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Insurance
 12 Months Ended
Dec. 31, 2019
Insurance [Abstract]  
Insurance
4. Insurance
Insurance Liabilities
Insurance liabilities, including affiliated insurance liabilities on reinsurance assumed and ceded, are comprised of future policy benefits, policyholder account balances and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:
 
December 31,
 
2019
 
2018
 
(In millions)
Annuities
$
43,731

 
$
37,266

Life
7,507

 
7,336

Run-off
28,064

 
25,447

Corporate & Other
7,701

 
7,597

Total
$
87,003

 
$
77,646


See Note 6 for discussion of affiliated reinsurance liabilities included in the table above.
Assumptions for Future Policyholder Benefits and Policyholder Account Balances
For non-participating term and whole life insurance, assumptions for mortality and persistency are based upon the Company’s experience. Interest rate assumptions for the aggregate future policy benefit liabilities range from 3% to 8%. The liability for single premium immediate annuities is based on the present value of expected future payments using the Company’s experience for mortality assumptions, with interest rate assumptions used in establishing such liabilities ranging from 2% to 8%.
Participating whole life insurance uses an interest assumption based upon non-forfeiture interest rate of 4% and mortality rates guaranteed in calculating the cash surrender values described in such contracts, and also includes a liability for terminal dividends. Participating whole life insurance represented 3% of the Company’s life insurance in-force at both December 31, 2019 and 2018, and 38% of gross traditional life insurance premiums for each of the years ended December 31, 2019, 2018 and 2017.
The liability for future policyholder benefits for long-term disability (included in the Life segment) and long-term care insurance (included in the Run-off segment) includes assumptions based on the Company’s experience for future morbidity, withdrawals and interest. Interest rate assumptions used for long-term disability in establishing such liabilities range from 4% to 7%. Claim reserves for these products include best estimate assumptions for claim terminations, expenses and interest. Interest rate assumptions used for establishing long-term care claim liabilities range from 3% to 6%.
Policyholder account balances liabilities for deferred annuities and universal life insurance have interest credited rates ranging from 1% to 7%.
Guarantees
The Company issues variable annuity contracts with guaranteed minimum benefits. GMABs, the non-life contingent portion of GMWBs and the portion of certain GMIBs that do not require annuitization are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 8.
The assumptions for GMDBs and GMIBs included in future policyholder benefits include projected separate account rates of return, general account investment returns, interest crediting rates, mortality, in-force or persistency, benefit elections and withdrawals, and expenses to administer business. GMIBs also include an assumption for the percentage of the potential annuitizations that may be elected by the contract holder, while GMWBs include assumptions for withdrawals.
The Company also has universal and variable life insurance contracts with secondary guarantees.
See Note 1 for more information on GMDBs and GMIBs accounted for as insurance liabilities.
Information regarding the liabilities for guarantees (excluding policyholder account balances and embedded derivatives) relating to variable annuity contracts and universal and variable life insurance contracts was as follows:
 
Variable Annuity Contracts
 
Universal and Variable
Life Contracts
 
 
 
GMDBs
 
GMIBs
 
Secondary
Guarantees
 
Total
 
(In millions)
Direct
 
 
 
 
 
 
 
Balance at January 1, 2017
$
1,106

 
$
2,206

 
$
3,540

 
$
6,852

Incurred guaranteed benefits
367

 
344

 
692

 
1,403

Paid guaranteed benefits
(57
)
 
—

 
—

 
(57
)
Balance at December 31, 2017
1,416

 
2,550

 
4,232

 
8,198

Incurred guaranteed benefits
183

 
358

 
483

 
1,024

Paid guaranteed benefits
(56
)
 
—

 
—

 
(56
)
Balance at December 31, 2018
1,543

 
2,908

 
4,715

 
9,166

Incurred guaranteed benefits
142

 
168

 
874

 
1,184

Paid guaranteed benefits
(89
)
 
—

 
—

 
(89
)
Balance at December 31, 2019
$
1,596

 
$
3,076

 
$
5,589

 
$
10,261

Net Ceded/(Assumed)
 
 
 
 
 
 
 
Balance at January 1, 2017
$
(45
)
 
$
(19
)
 
$
1,105

 
$
1,041

Incurred guaranteed benefits
94

 
(28
)
 
(159
)
 
(93
)
Paid guaranteed benefits
(55
)
 
—

 
—

 
(55
)
Balance at December 31, 2017
(6
)
 
(47
)
 
946

 
893

Incurred guaranteed benefits
48

 
(3
)
 
18

 
63

Paid guaranteed benefits
(54
)
 
—

 
—

 
(54
)
Balance at December 31, 2018
(12
)
 
(50
)
 
964

 
902

Incurred guaranteed benefits
84

 
(1
)
 
119

 
202

Paid guaranteed benefits
(87
)
 
—

 
—

 
(87
)
Balance at December 31, 2019
$
(15
)
 
$
(51
)
 
$
1,083

 
$
1,017

Net
 
 
 
 
 
 
 
