discount rates used to calculate net policy liabilities, which

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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. Other sources of liquidity include a variety of short-term and long-term instruments, including our credit facility, commercial paper, long-term debt, intercompany financing and reinsurance.

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

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

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

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

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

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Industry Risks

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

We establish policy reserves to pay future policyholder benefits. These reserves do not represent an exact calculation of liability, but rather are actuarial estimates based on models and accounting requirements that include many assumptions and projections which are inherently uncertain. The reserve computations involve the exercise of significant judgment with respect to levels of mortality, morbidity and persistency, as well as the timing of premium and benefit payments. Even though our actuaries continually test actual-to-expected results, actual results may differ significantly from the levels assumed, which could result in increased policy obligations and expenses and thus negatively affect our profit margins and income.

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

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

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

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

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

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

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

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

Our business is subject to the risk of the occurrence of catastrophic events.

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

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in our financial results for any fiscal quarter or year and could materially reduce our profitability or harm our financial condition.

Legal, Regulatory, and Compliance Risks

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

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

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

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

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

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

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

The collection, maintenance, use, disclosure and disposal of personally identifiable information by our insurance subsidiaries are regulated at the international, federal and state levels. Applicable laws and rules are subject to change by legislation or administrative or judicial interpretation. Various state laws address the use and disclosure of personally identifiable information to the extent they are more restrictive than those contained in the privacy and security provisions in the federal Gramm-Leach-Bliley Act of 1999 (GLBA), the Health Information Technology for Economic and Clinical Health Act (HITECH), and in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA also requires that we impose privacy and security requirements on our business associates (as that term is defined in the HIPAA regulations). Noncompliance with any privacy laws, whether by us or by one of our business associates, could have a material adverse effect on our business, reputation and results of operations and could result in material fines and penalties, various forms of damages, consent orders regarding our privacy and security practices, adverse actions against our licenses to do business, and injunctive relief.

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Item 1B. Unresolved Staff Comments

As of December 31, 2020, Globe Life had no unresolved SEC staff comments.

Item 2. Properties

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

Item 3. Legal Proceedings

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

Item 4. Mine Safety Disclosures

Not Applicable.

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Part II

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

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

The principal market in which Globe Life's common stock is traded is the New York Stock Exchange (NYSE: GL). There were 2,252 shareholders of record on December 31, 2020, excluding shareholder accounts held in nominee form.

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

*$100 invested on 12/31/2015 in stock or index, including reinvestment of dividends. Fiscal year ended December 31.

Copyright© 2021 Standard & Poor's, a division of S&P Global. All rights reserved.

Purchases of Certain Equity Securities by the Issuer and Others for the Fourth Quarter 2020

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares (or Approximate Dollar Amount) that May Yet Be Purchased Under the Plans or Programs
October 1-31, 2020	553,989	$	81.51	553,989	—
November 1-30, 2020	449,389	91.07		449,389	—
December 1-31, 2020	650,021	94.05		650,021	—

On August 5, 2020, Globe Life's Board reaffirmed its continued authorization of the Company’s stock repurchase program in amounts and with timing that management, in consultation with the Board, determined to be in the best interest of the Company. The program has no defined expiration date or maximum number of shares to be purchased.

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Item 6. Selected Financial Data

The following information should be read in conjunction with Globe Life's Consolidated Financial Statements and related notes reported elsewhere in this Form 10-K:

(Dollar amounts in thousands except per share and percentage data)

