Funeral Directors Life Annual Report 2021

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L O V E E A C H

A N N UA L

R E P O RT

O T H E R

MY COMMAND IS THIS: LOVE EACH OTHER AS I HAVE LOVED YOU. JOHN 15:12

T A B L E

O F

C O N T E N T S

Letter To Our Shareholders

1

Love Each Other

7

Management’s Discussion and Analysis

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Five-Year Summary

27

Balance Sheet

28

Summary of Operations

29

Statement of Shareholder’s Equity

29

Statement of Cash Flow

30

DIG Board of Directors

31

FDLIC Corporate Officers

32

L O V E E A C H

L-E-O

L-E-O

L-E-O L-E-

O

L-E-O

L-E-O

O -E-

O T H E R L-E-O

L-E-O

L-E-O

L-E-

O L-E-

O

O -E-

L-E-

L

-O

L-E

O

-O

L-E

L-E

L

L-E-O

-O

L-E-O

L-E-

O

L-E

-O

L-E-O

L-E-

O

L-E-

O

L-E-O

-O

L-E

L-E-O O -E-

L-E-O

L-E-

O

L-

E-

L-E

-O

L

O -E-

O

L-E-O

L

L-E-O

L-E-O

L

O -E-

O

L-E

L-E

L-E-O L-E-O

-O

KRIS SEALE | PRESIDENT & CHIEF EXECUTIVE OFFICER

As we entered 2021, we were facing the resurgence

Mr. Noble had an interesting revelation that I want to

of COVID-19—with a new variant. We were praying

share with you. He said, “In 1 Corinthians 12, the emphasis

that the United States economy would not be shut

of Paul’s writing to the church is about spiritual gifts,

down again, as occurred in 2020. But how the year

leadership, and the importance of working together.

would play out was a mystery. We continued to plan

In 1 Corinthians 14, he continues this line of reasoning

and work as if the pandemic would subside and

as he talks about leaders sounding a clear call for their

business would return to some sense of normalcy. In

followers. But right in the middle of these two chapters,

addition, we continued our focus on L-E-O (Love

we find 1 Corinthians 13. It is a short section (just 13

Each Other). Our attitude toward moving forward

verses), tucked between these two leadership chapters.

with our business and our emphasis on L-E-O would

It seemed like Paul was writing about leadership, and

prove to be the secret of our success in 2021.

then he paused and thought, ‘Hmm, maybe I should write something Christians can use in their wedding

As I reflected on 2021 and the success we had, I

ceremonies one day!’”

remembered a book that I read several years ago called The Most Excellent Way to Lead by Perry Noble. This book

The author continued by saying, “But the Bible wasn’t

transformed the way I interpreted 1 Corinthians 13 –

originally separated by chapters and verses (those

what many people refer to as “the love chapter.” If you

were added later to help people find certain Scripture

have ever attended a wedding ceremony, you have likely

passages). Once I had that realization, it hit me like a

heard a verse or two quoted from this passage. However,

brick in the face: 1 Corinthians 13 is primarily a chapter

The Most Excellent Way to Lead reasons that there may be

on how to lead, not how to have a great marriage. Paul

another purpose for “the love chapter.”

is continuing his discussion about leadership here, and

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LETTER TO OUR SHAREHOLDERS

when he says he’s going to show the most excellent way,

8

I believe he’s saying, ‘I will show you the most excellent

cease; where there are tongues, they will be stilled; where

way to lead.’”

there is knowledge, it will pass away. For we know in part

Love never fails. But where there are prophecies, they will 9

and we prophesy in part,

10

but when completeness comes,

11

Below, I have included 1 Corinthians 13 for you to read,

what is in part disappears. When I was a child, I talked like

but I’m asking you to read it differently than ever before—

a child, I thought like a child, I reasoned like a child. When I

read it with the mindset of leadership, not marriage.

became a man, I put the ways of childhood behind me. For

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now we see only a reflection as in a mirror; then we shall see 1

If I speak in the tongues of men or of angels, but do not have 2

love, I am only a resounding gong or a clanging cymbal. If

face to face. Now I know in part; then I shall know fully, even as I am fully known.

I have the gift of prophecy and can fathom all mysteries and all knowledge, and if I have a faith that can move mountains, 3

but do not have love, I am nothing. If I give all I possess to

13

And now these three remain: faith, hope and love. But the

greatest of these is love.

the poor and give over my body to hardship that I may boast, Reading this passage with a leadership perspective, did

but do not have love, I gain nothing.

you notice a difference? Paul is telling us that leading 4

Love is patient, love is kind. It does not envy, it does not boast, 5

it is not proud. It does not dishonor others, it is not self-seeking, 6

it is not easily angered, it keeps no record of wrongs. Love does

with love is the “most excellent way.” The theme of the 2021 Annual Report is L-E-O (Love Each Other) because it is the most excellent way to lead…to follow…to have

not delight in evil but rejoices with the truth. It always protects,

relationships with others…to ultimately live life! The way

always trusts, always hopes, always perseveres.

we look at other people is important—and when we see

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FUNERA L DI REC T O RSL I FE.C O M

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them through the lens of love, our capacity to build and

funeral and to provide a way for funeral homes to

grow relationships significantly increases.

build and/or enhance their relationships with their hospice community.