Balance at January 1, 2017
$
1,151

 
$
2,225

 
$
2,435

 
$
5,811

Incurred guaranteed benefits
273

 
372

 
851

 
1,496

Paid guaranteed benefits
(2
)
 
—

 
—

 
(2
)
Balance at December 31, 2017
1,422

 
2,597

 
3,286

 
7,305

Incurred guaranteed benefits
135

 
361

 
465

 
961

Paid guaranteed benefits
(2
)
 
—

 
—

 
(2
)
Balance at December 31, 2018
1,555

 
2,958

 
3,751

 
8,264

Incurred guaranteed benefits
58

 
169

 
755

 
982

Paid guaranteed benefits
(2
)
 
—

 
—

 
(2
)
Balance at December 31, 2019
$
1,611

 
$
3,127

 
$
4,506

 
$
9,244


Information regarding the Company’s guarantee exposure was as follows at:
 
December 31,
 
2019
 
2018
 
In the Event of Death
 
At
Annuitization
 
In the Event of Death
 
At
Annuitization
 
(Dollars in millions)
Annuity Contracts (1), (2)
 
 
 
 
 
 
 
 
 
 
 
Variable Annuity Guarantees
 
 
 
 
 
 
 
 
 
 
 
Total account value (3)
$
100,034

 
 
$
57,069

 
 
$
92,794

 
 
$
53,330

 
Separate account value
$
95,430

 
 
$
56,027

 
 
$
88,065

 
 
$
52,225

 
Net amount at risk
$
6,617

(4)
 
$
4,495

(5)
 
$
10,945

(4)
 
$
3,903

(5)
Average attained age of contract holders
69 years

 
 
69 years

 
 
69 years

 
 
68 years

 
 
December 31,
 
2019
 
2018
 
Secondary Guarantees
 
(Dollars in millions)
Universal Life Contracts
 
 
 
Total account value (3)
$
5,957

 
$
6,099

Net amount at risk (6)
$
71,124

 
$
73,131

Average attained age of policyholders
66 years

 
65 years

 
 
 
 
Variable Life Contracts
 
 
 
Total account value (3)
$
1,133

 
$
954

Net amount at risk (6)
$
12,082

 
$
13,040

Average attained age of policyholders
45 years

 
45 years

_______________
(1)
The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.
(2)
Includes direct business, but excludes offsets from hedging or reinsurance, if any. Therefore, the net amount at risk presented reflects the economic exposures of living and death benefit guarantees associated with variable annuities, but not necessarily their impact on the Company. See Note 6 for a discussion of guaranteed minimum benefits which have been reinsured.
(3)
Includes the contract holder’s investments in the general account and separate account, if applicable.
(4)
Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.
(5)
Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contract holders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contract holders have achieved.
(6)
Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.
Account balances of contracts with guarantees were invested in separate account asset classes as follows at: 
 
December 31,
 
2019
 
2018
 
(In millions)
Fund Groupings:
 
 
 
Balanced
$
62,266

 
$
58,258

Equity
25,580

 
22,292

Bond
7,729

 
7,592

Money Market
16

 
17

Total
$
95,591

 
$
88,159


Obligations Under Funding Agreements
The Company has issued fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. During each of the years ended December 31, 2019, 2018 and 2017, the Company issued no funding agreements and repaid $6 million. At December 31, 2019 and 2018, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $134 million and $136 million, respectively.
Brighthouse Life Insurance Company is a member of the Federal Home Loan Bank (“FHLB”) of Atlanta and holds common stock in certain regional banks in the FHLB system. Holdings of FHLB common stock carried at cost at December 31, 2019 and 2018 were $39 million and $64 million, respectively.
Brighthouse Life Insurance Company has also entered into funding agreements with FHLBs. The liabilities for these funding agreements are included in policyholder account balances. Liabilities for FHLB funding agreements at both December 31, 2019 and 2018 were $595 million.
Funding agreements are issued to FHLBs in exchange for cash. The FHLBs have been granted liens on certain assets, some of which are in their custody, including RMBS, to collateralize the Company’s obligations under the funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of the FHLBs as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by the Company, the FHLBs recovery on the collateral is limited to the amount of the Company’s liabilities to the FHLBs.
In February 2019, Brighthouse Life Insurance Company entered into a funding agreement program with the Federal Agricultural Mortgage Corporation and its affiliate Farmer Mac Mortgage Securities Corporation (“Farmer Mac”), pursuant to which the parties may agree to enter into funding agreements in an aggregate amount of up to $500 million. The funding agreement program has a term ending on December 1, 2023. Funding agreements are issued to Farmer Mac in exchange for cash. In connection with each funding agreement, Farmer Mac will be granted liens on certain assets, including agricultural loans, to collateralize Brighthouse Life Insurance Company’s obligations under the funding agreements. Upon any event of default by Brighthouse Life Insurance Company, Farmer Mac’s recovery on the collateral is limited to the amount of Brighthouse Life Insurance Company’s liabilities to Farmer Mac. At December 31, 2019, there were no borrowings under this funding agreement program.