	Year ended December 31,
	2020		2019		2018		2017		2016
Life	$	2,672,804	$	2,517,784	$	2,406,555	$	2,306,547	$	2,189,333
Health	1,141,097		1,077,346		1,015,339		976,373		947,663
Other	4		4		12		15		38
Total premium	3,813,905		3,595,134		3,421,906		3,282,935		3,137,034
Net investment income	927,062		910,459		882,512		847,885		806,903
Realized gains (losses)	(4,371)		20,621		(1,804)		23,611		(10,683)
Total revenue	4,737,921		4,527,532		4,303,751		4,155,573		3,934,629
Income from continuing operations, net of tax	731,773		760,882		701,510		1,458,263		539,590
Income from discontinued operations, net of tax	—		(92)		(44)		(3,769)		10,189
Net income	731,773		760,790		701,466		1,454,494		549,779
Basic net income (loss) per common share:
Continuing operations	6.90		6.97		6.22		12.53		4.50
Discontinued operations	—		—		—		(0.03)		0.08
Net income	6.90		6.97		6.22		12.50		4.58
Diluted net income (loss) per common share:
Continuing operations	6.82		6.83		6.09		12.26		4.41
Discontinued operations	—		—		—		(0.04)		0.08
Net income	6.82		6.83		6.09		12.22		4.49
Cash dividends paid	0.74		0.68		0.63		0.59		0.56
Basic weighted average shares outstanding	106,075		109,214		112,873		116,343		120,001
Diluted weighted average shares outstanding	107,225		111,381		115,249		118,983		122,368
	As of December 31,
	2020		2019		2018		2017		2016
Cash and invested assets	$	22,547,498	$	19,923,204	$	17,239,570	$	17,853,047	$	15,955,891
Total assets	29,046,731		25,977,460		23,095,722		23,474,985		21,436,087
Short-term debt	254,918		298,738		307,848		328,067		264,475
Long-term debt	1,667,886		1,348,988		1,357,185		1,132,201		1,133,165
Shareholders' equity	8,771,092		7,294,307		5,415,177		6,231,421		4,566,861
Per diluted common share	83.19		66.02		48.11		52.95		37.76
Effect of fixed maturity revaluation on diluted equity per common share(1)	30.07		17.76		3.79		13.18		5.63
Annualized premium in force:
Life	2,739,949		2,581,628		2,464,728		2,373,099		2,262,736
Health	1,193,362		1,139,038		1,073,698		1,018,020		998,634
Total	3,933,311		3,720,666		3,538,426		3,391,119		3,261,370
Basic shares outstanding	103,797		107,720		110,693		114,593		118,031
Diluted shares outstanding	105,429		110,494		112,561		117,696		120,958

(1)See discussion under the caption Capital Resources in Management’s Discussion and Analysis in this report concerning the effect this rule has on Globe Life's equity.

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CAUTIONARY STATEMENTS

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

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

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

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

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

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

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

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

7.Litigation results;

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

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

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

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

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

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

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

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

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GLOBE LIFE INC.

Management's Discussion & Analysis

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

The following discussion should be read in conjunction with Globe Life's Consolidated Financial Statements and Notes thereto appearing elsewhere in this report.

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

Results of Operations

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

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GLOBE LIFE INC.

Management's Discussion & Analysis

Current Highlights, comparing year to date 2020 with 2019.

•Net income as a return on equity (ROE) for the year ended December 31, 2020 was 9.5% and net operating income as an ROE, excluding net unrealized gains on the fixed maturity portfolio(1) was 13.5%.

•Total premium increased 6% over the same period in the prior year. Life premium increased 6% for the period from $2.5 billion in 2019 to $2.7 billion in 2020. Life underwriting margin declined 4% from $703 million in 2019 to $675 million in 2020.

•Net investment income increased 2% over the same period in the prior year. Excess investment income declined 5% below the prior year.

•Total net sales increased 7% over the same period in the prior year from $621 million to $662 million.

•Book value per share increased 26% over the same period in the prior year from $66.02 to $83.19. Book value per share, excluding net unrealized gains on the fixed maturity portfolio(1), increased 10% over the prior year from $48.26 to $53.12.

•The Company estimates $67 million of incurred life claims as a result of the novel coronavirus (COVID-19) for the year ended December 31, 2020.

•For the year ended December 31, 2020, the Company repurchased 4.5 million shares of Globe Life Inc. common stock at a total cost of $380 million and an average share price of $85.24.

The following graphs represent net income and net operating income from continuing operations for the three years ended December 31, 2020.

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

Net operating income as an ROE, excluding net unrealized gains on the fixed maturity portfolio, is considered a non-GAAP measure. Management utilizes this measure to view the business without the effect of the net unrealized gains, which are primarily attributable to fluctuation in interest rates on the available-for-sale portfolio. The impact of the adjustment to exclude net unrealized gains on fixed maturities is $3.2 billion and $2.0 billion for 2020 and 2019, respectively.