Let’s focus on verse 13 specifically, “And now these three

•

L&D developed and implemented a hybrid WeCare™

remain: faith, hope and love. But the greatest of these is

training approach (virtual, followed by classroom

love.” Here is how faith, hope, and love were illustrated

training) that enables further development of sales

at Funeral Directors Life in 2021 and were responsible for

skills and allows new Select Producers to experience

our success.

our culture “live and in-person.”

•

L&D expanded learning opportunities (1) for the funeral professional through increased continuing

FAITH

education events, (2) for mortuary schools through

Hebrews 11:1 teaches us that faith “is the assurance of

our Passare® initiative, and (3) for our employees

things hoped for, the conviction of things not seen.”

through ongoing versatility training and a wider

Through faith, we accomplished the following last year:

range of DIG U courses.

• •

Our internship program brought in 11 interns from

We implemented Robotic Process Automation or

local universities to give them real-world experience

“bots” to save over 2,000 hours per year in the human

and to help us identify future talent for our company.

processing of New Business.

•

Our Learning and Development Department (L&D) integrated a third module into the Virtual Wolfelt

HOPE

Experience : The WHY of the Final Resting Place.

What is hope? The contemporary idea of hope is “to wish

L&D expanded the Wolfelt Initiative into ancillary

for, to expect, but without certainty of the fulfillment.”

professions by developing the Wolfelt Hospice

In the Bible, according to the Hebrew and Greek words

Program to educate hospice staff on the value of the

translated to the word “hope,” hope is an indication of

TM

•

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In the Bible, according to the Hebrew and Greek words translated to the word “hope,” hope is an indication of certainty. Scripture expresses hope as akin to trust and a strong, confident expectation.

certainty. Scripture expresses hope as akin to trust and

•

The Select Producer program was up 31% over 2020,

a strong, confident expectation. In Romans 8, the Apostle

and 2021 was the best year ever for this segment of

Paul says, “For in hope we have been saved, but hope

our business.

that is seen is not hope; for why does one also hope for

•

Overall, sales volume was up nearly 45% year over

what he sees? But if we hope for what we do not see, with

year! Sales volume grew by more than $116 million

perseverance we wait eagerly for it.”

in 2021.

• With hope for the future, we persevered and accomplished

home locations each month, up 19% over 2020.

•

the following in 2021:

FDLIC averaged a record 1,227 producing funeral DIGicare™ Services reached $1 million in total revenue for the first time…by the end of August! By

•

We continued to assert ourselves as the “thought leader” for our profession – whether it was through

the end of 2021, revenue reached $1.5 million.

•

one of our hundreds of communication campaigns, our new funeral profession REIGNITE

TM

•

•

leadership

On the Go™ Protection plan sales exceeded the total budget for 2021…by October!

•

FDLIC had a record number of sales professionals

summits and webinars, or our new FD Talks™ podcast,

who sold over $1 million in 2021 – to be exact, we had

we have become the guiding light for our profession!

65! (The previous record was 34 in 2016.)

The

Marketing

Partner

(agency-related)

Sales

•

The U.S. Small Business Administration forgave

Channel was up $57 million over 2020, an increase of

FDLIC’s Paycheck Protection Program (PPP) loan,

189%, and is helping to drive sales in both new and

which created additional income for FDLIC in 2021

existing markets.

without any additional federal income taxes.

The first full year of the Precoa relationship brought 16 additional funeral home accounts to FDLIC (including some of the premier names in funeral service in the

• •

Profitability for FDLIC exceeded 2020 by 193%.

FDLIC achieved record new business production in 2021 (as discussed earlier).

U.S.), totaling $45 million in new sales to the company.

FUNERAL DI REC T O RSL I FE.C O M

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LOVE

•

Utilizing various supply chain strategies across our

John 15:15-17 says, “I no longer call you servants, because

equipment vendors, FDLIC was able to meet our

a servant does not know his master’s business. Instead,

business needs without major disruption in our new

I have called you friends, for everything that I learned

hire and equipment replacement programs, all while

from my Father I have made known to you. You did not

saving money against budget.

choose me, but I chose you and appointed you so that you

•

might go and bear fruit—fruit that will last—and so that whatever you ask in my name the Father will give you.

Our clinic hosted six COVID-19 vaccine opportunities for employees and their families.

•

This is my command: Love each other.”

The

company implemented

a new employee

engagement tool called OKRs – Objectives and Key Results – whereby, each employee develops

Jesus demonstrates how He loves us and communicates

quarterly objectives and key results to accompany

clearly that we are to “Love Each Other” – L-E-O! Here

the objectives. To ensure proper implementation of

are a few ways that we showed (and were shown) love

OKRs, the company also implemented a new software

during 2021:

tool – Lattice – to assist with proper accountability.

