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When interest rates stay high, most of the news is bad. Mortgages cost more. Credit card balances get pricier. But life insurers quietly get paid more on the money they hold.
That’s the premise of an October 14 piece from Simply Wall St, syndicated on Yahoo Finance, that screened for U.S. life insurers and annuity providers that could gain if rates stay “higher for longer.” It named three: Unum Group, Kansas City Life Insurance, and UTG.
Where rates stand
As of Friday morning, October 16, the 10-year Treasury yield was about 5.07% and the 30-year about 5.42%, CNBC reported. September’s consumer price index rose 3.7% from a year earlier, and wholesale prices jumped 6.3%, the biggest annual gain since 2022. Fed Chairman Kevin Warsh declined on Oct. 15 to signal whether another rate hike is coming. “I don’t prejudge meetings,” he said. Traders were pricing an 87% chance the Fed holds at its next meeting, according to the CME FedWatch Tool as cited by CNBC.
Why life insurers care so much
A life insurer collects premiums today and pays claims years or decades from now. In between, it invests the money, mostly in bonds. At year-end 2025, U.S. life insurers held about $4.0 trillion in bonds out of roughly $6.1 trillion in cash and invested assets, according to the National Association of Insurance Commissioners (NAIC). Common stocks were only about 4% of their portfolios.
So when yields rise and stay up, every maturing bond and every new premium dollar gets reinvested at a better rate. The NAIC’s capital markets team put it plainly in a 2023 analysis: rising rates “support investment income and create more attractive investment and reinvestment opportunities,” which helps insurers’ spread business and makes their products more attractive. “Spread” is the gap between what an insurer earns on its investments and what it has promised to pay on annuities and other guarantees.
That’s the underwriting story hiding inside a rates story. Long-dated promises are easier to price, and to keep, when the assets backing them earn more.
The three names in the screen
Unum Group (NYSE: UNM). Unum is mainly a workplace benefits company: disability, life, dental, vision, and voluntary coverage. Simply Wall St put Unum US revenue at about $8.1 billion, Colonial Life at $2.1 billion, the Closed Block at $1.7 billion and Unum International at about $1.3 billion, with a market cap near $14.6 billion. The bigger story is long-term care. On July 6, Unum announced a deal to cede about $3.8 billion of individual long-term care statutory reserves, covering roughly 50,000 policies, to Fortitude Re. The company said the deal is expected to close during 2026, subject to regulatory approvals, and that its remaining long-term care reserves would be about $11.0 billion.
Kansas City Life Insurance (OTC: KCLI). A traditional life insurer with long-dated policies. Simply Wall St reported about $326 million in revenue from Individual Insurance, $92 million from Old American and $71 million from Group Insurance, a market cap near $349 million, and Q2 2026 net income of $7.77 million after a return to profit.
UTG (OTC: UTGN). A Kentucky-based insurer that writes and services long-duration individual life policies. Simply Wall St put its U.S. life insurance revenue around $67 million and its market cap near $188 million.
Worth noting: Simply Wall St called these three “just a sample set” from a screen that surfaced 13 more names, and each write-up ends by teasing an unnamed “pressure” that readers are pointed to Simply Wall St’s own reports to learn about. Treat the piece as a starting list, not a verdict.
The catch
Higher rates aren’t a free lunch for insurers.
The same NAIC analysis warns that higher rates can produce realized or unrealized losses as the market value of existing bonds falls. Those paper losses stay on paper only as long as the insurer doesn’t have to sell.
That’s where liquidity comes in. Economists at the Bank for International Settlements noted in late 2023 that life insurer stocks didn’t get the relief many expected from rising yields. They pointed to two sources of cash strain: margin calls on interest rate derivatives, and policy surrenders. Policies with low guaranteed rates written in the low-rate years are the most likely to be cashed in when better yields are available elsewhere, and every surrender either drains liquid assets or squeezes profits.
Credit risk is the third piece. Higher rates raise debt costs for the borrowers whose bonds and loans insurers hold. The BIS flagged real estate and private credit as places where losses could show up.
What this means for policyholders
For people who own policies, rather than shares, a higher-rate world can mean better rates on new fixed products. It’s also a reason to look at your insurer’s financial strength, not just the quoted rate. Before swapping an older policy or annuity for a shinier new one, check surrender charges and what guarantees you’d be giving up.
For investors, the rate path matters, but so does each company’s specific baggage, whether that’s a long-term care block, a small market cap, or limited trading on an over-the-counter market. A screen can point you toward names. It can’t do the homework.
Sources and Further Reading
- Simply Wall St via Yahoo Finance, "3 US Life Insurance Stocks That Could Gain From Higher For Longer Rates" (Sasha Jovanovic, Oct. 14, 2026)
- CNBC, "U.S. Treasury yields inch lower as investors digest hot inflation data" (Oct. 16, 2026)
- NAIC Capital Markets Bureau, insurance industry asset mix, year-end 2025 (PDF)
- NAIC Capital Markets Bureau, "The Impact of Rising Rates on U.S. Insurer Investments" (PDF, 2023)
- Bank for International Settlements, "Life insurance companies: the missing relief from rising interest rates" (Dec. 4, 2023)
- Unum Group, "Unum Group Announces $3.8 Billion Long-Term Care Reinsurance Transaction with Fortitude Re" (July 6, 2026)