Book value per share, excluding net unrealized gains on the fixed maturity portfolio, is also considered a non-GAAP measure. Management utilizes this measure to view the book value of the business without the effect of net unrealized gains, which are primarily attributable to fluctuation in interest rates on the available for sale portfolio. The impact of the adjustment to exclude net unrealized gains on fixed maturities is $30.07 and $17.76 for 2020 and 2019, 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

COVID-19. With respect to the impact of COVID-19 on our underwriting results for the full year 2020, we estimate $67 million of COVID-19 life claims were incurred. At the midpoint of our 2021 guidance, we are now projecting approximately $52 million of additional life claims will be incurred in 2021, based on an estimate of approximately 270,000 U.S. deaths. This estimate of U.S. deaths is based on various third-party models. The projected additional life claims are dependent on this estimate and many other variables, including, but not limited to, the effect of efforts to reopen the economy, the timing and availability of effective treatments for the disease, and the actual ages and states in which infections and deaths occur.

Summary of Operations. Net income declined 4% to $732 million in 2020, compared with $761 million in 2019. This decrease was primarily related to COVID-19 life claims. On a diluted per common share basis, net income per common share for 2020 decreased slightly from $6.83 to $6.82. Included in net income were after-tax realized losses of $2 million in 2020, compared with realized after-tax gains of $16 million for 2019. Realized gains and losses are presented more fully under the caption Realized Gains and Losses in this report.

Net operating income from continuing operations declined 2% to $738 million in 2020, compared with $752 million in 2019. On a diluted per common share basis, net operating income per common share increased 2% from $6.75 to $6.88. Net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure. Net income is the most directly comparable GAAP measure. We do not consider realized gains and losses to be a component of our core insurance operations or operating segments. Additionally, net income was affected by certain significant and unusual non-operating items in 2019 and 2020. 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.

Globe Life's operations on a segment-by-segment basis are discussed in depth under the appropriate captions following in this report.

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Management's Discussion & Analysis

Analysis of Profitability by Segment

(Dollar amounts in thousands)

	2020		2019		2018		2020 Change		%	2019 Change		%
Life insurance underwriting margin	$	674,946	$	703,464	$	652,301	$	(28,518)	(4)	$	51,163	8
Health insurance underwriting margin	272,369		243,638		236,053		28,731		12	7,585		3
Annuity underwriting margin	9,029		9,458		10,376		(429)		(5)	(918)		(9)
Excess investment income	244,424		257,605		245,094		(13,181)		(5)	12,511		5
Other insurance:
Other income	1,325		1,318		1,236		7		1	82		7
Administrative expense	(250,947)		(240,321)		(223,941)		(10,626)		4	(16,380)		7
Corporate and other	(45,783)		(55,103)		(50,476)		9,320		(17)	(4,627)		9
Pre-tax total	905,363		920,059		870,643		(14,696)		(2)	49,416		6
Applicable taxes	(167,771)		(167,957)		(163,669)		186		—	(4,288)		3
Net operating income	737,592		752,102		706,974		(14,510)		(2)	45,128		6
Reconciling items, net of tax:
Realized gain (loss)—investments	(1,915)		16,291		7,327		(18,206)			8,964
Realized loss—redemption of debt	(501)		—		(8,752)		(501)			8,752
Part D adjustments—discontinued operations	—		(92)		(44)		92			(48)
Administrative settlements	—		(400)		(3,590)		400			3,190
Non-operating expenses	(816)		(508)		(1,247)		(308)			739
Legal proceedings	(2,587)		(6,603)		—		4,016			(6,603)
Tax reform adjustment	—		—		798		—			(798)
Net income	$	731,773	$	760,790	$	701,466	$	(29,017)	(4)	$	59,324	8

The life insurance segment is our primary segment and is the largest contributor to earnings in each year presented. The life insurance segment underwriting margin declined $29 million compared with the prior year, primarily due to higher claims related to COVID-19 offset by premium growth. The health segment contributed to growth in income in both years contributing $29 million of additional underwriting margin in 2020 and $8 million in 2019.

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GLOBE LIFE INC.

Management's Discussion & Analysis

In 2020, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was American Income Life Division. The following tables represent the breakdown of total underwriting margin by operating segment and distribution channel for the year ended December 31, 2020.

Total premium income rose 6% for the year ended December 31, 2020 to $3.8 billion. Total net sales increased 7% to $662 million, when compared with the same period in 2019. Total first-year collected premium was $547 million for the 2020 period, compared with $492 million for the 2019 period.

