Life insurance reserves are funds that have been set aside to back claims against policies issued. Life insurance reserves are assets of the households and nonprofit organizations, U.S.-chartered depository institutions, and holding companies sectors and liabilities of life insurance companies and the federal government. In the flow of funds accounts, the liability of private life insurance companies for life insurance reserves is equal to the sum of reserves for life insurance policies and reserves for supplementary contracts; the liability does not include reserves for annuities, health insurance, or policy dividend accumulations. The liability of the federal government is equal to the total assets of several U.S. government life insurance funds.
For life insurance companies, the liability is equal to policy reserves behind individual and group annuities, excluding unallocated insurance company contracts held for private pension funds in the name of individuals who are not separately identified.