•

•

• We were once again named a “Great Place to Work”

with Executives to ensure appropriate salary levels

and were honored as one of the “Best Companies to

were set for the changing compensation environment

Work for in Texas,” ranked #7 overall, in the Texas

(due to the fallout from COVID-19 and the shutdown of

Monthly magazine sponsored program.

the U.S. economy) and to create employee-motivating

FDLIC received a 790-data security score in 2021, our

career paths.

highest security score ever, which is a full 20 points

5

The company allowed Vice Presidents to collaborate

•

We had our second annual DIG Deep Week. We

above the insurance industry range of 690-770 and 20

created a week for our Development and Quality

points higher than our nearest competitor.

Assurance teams to focus on passion projects to

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Most people think love should be left out of the workplace and other leadership settings, but as 1 Corinthians 13 shows, love is more important than casting great vision, being extremely intelligent, or even working hard for a cause.

•

facilitate innovation and creativity.

of influence, I challenge you to give love a try – L-E-O! It has

We developed and implemented “foundations

worked for me and for our business, and it will work for you.

training” and dedicated a team to our onboarding

•

process to ensure our new Home Office employees

As I have said before, I am blessed by the team of people

were trained with deep understanding behind why

who work here with me at Funeral Directors Life. Their

we do what we do.

faith, their hope, and their love (especially their love) have

Our Customer Ambassador program continued to

pushed me to become a better leader and have made our

grow because of its success with our sales managers,

company the envy of most! I am blessed to work with,

funeral homes, and marketing partners!

struggle with, and celebrate with my team each day.

CONCLUSION

Finally, we continue to appreciate the confidence you have

Faith, hope, and love with the greatest being love. Make

shown in our company – thank you! All of us at Funeral

no mistake about it: loving others is a big deal, not just in

Directors Life remain committed to you and to our vision

personal relationships, but also any time there is a leader/

– to be the best, most-respected provider of service to the

follower relationship. Most people think love should be left

funeral industry!

out of the workplace and other leadership settings, but as 1 Corinthians 13 shows, love is more important than casting great vision, being extremely intelligent, or even working

Blessings,

hard for a cause. Verse 8 of chapter 13 includes a promise about leading with love – IT WILL NOT FAIL! KRIS SEALE So, if you’re looking for the way to change/improve your

President & Chief Executive Officer

family, your business, your community, and/or your sphere

Funeral Directors Life

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If 2020 was the year of adapting and surviving, 2021

of 2020. As we look back on the year, the secret to our

was the year of loving and thriving.

success was right in front of us within scripture:

Record sales months, new product launches, and

“My command is this: Love each other as I have loved you.”

—­John 15:12

special guest presentations were just a few of the highlights from the year. But after an unexpected 2020, how exactly did we get here? Though we were dealing with a pandemic, political and social turmoil, and other outside factors in 2020, our team at Funeral

Because we loved God and loved others, overflowing

Directors Life hunkered down to strategize how to best

blessings headed our way in 2021! Our Paycheck

serve our funeral homes and families, the industry, our

Protection Program (PPP) loan was forgiven. We had

community, and our people in 2021.

several months that were the highest sales months in Funeral Directors Life’s history. We added a number of

One thing remained certain. We didn’t want to jeopardize

talented employees to the company and more!

our mission to be the “best, most-respected provider of service to our industry.” We knew we needed a reset

We not only accomplished the goals we set for

to refocus on what was most important. That’s when

ourselves, we surpassed them. As a result, we were

“L-E-O” entered the picture.

truly blessed in 2021. We thrived because we loved each other and viewed our work through a completely

Our CEO Kris Seale invited Tom Allen, the head football

new lens. As a result, we saw monumental sales on a

coach of Indiana University, to join us for a special virtual

scale we had never seen before! Clearly, we were onto

presentation. Tom shared the meaning behind “L-E-O,”

something. We’d like to take a look back and show you,

and we all felt renewed inspiration to love people and

our shareholders, everything we accomplished with

our jobs so that we could continue our mission to be

faith, hope, and a whole lot of LOVE!

the “best, most-respected.” We looked forward to the positives in 2021 instead of focusing on the negatives

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L O V E E A C H

O T H E R

FUNERA L DI REC T O RSL I FE.C O M

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In 2021, we made sure we loved our funeral home clients.

Our Customer Ambassador team also loved our funeral

Whether that was through improving our platforms, like

homes by being a single point of contact, providing

DIGicon® upgrades, or saving funeral directors’ time

trainings, and assisting whenever they were needed!

with various services, our mission to be the “best, most-

Additionally, the Help Center supported the sales field with

respected” never wavered.

training and troubleshooting issues with various software systems we provide: DIGicon, Online Access, Pipeline,

The number of our customers grew, and it was important

Arrangement Guide™, and more!

that we didn’t let our growth impact our momentum or cause us to become complacent. We wanted to serve our funeral

We held dozens of VIP Trips this year for funeral home

homes to give them the tools for success and to help them be

owners, managers, and directors. Steven Dantzler and

leaders in their communities.