Life insurance premium income increased 6% to $2.7 billion over the prior year total of $2.5 billion. Life net sales rose 13% to $484 million for the year of 2020. First-year collected life premium rose 13% to $371 million. Life underwriting margins, as a percent of premium, declined to 25% in 2020 from 28% in the prior year. Underwriting margin declined to $675 million for the year ended December 31, 2020, 4% below the same period in 2019. The decline in the life underwriting margin is primarily due to an estimated $67 million of claims related to COVID-19 incurred during 2020.

Health insurance premium income increased 6% to $1.14 billion over the prior year total of $1.08 billion. Health net sales fell 7% to $178 million for the year of 2020. First-year collected health premium rose 8% to $176 million. Health underwriting margins, as a percent of premium, increased to 24% in 2020 compared with 23% in 2019. Health underwriting margin increased to $272 million for the year of 2020, 12% over the same period in 2019.

Excess investment income, the measure of profitability of our investment segment, declined 5% during 2020 to $244 million from $258 million in the same period in 2019. Excess investment income per common share, reflecting the impact of our share repurchase program, declined 1% to $2.28 from $2.31 in the same period last year.

Insurance administrative expenses increased 4.4% in 2020 when compared with the prior year period. These expenses were 6.6% as a percent of premium during 2020, compared with 6.7% a year earlier.

For the year ended December 31, 2020, the Company repurchased 4.5 million Globe Life Inc. shares at a total cost of $380 million for an average share price of $85.24.

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GLOBE LIFE INC.

Management's Discussion & Analysis

A discussion of each of Globe Life's segments follows. A significant factor in the performance of our various segments has been the impact of COVID-19. In response to this crisis, our crisis management and incident response teams successfully guided the Company into a smooth transition of working remotely. We quickly transitioned those employees whose jobs did not require them to be in the office, averaging approximately 80-85% of the Company's total workforce, to working remotely. The Company has continued to operate effectively while taking steps to help ensure the health and safety of our employees through adherence to the CDC and local government work guidelines.

With over 13 thousand exclusive agents in the field, the Company was presented with a challenge to move from face-to-face sales presentations in customers' homes and businesses to a virtual sales process. Despite its challenges, the Company's agencies also had to move from in-person recruiting and training of new agents to virtual processes. The Company's exclusive agency divisions were able to quickly pivot and continue to write new business and hire new agents due in part to new and updated information technology systems put in place over the last several years. Through the year ended December 31, 2020, the Company has seen a 28% increase in agent count at American Income and a 14% increase at Family Heritage compared with the prior year comparable period.

Our Direct to Consumer Division continues to experience record high demand for its products through its internet and inbound phone call channels with a 31% increase in overall net life sales for year ended December 31, 2020 compared with the prior year comparable period. The Company believes that times of crisis highlight the need for basic life protection and this has proven true with this pandemic.

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

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

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

•Net sales is annualized premium issued (gross premium that would be received during the policies' first year in force and assuming that none of the policies lapsed or terminated), net of cancellations in the first thirty days after issue, except in the case of our Direct to Consumer Division. For DTC, net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period has expired. Management considers net sales to be a better indicator of the rate of premium growth as compared with annualized premium issued.

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

While it is difficult to predict sales activity in this uncertain environment, the Company is expecting net life and health sales to increase 7% for the full year 2021. Due to the strength of the Company's policies in force, we expect our total life and health premiums to grow around 6% for the full year 2021. See further discussion of the distribution channels below for Life and Health.

22

GL 2020 FORM 10-K

GLOBE LIFE INC.

Management's Discussion & Analysis

LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2020, life premium represented 70% of total premium and life underwriting margin represented 71% of the total. Additionally, investments supporting the reserves for life products produce the majority of excess investment income attributable to the investment segment.

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

Life Insurance

Summary of Results

(Dollar amounts in thousands)

	2020			2019			2018
	Amount		% of Premium	Amount		% of Premium	Amount		% of Premium
Premium and policy charges	$	2,672,804	100	$	2,517,784	100	$	2,406,555	100
Policy obligations	1,809,373		68	1,638,053		65	1,591,790		66
Required interest on reserves	(698,112)		(26)	(666,168)		(26)	(636,040)		(26)
Net policy obligations	1,111,261		42	971,885		39	955,750		40
Commissions, premium taxes, and non-deferred acquisition expenses	212,859		8	203,052		8	190,007		8
Amortization of acquisition costs	673,738		25	639,383		25	608,497		25
Total expense	1,997,858		75	1,814,320		72	1,754,254		73
Insurance underwriting margin	$	674,946	25	$	703,464	28	$	652,301	27

The lower life insurance underwriting margins for the twelve months ended December 31, 2020 are primarily attributed to approximately $67 million of COVID-19 claims.

