Citizens Inc's Business Segments

Citizens, Inc. (“Citizens”) is an insurance holding company incorporated in Colorado serving the life insurance needs of individuals in the United States since 1969 and internationally since 1975. Through our insurance subsidiaries, we pursue a strategy of offering traditional insurance products in niche markets where we believe we are able to achieve competitive advantages. Our core insurance operations include issuing and servicing:

U.S. Dollar-denominated ordinary whole life insurance and endowment policies predominantly sold to foreign residents, located principally in Latin America and the Pacific Rim, through independent marketing consultants;
ordinary whole life insurance policies to middle income households concentrated in the Midwest, Mountain West and southern United States through independent marketing consultants; and
final expense and limited liability property policies to middle and lower income households in Louisiana, Mississippi and Arkansas through employee and independent agents in our home service distribution channel and funeral homes

We were formed in 1969 by our founder, Harold E. Riley. Prior to our formation, Mr. Riley had many years of experience in the international and domestic life insurance business. Historically, our Company has experienced growth through acquisitions in the domestic market and through organic market expansion in the international market. We strive to generate bottom line return using knowledge of our niche markets and our well-established distribution channels.

Citizens, Inc. operates within the life insurance sector, offering a variety of products and services tailored to meet different consumer needs. Below is an extensive description of the segments, products, and services provided by Citizens, Inc.

Life Insurance Segment
Citizens, Inc. primarily engages in life insurance, focusing on ordinary whole life insurance. This includes:

Ordinary Whole Life Insurance
- Policy Structure: These policies provide a fixed amount of insurance coverage for the entirety of the insureds life, as long as premiums are paid. They can also include rider benefits, allowing policyholders to adjust their coverage levels (increase or decrease) over time.
- Annuity Benefits: To enhance cash accumulations, these policies may include annuity benefits.
- Endowment Contracts: This form of insurance serves dual purposes—accumulation of savings and life insurance protection—allowing policyholders to benefit at a certain point specified in the contract or at their death.

Reinsurance
To manage risk, the company retains the first $100,000 of risk for any one life and reinsures the excess. This risk management strategy helps stabilize losses and ensures better financial sustainability.

Subsidiaries
The life insurance segment operates through:
- CICA Life Insurance Company of America (CICA)
- Citizens National Life Insurance Company (CNLIC)

International Sales
Citizens, Inc. has a notable presence in international markets, focusing on U.S. Dollar-denominated whole life insurance and endowment policies. Key features of this segment include:

- Market Focus: Primarily targeting residents in Latin America and the Pacific Rim, the company has been involved in international insurance since 1975.
- Policy Characteristics:
- Larger face amounts result in lower administrative costs per coverage unit.
- Premiums are usually paid annually, enhancing cash flow and reducing policy lapse rates.
- Persistency and mortality rates are comparable to domestic policies.

Risk Management
To mitigate risks associated with international operations:
- All policy approvals are conducted through the Austin, Texas office.
- Independent consultants facilitate the marketing of policies but do not operate offices outside the United States.
- Rigorous underwriting criteria are in place, including medical reviews, background checks, and a claims policy requiring thorough investigations of death claims.

Consultant and Marketing Relations
Independent marketing firms and consultants play a crucial role in reaching potential policyholders. They:
- Have established expertise in insurance marketing.
- Recruit, train, and supervise staff for servicing and placing products while operating as independent contractors.
- Are responsible for compliance with legal requirements in their regions.

Domestic Life Insurance Products
Citizens, Inc. offers a range of products aimed at fulfilling living needs and providing benefits that help policyholders accumulate funds. Key features include:

- Cash Accumulation/Living Benefits: Policies designed to build cash value that can be accessed by the policyholder.
- Tax-Deferred Earnings: Provides tax advantages to policyholders on the growth of their cash value.
- Guaranteed Lifetime Income: Options that ensure a steady income stream in retirement.
- Accidental Death Coverage: Additional options for increased protection.
- Disability Waiver for Premium Payments: Allows policyholders to waive premium payments under certain conditions, such as disability.

The core objective of these products is to support policyholders in addressing their financial security needs while also establishing a safety net for beneficiaries.

Domestic Home Service Insurance
This segment is dedicated to servicing the life insurance needs of middle and lower-income markets, with a strong foothold primarily in Louisiana, Mississippi, and Arkansas. Key metrics include:

- Service Mechanism: Insurances are marketed, sold, and serviced through a home service distribution system. This includes approximately 313 employee agents working on a route basis and partnerships with over 307 funeral homes and independent agents.
- Policy Types: While the primary focus is on life insurance, the segment also provides limited liability, named peril property policies covering homes and personal property.

Conclusion
Citizens, Inc. continues to be a robust player in both the domestic and international life insurance markets, offering comprehensive solutions aimed at risk management, financial security, and consumer needs across different socio-economic segments. The companys structured approach and focus on independent marketing enable it to maintain a competitive edge and cater to a wide array of clients seeking life insurance solutions.