Clark Dyess ensured everyone arrived and departed safely, and our hosts and maintenance team made sure

For example, our Marketing team developed a toolkit to

our guests had the best time in our Home Office!

simplify the FEMA funeral reimbursement process for families. Funeral homes could download their free toolkit,

Lastly, the DIG Development and Information Security

which consisted of a news release template, letter to families,

teams were paramount in making sure our software was

social media image and video, and other resources, in order

running smoothly for our clients and Home Office. They

to help them simplify the process for their families.

made improvements to technology and processes, fixed bugs, and kept important information safe.

Passare and CLAIMCHECK® helped our funeral homes be more productive in 2021, too! CLAIMCHECK handled

At Funeral Directors Life, we are blessed that so many

thousands of insurance assignments on behalf of funeral

funeral professionals trust us to make their jobs (and lives!)

directors, which freed up their time so they could focus

easier. Here’s to continuing to love our funeral homes for

on their families. Similarily, Passare had a lot of traffic

the years to come!

this past year. A record number of cases were added to the platform, which helped funeral professionals maintain case notes and important details for their families.

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HOW WE LOVED OUR FUNERAL HOMES

SAW A

20% INCREASE

Downloads FEMA Toolkit

2021 IN CASES ADDED TO ITS PLATFORM!

286,452

236,981

2020

904

MARKETING

created a FEMA toolkit to assist funeral homes with telling their families how to apply for funeral reimbursement.

FREE

OUR “Digital Marketing 101” resource was the most popular eBook of 2021!

6,208

Total Assignments

for funeral homes were handled for the year.

694

IN JANUARY ALONE!

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Change doesn’t come quickly in our profession, but

FD Talks featured 20-minute episodes with funeral

that doesn’t mean we should be complacent. Our team

service experts focused on helping funeral professionals

strives to find effective solutions for problems that arise,

gain powerful insights and ideas on how to serve today’s

become thought leaders, or inspire to help all funeral

families. Our most popular episode was about On the

professionals be the best versions of themselves in a

Go ProtectionTM (or travel insurance), but we produced

world that’s constantly adapting.

episodes about preneed, hospice, livestreaming, and more!

The first way we loved our profession was by releasing

Along with sharing insights and new ideas, we promoted

new products and services to help funeral directors save

the idea of thought leadership through our brand-

time and adapt to families’ needs. We developed Encore™,

new funeral service leadership summits, REIGNITE™!

our new livestreaming service, after noticing our funeral

REIGNITE events were all about learning from leaders

homes were either doing nothing to livestream services

outside of our profession. Our guest speakers in 2021 were

or using their cell phones and a spotty connection with

John O’Leary, author and motivational speaker, Tommy

subpar audio and video features. With the help of our

Spaulding, speaker and author, and Scott Drew, head

alpha group, we tested the service until it was ready to

coach of the Baylor Bears, the 2021 NCAA championship

launch!

men’s basketball team. Funeral professionals learned about improving their funeral home culture, reducing

Additionally, we introduced Circle of Friends+®, a digital

stress, and becoming better versions of themselves!

aftercare program. This program was a completely new and fresh concept that utilized an interactive platform to

We also loved our profession by offering the best funeral

provide families with grief resources and steps to settle

service training with the Virtual Wolfelt Experience™

an estate! Funeral homes subscribe to the service, and our

(VWE). At this 3-day workshop, funeral professionals and

team does the rest!

salespeople learn about the WHY and HOW of meaningful funerals. Through the teachings of Dr. Alan Wolfelt,

We launched our new FD Talks podcast released at the

participants learn why properly done funerals are so

beginning of 2021. Available on Apple, Google, and Spotify,

important for the healing process and take away practical

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HOW WE LOVED OUR PROFESSION

tips to use with the families they serve. The VWE served

Overall, we made sure to invest in the profession we love so

more than DOUBLE the number of participants in 2021

much by encouraging funeral professionals to make positive

than it did in 2020!

change in their lives. In 2022, we stay committed to serve!

EVENT ATTENDEES

3,808 20

downloads and streams episodes

118% INCREASE Virtual Wolfelt Experience attendees more than DOUBLED in 2021!

WE INTRODUCED NEW LIVESTREAMING AND AFTERCARE SERVICES.

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Our families are why we do what we do. We have a mission

Protection plans saw tremendous success. When families

to be the “best, most-respected provider of service,” after

preplan their funerals or memorials, they want to make

all! It’s why we work hard to ensure we keep striving for

sure everything is taken care of, even if they were to pass

success and improving the of lives of all we serve.

away unexpectedly while traveling. Over 2,700 families in 2021 alone are now covered with this additional

The gift of preplanning is something our sales team always

protection – all thanks to our Sales and Marketing teams

emphasizes, and thanks to their efforts throughout the

for explaining the benefits!

year, we served more families than ever before!

