2025 Prescribed U.S. statutory and tax interest rates for the valuation of life insurance and annuity products

This report updates the maximum statutory valuation rate and nonforfeiture interest rate for calendar year 2026 issues of life insurance products and the maximum statutory valuation interest rates for calendar year 2025 issues of annuity products.

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

VM-22 PBR is expected to take effect January 1, 2026, and be applicable to the products in scope issued on or after that date.

Further information on VM-22 PBR can be found in the WTW article, “Navigating VM-22: Implications for actuarial practice, reserves and pricing”.

Key results

Bond yields decreased to as low as about 5.00% in the second half of 2024 and then, after rising in the last quarter of 2024, remained between 5.50% and 6.00% in the first half of 2025.

Highlights include:

• Under VM-20, statutory valuation interest rates for life insurance products that are categorized as term or universal life still in the secondary guarantee period are different from interest rates for other life insurance products
• The maximum statutory valuation interest rate for calendar year 2026 issues of whole life insurance products (i.e., life insurance products with guarantee duration of more than 20 years) remained the same at 3.50%
• The nonforfeiture interest rate for calendar year 2026 issues of life insurance increased 75 basis points to 5.25% for products with guarantee duration of 10 years or less, remained at 4.75% for products with a guarantee duration between 10 and 20 years, and remained at 4.50% for products with a guarantee duration of more than 20 years
• The maximum statutory valuation interest rates for calendar year 2025 issues of annuities and guaranteed interest contracts (not subject to VM-22) largely remained the same, depending on type and guarantee duration, with a small number of increases of 25 to 50 basis points

Contact

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Lori Helge

Director, Insurance Consulting & Technology

email Email phone +1 312 873 5085

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