Note 5. Variable Contracts Containing Guaranteed Benefits

The Company records liabilities for contracts containing a GMDB and GMIB as a component of future policy benefits in the Balance Sheets and changes in the liabilities are included as a component of policy benefits in the Statements of Income.

The components of the changes in the GMDB and GMIB liabilities for the three and six months ended June 30 were as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
GMDB	2016			2015			2016			2015
Guaranteed benefits incurred	$	6,486		$	6,602		$	12,866		$	13,084
Guaranteed benefits paid		(7,184	)		(7,987	)		(13,298	)		(12,785	)
Unlocking		(2,630	)		3,785			4,841			(725	)

Total	$	(3,328	)	$	2,400		$	4,409		$	(426	)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
GMIB	2016			2015			2016			2015
Guaranteed benefits incurred	$	3,529		$	2,781		$	6,765		$	5,662
Guaranteed benefits paid		(1,308	)		(290	)		(1,406	)		(336	)
Unlocking		(1,911	)		276			5,180			(3,316	)

Total	$	310		$	2,767		$	10,539		$	2,010

During the three and six months ended June 30, 2016, the increase in liabilities was driven by lower equity returns, lower interest rates, and lower Separate Account returns as compared to the favorable Separate Account returns in 2015.

The variable annuity GMDB liability at June 30, 2016 and December 31, 2015 was $135,787 and $131,378, respectively. The variable annuity GMIB liability at June 30, 2016 and December 31, 2015 was $105,587 and $95,048, respectively.

The Company has issued variable life contracts in which the Company contractually guarantees to the contract owner a GMDB. In general, contracts containing GMDB provisions provide a death benefit equal to the amount specified in the contract regardless of the level of the contract’s account value.