Knowledge is power, but it also helps to empower families For instance, Customer Care did what they do best: they

to make the right decisions about their final wishes. We

answered questions for families, helped them with their

were proud to write and release a new eBook, “Burial vs.

policies, and even prayed for them. They handled nearly

Cremation: What’s Right for You?”, to help families get

63,000 calls in 2021, an impressive number! Families

the best information possible. With six eBooks available,

are better off due to our team’s heart for service and

our team can assist families in the areas of veteran burial

dedication to building relationships along the way.

benefits, how to pay for a funeral, and more.

Loving families also means providing them with the

Our Sales Ops and Marketing teams were also hard at

information and resources they need to empower

work developing materials to promote events for our

themselves. That’s why we continued to promote our

funeral home clients and their communities. With these

informational website, funeralbasics.org, which has

events, families learned about Medicaid, preplanning,

had over 2.1 million visitors, generating over 3 million

veteran benefits, and more. And our printed materials

page views! There was a need to help families with loved

are shipped with the help of our Fulfillment & Mail Room

ones in hospice care as well, which led to the launch of

team. Teamwork helps these events come together!

hospicebasics.org. Having access to factual information is something all families deserve. They also deserve peace

Our New Business, Document Processing, Claims, SWAT,

of mind when traveling, which is where our On the Go

and Operations teams were also essential to serve families.

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HOW WE LOVED OUR FAMILIES

They reviewed and inputted new contracts, maintained them, and then processed them for families. 2021 was a high production year, and they all worked diligently!

513

EVENTS Lunch & Learns, Seminars, and more

were created and held for funeral homes in 2021!

Loving others is and has always been the foundation of Funeral Directors Life. Our people have a heart for serving families, and we could not do what we do without the help of all of our teams. Thank you all for doing the “best, most-respected” acts each day.

OVER

clicks

3Million Funeral Basics isn’t so basic.

Customer Care HANDLED

62,966 calls in 2021!

NEW informative eBooks

2,751

WERE CREATED FOR FAMILIES!

PLANS WERE SOLD! FUNERA L DI REC T O RSL I FE.C O M

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Matthew 25:40 states, “Truly I tell you, whatever you did

our employees take serving seriously. They freely donate

for one of the least of these brothers and sisters of mine,

their weekends to volunteer, devote their hearts to prayer,

you did for me.”

and generously give money from their own pockets.

Additionally, our Home Office team hosted a canned food

As followers of Christ, even more so as a Christian company,

drive in November to benefit Love & Care Ministries, an

we are called to serve those in need inside and outside

organization that supports the homeless. Overall, our

of our building. Our dedication to loving our community

people donated 11,563 food items for those in need!

has always been a pillar at Funeral Directors Life – we are “helpers of people,” of course! We are committed to helping

We are tremendously grateful for these individuals

when the need is loud – and when it is silent.

and their servant hearts, always seeking to honor our company, our brothers and sisters, and the Lord.

Here are a few more highlights from the year.

2021 MISSION TRIP Being a “helper of people” can be as simple as helping a co-worker with a task, starting a meeting with a

In 2021, 32 volunteers gave one week of their time to build

smile, or preparing food for those who need it. With

homes for two families in Costa Rica. Once built, both homes

hands and hearts to serve, volunteers freely gave time,

were outfitted with additional items, such as children’s

donations, prayers, and themselves to various causes and

clothing, kitchen items, bedroom furniture, a dining room

organizations throughout 2021.

table, towels, bedding, and an abundance of food!

When we give, more is given to us in abundance. That

VOLUNTEER OPPORTUNITIES

can certainly be said of our donation matching program.

Funeral Directors Life matches the charitable donations of

Our

funeral home clients and FDLIC employees, and through

energy, and resources to support various charities

their generous efforts, we donated over $225,000 dollars

or organizations. Groups we support regularly are

to various organizations in 2021! We are fortunate that

the Alzheimer’s Association, Directors Foundation,

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employees

frequently volunteer their time,

HOW WE LOVED OUR COMMUNITY

Abilene Youth Sports Authority (AYSA), Children’s Grief Connection, Pregnancy Resources of Abilene, and more!

In 2021, we hosted an on-site blood drive to support Hendrick Medical Center, benefitting nearly 150 people who desperately needed blood! Additionally, a record $8,100 was raised by our employees through the Giving Tree, a campaign run by the Directors Foundation.

CHAPLAIN AND PRAYER TEAM Our chaplain Ray Thompson is available for counsel, support, and a listening ear. He leads the intercessory prayer group, a team of employees and individuals committed to praying for needs from co-workers, policyholders, funeral home clients, and others facing challenging circumstances.

FUNERA L DI REC T O RSL I FE.C O M

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Without our people, Funeral Directors Life simply

was truly inspiring and the highlight of our year! These

couldn’t function. Every employee has a place here,

events also helped us reinforce our imperative of making

a unique skillset, and a commitment to excellence

Jesus Christ and Christian principles attractive to all.

that is unmatched. Because our people are the foundation of our company, we work hard to ensure

Another way we wanted to show love to our employees

everyone feels respected, taken care of, and special.

was by updating the Employee Handbook. Our dress

We love praising our people at events and celebrating

code switched from everyday business casual to “smart”

one another’s successes and life milestones. Here are

casual. We also started offering paternal leave to give

a few ways we shared the love in 2021!

new fathers time off to bond with their newborns.