23

GL 2020 FORM 10-K

GLOBE LIFE INC.

Management's Discussion & Analysis

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

Life Insurance

Premium by Distribution Channel

(Dollar amounts in thousands)

	2020			2019			2018
	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	1,257,726	47	$	1,160,495	46	$	1,081,333	45
Direct to Consumer	906,959		34	855,543		34	828,935		34
Liberty National	293,897		11	285,551		11	278,878		12
Other	214,222		8	216,195		9	217,409		9
Total	$	2,672,804	100	$	2,517,784	100	$	2,406,555	100

Annualized life premium in force was $2.7 billion at December 31, 2020, an increase of 6% over $2.6 billion a year earlier.

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

Life Insurance

Net Sales by Distribution Channel

(Dollar amounts in thousands)

	2020			2019			2018
	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	253,276	52	$	237,587	55	$	223,924	54
Direct to Consumer	165,426		34	126,208		29	126,133		31
Liberty National	54,931		12	53,718		13	49,173		12
Other	10,371		2	12,301		3	13,293		3
Total	$	484,004	100	$	429,814	100	$	412,523	100

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

Life Insurance

First-Year Collected Premium by Distribution Channel

(Dollar amounts in thousands)

	2020			2019			2018
	Amount		% of Total	Amount		% of Total	Amount		% of Total
American Income	$	214,566	58	$	195,225	59	$	190,680	60
Direct to Consumer	104,262		28	82,615		25	82,432		26
Liberty National	42,435		11	39,840		12	36,463		11
Other	10,190		3	11,564		4	10,342		3
Total	$	371,453	100	$	329,244	100	$	319,917	100

24

GL 2020 FORM 10-K

GLOBE LIFE INC.

Management's Discussion & Analysis

A discussion of life operations by distribution channel follows.

The American Income Life Division markets to members of labor unions and continues to diversify its lead sources by building relationships with other affinity groups, utilizing third-party internet vendor leads and obtaining referrals to facilitate sustainable growth. This division is Globe Life's largest contributor to life premium of any distribution channel at 47% of the Company's 2020 total. Net sales increased 7% to $253 million in 2020 over the 2019 total of $238 million. The underwriting margin, as a percent of premium, was 32% for the twelve months ended December 31, 2020, down from 34% from the prior year primarily due to $18 million of estimated incurred claims related to COVID-19 as well as elevated claims for other causes. Sales growth in our exclusive agencies is generally dependent on growth in the size of the agency force.

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

	2020	2019	2018	2020 Change	%	2019 Change	%
American Income	8,738	7,360	6,971	1,378	19	389	6

American Income continues to focus on growing and strengthening the agency force, specifically through additional agency office openings and focus on middle-management growth. In addition to offering financial incentives and training opportunities, the agency has made considerable investments in information technology, including launching a lead mapping and customer relationship management tool for the agency force. We anticipate this tool will help enhance agent productivity and agent retention. 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 Direct to Consumer Division (DTC) offers adult and juvenile life insurance through a variety of marketing approaches, including direct mailings, insert media, and electronic media. In recent years, production from electronic media, which is comprised of sales through both the internet and inbound phone calls to our call center, has grown rapidly as management has aggressively increased marketing activities related to internet and mobile technology as well as focused on driving traffic to our inbound call center. The different approaches support and complement one another in the division's efforts to reach the consumer. The DTC's long-term growth has been fueled by constant innovation and name recognition. We continually introduce new initiatives in this division in an attempt to increase response rates.

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

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

DTC’s underwriting margin, as a percent of premium, was 14% for the twelve months ended December 31, 2020, which was lower than the 18% result during the same period in 2019 primarily due to $35 million of estimated incurred claims related to COVID-19 as well as elevated claims for other causes. In 2021, we are anticipating additional COVID-19 life claims at the DTC division.

25

GL 2020 FORM 10-K

GLOBE LIFE INC.

Management's Discussion & Analysis

The Liberty National Division