The Power of Long‑Term Promises — and the Protections Behind Them
Mar 18, 2026
The Power of Long‑Term Promises — and the Protections Behind Them
Mar 18, 2026
Life insurers do something that no other financial institution can or will do: they make very long-term (often lifelong) financial promises that people can rely on and build their lives around. They give people the tools to create assured lifetime income — and provide for their families in times of need.
Life insurers are built for the long term.
When someone buys a financial protection product like life insurance or an annuity, the industry must be prepared to pay benefits whenever they come due, and for as long as they may last.
These obligations can stretch across decades, so life insurers take a deliberate, long-term approach to investing. Insurers select assets that line up with liabilities, ensuring guarantees can be met whenever needed. The business model, at its core, depends on matching long‑term investments to long‑term promises.
Stringent regulatory safeguards are in place.
Life insurers are highly regulated by a proven and dynamic state-based system that evolves to protect consumers. State regulators require insurers to hold risk‑based capital well above strict thresholds, with detailed disclosures. Insurers must maintain reserves for every policy, ensuring all obligations are fully backed by assets. This isn’t a recommendation. It’s a requirement.
Beyond these standards, regulators regularly stress test insurers’ liquidity and cash flows for extreme and adverse scenarios. Life insurers must be able to access cash quickly in the event of large, unexpected payouts while also ensuring assets remain aligned with long‑term liabilities. These safeguards ensure life insurers are positioned to withstand challenges and keep financial promises through market swings, recessions and even historically rare events.
The track record.
During the COVID pandemic, life insurers maintained more than twice the required capital, even while paying out 100-year record level claims two years in a row, totaling more than $190 billion to the beneficiaries of life insurance policies in 2020 and 2021.
Life insurers can make promises for the long term because they also invest for the long term. $8.4 trillion is invested into the U.S. economy alone, with much of that being in things like roads, bridges, schools and housing. Because life insurers do not face the same short-term liquidity demands as banks, they can make decades-long investments across America.
Life insurers transform long-term capital into long-term security for families, businesses and communities. With more Americans needing and seeking financial guarantees, insurers’ proven capacity to sustain a long‑term business model ensures promises are kept. That steady, disciplined approach is fundamental and remains unchanged.
David Chavern
David Chavern is President and CEO of the American Council of Life Insurers (ACLI) whose mission is to provide financial certainty to Americans regardless of where and how they work, their life stage, or the economic status of their household. ACLI’s 275 member companies represent 94 percent of industry assets and provide financial security products and services to 90 million families.