Monthly luncheons and the end-of-year party remained

Additionally, we remained steadfast in protecting our

the favorite events among our staff. We recognized those

people from the resurgence of COVID-19 variants in our

whose efforts went above and beyond with “Performance

community. Our Business Continuity Team met weekly

Plus” Awards during luncheons and celebrated our

to assess the ongoing pandemic and monitor how to best

successes in 2021 with the end-of-year party at Potosi

respond to it. We even hosted on-site vaccine clinics for

Live. The party wrapped up our “Get Used to Different”

employees and their families!

events with President and CEO Kris Seale. These December events were a look into the inner workings of

Learning and Development (L&D) continued to improve

our company.

DIG U with new lessons, book studies, and content for our teams! They created or updated 168 DIG U lessons

We even hosted a “Lunch & Learn” and an evening event

and paths, and our employees completed 1,920 DIG U

with Todd Pierce, former bareback rodeo champion and

assignments. L&D’s investment in our employees’ skills

owner of Riding High Ministries. Our evening event,

and knowledge certainly showed how much they cared

“Born Wild,” was held in the Taylor Telecom Arena for

about improving the lives of their co-workers.

our community and livestreamed nationally. Hearing Todd’s story and the “why” behind his work with horses

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Our Mentorship Program, Leadership Development

HOW WE LOVED OUR PEOPLE

Academy (LDA), and Apprenticeship and Intern Programs also saw success in 2021. Four individuals completed the Mentorship Program. Ryan Carlson and Peyton Sanders graduated from LDA. Eleven interns and eight apprentices developed their minds, bodies, and souls in various departments. Our leaders poured into these

$

5,400 GIVEN IN

PERFORMANCE PLUS AWARDS

young men and women, showing them love and support along the way.

We invest in our employees’ minds, bodies, and souls, and the Wellness Center helped our employees improve their overall physical and mental health. Director of Wellness

366

TOTAL NUMBER OF EMPLOYEES at the end of 2021

UP FROM 326 IN 2020

Haley Cooke organized company-wide competitions, all while obtaining two certifications through the American Council on Exercise. The most popular competition was LiveFit with nearly 100 participants! Our on-site Nurse Practitioner Jennifer Flores also worked to host the vaccine clinics, provide testing, and gain new certifications to help employees in the area of mental health.

Along with our various benefits and merit bonuses, 2021 was a year where we were intentional about showing our people how much we care that they’re here at Funeral Directors Life. Thank you all for your hard work. We couldn’t do it without you.

99%

LEARNER SATISFACTION RATE out of

3,660 ratings on DIG U

FUNERAL DI REC T O RSL I FE.C O M

18

St. Francis of Assisi said, “For it is in giving that we receive.” Because we loved our funeral homes, profession, families, community, and people in 2021, we received more than we ever thought possible.

Sales records were shattered left and right. We had the highest sales month EVER in August. A growing number of salespeople were serving families. More funeral homes

TOP PRODUCING STATES

5

by volume

WI

PA

6.7%

TX

9.1%

were subscribing to our services.

We’ll just let the numbers speak for themselves.

23.4%

OH 11.2%

MN 11.5%

SALES GROWTH EXPLODED

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A NNUA L RE POR T 2 0 2 1

2021

T H O U S A N D S

$374,105.4

SALES WERE UP 45% from 2020 to 2021!

I N

2020

$257,477.2

nearly $36.5 million!

2019

$273,591.3

10 RECORD PRENEED MONTHS with August 2021 as the best month:

We converted over $3.7 million dollars of volume from preneed trusts for funeral homes.

HOW LOVING EACH OTHER LED TO MONUMENTAL SALES

total assignment dollars were

68

SELECT PRODUCERS We welcomed 23

DIGICARE SERVICES

$46.1 million! accounted for 16.1% OF TOTAL SALES, or $62.78 MILLION, in revenue.

NEW SALES PEOPLE to the

President’s Club.

We increased our FUNERAL HOME CLIENTS

2,048,

to up from last year!

11%

Director Business Solutions had a 55% INCREASE in revenue ($391,290) and had a 72% INCREASE in new clients!

FUNERAL DIRECTORS LIFE started doing business in three new states: Connecticut, CT Rhode Island, and Wyoming.

RI

WY

EARNED CLOSE TO

$1.6 MILLION IN REVENUE

for Social Media Management , Arrangement Guide™, Circle of Friends+®, and Google Ads. SM

had a 29% INCREASE in demo requests AND WON NFDA’S INNOVATION AWARD!

FUNERAL DI REC T O RSL I FE.C O M

20

CONCLUSION

PROUD TO HAVE AN AM BEST RATING OF A- (EXCELLENT)

A Look into 2022 As we look back at 2021, it’s safe to say the more we loved, the more blessings we received. Our mission, Strategic Objectives, and L-E-O spirit carried us through the early

HONORED TO BE KNOWN AS A GREAT

months of 2021 and helped us finish the year strong and

PLACE TO WORK

encouraged to do more.

In 2022, we will keep up our momentum in sales, our commitment to serve families, and our mission to be the “best, most-respected provider of service.” Through it all, we will never forget to honor God and love each other along the way.

THRILLED TO BE THE #7 “BEST COMPANY TO WORK FOR IN TEXAS”

BY TEXAS MONTHLY MAGAZINE

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MANAGEMENT ’ S DISCUSSION AND ANALYSIS

DECEMBER 31, 2021

TOTAL ASSETS 2000 I N

ANALYSIS OF FINANCIAL POSITION

M I L L I O N S

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For 2021, the financial position of Funeral Directors Life Insurance Company (FDLIC) remained strong as the company maintained an AM Best Insurance Company Rating of A- (Excellent) with a stable outlook. The significant increase in year-over-year new business sales production along with the company’s consistent investment strategy resulted in combined premium and investment income of $413.8 million. While claims began to normalize, reserve increases were approximately 143% higher than the previous year.

General insurance expenses increased by just over 13% as the company continued to invest in infrastructure for future growth. Net income improved dramatically, resulting in a $14.5 million increase in capital and surplus, and the company reported a ratio of capital and surplus to assets of 9.03%.

While not material in relation to total assets or capital and surplus, the company recorded a $2.0 million increase to its asset valuation reserve in the month of December due to the National Association of Insurance Commissioners’ (NAIC) imposed changes to rating designations for mortgage-backed securities. No other material transactions occurred outside the normal scope of business during 2021.

ASSETS The Total Assets of FDLIC grew to $1.7 billion, an increase of $135.5 million or 8.56% from year-end 2020 to year-end 2021. As of December 31, 2021, FDLIC’s assets were distributed as follows: 98.35% in investments, .93% in investment income due and accrued, .32% in receivables due from insurance companies, .25% in deferred tax assets, and .15% in various other assets.

Invested Assets: For 2021, the primary investment held by FDLIC was bonds (government, agency, and corporate), representing 84.78% of invested assets or $1.4 billion. The emphasis regarding the investment portfolio has consistently involved maximizing book yield, limiting risk, achieving appropriate liquidity, and matching the

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cash inflow of invested assets with the projected cash outflow of the company’s insurance liabilities. This is known as an Asset Liability Management (ALM) strategy. Throughout 2021, FDLIC maintained this approach to matching the expected cash flows. This conservative approach to managing assets has been consistent since 1993 and was designed to reduce risk and provide assurance that the cash flow of assets is appropriate to provide for the claims of the company.

The growth in company assets has allowed FDLIC to “average into the market” over many different interest rate environments, and in all areas of the yield curve. In combination with a disciplined approach to investing, this has enabled FDLIC to lower the market value volatility of the portfolio to interest rate fluctuations. During the year, FDLIC increased the diversification of its portfolio by both asset class and number of issues. Therefore, risk related to individual securities and single asset sectors has been reduced. Treasury yields were volatile throughout 2021 but ultimately ended the year higher across all parts of the curve, with the exception of three-month Treasuries and shorter. FDLIC invested throughout the year over various parts of the curve. Despite the volatility and the impact of the global pandemic that resulted in an extremely depressed interest rate environment, FDLIC has continued to follow the long-term investment strategy and focus on diversification in terms of capital and surplus, asset valuation reserve, and the company’s asset liability matching strategy. Specific attention has been placed on investing shorter on the curve to address cash needs from an ALM

FUNERA L DI REC T O RSL I FE.C O M

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AGGREGATE LIFE RESERVES 2000 I N

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perspective and provide a more immunized portfolio. Additionally, the company continues to look for ways to minimize book yield giveup, yet position the invested assets in a manner that is prudent for policyholders while maximizing the risk/return tradeoff.

At year-end 2021, FDLIC’s portfolio contained 960 different bond issues with an overall portfolio average rating of NAIC 1 and 2 and only 81 issues rated below NAIC 2, representing 7.1% of total bonds. However, eleven of these non-investment grade issues were strategically purchased as NAIC 3 rated bonds to fill shorter cash flow years while assisting in keeping the overall book yield high. This non-investment grade program has strict requirements on what can be purchased, and no more than 10% of capital and surplus can be allocated to this strategy. As of December 31, 2021, FDLIC’s allocation of industrial and miscellaneous bonds maintained the greatest allocation at 89.8% of total bonds; special revenue and assessment bonds comprised of U.S. Agency and municipal bonds totaled 9.6%; and U.S. Government bonds was 0.6% of total bonds.

The overall portfolio duration was approximately 8.69 years and an average coupon of 5.13%.

At year-end 2021, there was $1.0 million of preferred stocks in the portfolio. FDLIC may consider investing in additional selective preferred securities going forward but only on a limited basis and consistent with the parameters outlined in the company’s investment plan.

FDLIC’s total common stock portfolio was $15.7 million, representing .93% of invested assets and consisted largely of the company’s two wholly owned insurance subsidiaries, totaling $11.8 million. The company owns Kentucky Funeral Directors Life Insurance Company domiciled in Kentucky as well as Funeral Directors Life Insurance Company of Louisiana domiciled in Louisiana. The public

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common stock portfolio consists solely of the Monteagle Select Value Fund, valued at $3.9 million, a mutual fund that invests only in biblically-responsible entities.

During 2021, FDLIC’s mortgage loan portfolio increased by $5.6 million for new loans of $37.7 million, offset by $32.1 million of loans repaid during the year. The mortgage loan portfolio represented 12.19% of invested assets as opposed to 12.95% in 2020. Virtually all mortgage loans made and retained by FDLIC are made to funeral home customers and have consistently performed. As of year-end, the company had no mortgage loans over 30 days past due.

At year-end 2021, real estate represented 1.31% of invested assets compared to 1.70% in 2020. $15.7 million represents the Home Office property, and $6.5 million represents the Company’s investment property. The $4.1 million year-over-year decrease was due largely to the sale of investment properties, resulting in net capital gains of $2.1 million.

Cash and short-term investments represented .39% of invested assets at $6.6 million compared to $5.4 million at year-end 2020.

Other invested assets consisted of loans to parent that were issued in the first quarter of 2007, which comprised .21% of invested assets and surplus debentures of $2.2 million or .13% of invested assets. Principal reduction on the loans to parent was $486.6 thousand for the year.

The portfolio is conservatively positioned to allow for continued improvements during 2022. FDLIC will maintain its long-term focus and not attempt to “time the market” with regard to interest rates. The focus will remain on providing for the policyholders and limiting both market risk and reinvestment risk. New cash flows during 2022 are expected to be reinvested at levels consistent with 2021. The overall book yield did decrease during 2021, but the portfolio remains diversified and in a positive position to move forward in 2022 and the years to come.

Diversification will continue in order to reduce exposure to single portfolio issues, and FDLIC will diligently invest to provide for the historical investment objectives of the company.

Other assets remained consistent with the previous year with the exception of a $7.5 million decrease in premiums deferred and uncollected. Effective January 1, 2021, FDLIC elected to change its method of calculating life reserves in accordance with and as prescribed by SSAP3 and SSAP51R, resulting in a decrease in premiums deferred and uncollected.

Historically, statutory valuation calculations were done using mean reserve factors with a deferred premium asset and a nondeduction reserve. When the company upgraded its actuarial software, it elected to use a statutory valuation calculation

done on a discounted continuous basis using modal premiums.

Death benefits are calculated monthly and assumed to be paid immediately throughout the month, while premiums are assumed to be paid in accordance with policy premium mode. Therefore, there is no need for a separate calculation of deferred premiums or a non-deduction reserve. The impact of the election was a decrease in total assets of $7.5 million and a decrease in total liabilities of $8.1 million with an offsetting increase to surplus of $637.1 thousand.

LIABILITIES At year-end 2021, FDLIC’s liabilities were distributed as follows: 97.07% in aggregate reserve for life contracts, .98% in asset valuation reserve, .68% in interest maintenance reserve, .35% in accrued commissions, .34% in premiums and annuity consideration received in advance, .11% in policy claims, .07% in borrowed funds, .06% in provision for policyholders’ dividends, and .34% in all other liabilities.

The life insurance and annuity reserves are primarily medium to long term in nature. Life insurance reserves are calculated on a conservative basis, with 95.29% of the reserves being calculated using an interest factor of 4% or less. Annuity reserves are equal to the current cash surrender value of the annuities plus additional reserves required by Actuarial Guideline 33. The terms of the annuity contracts are conservative, offering interest guarantees of 1% to 5% and no bailout provisions.

Provision for policyholders’ dividends stayed the same from year-end 2020. Essentially, a policyholder dividend is the growth rate applied to preneed products and credited to funeral home customers. Annually, the company estimates the dollar amount of dividends to be paid with respect to participating polices in the following calendar year.

The interest maintenance reserve decreased slightly from year-end 2020 for net realized capital gains of $300.0 thousand less amortization of $411.7 thousand. The asset valuation reserve (AVR) increased $2.9 million or 23.33% in 2021 compared to a $608.4 thousand from 2019 to 2020. The year-over-year increase came largely in the month of December due to the NAIC’s changes to the designations for mortgagebacked securities. The NAIC moved from a financial modeling price breakpoints process to a single NAIC designation, and NAIC designation category for mortgage-backed securities closed after December 31, 2012. Though there were no changes to the underlying characteristics of these type securities held by FDLIC, the impact was a $2.0 million increase to AVR with the offsetting decrease to capital and surplus.

Borrowed money for 2021 includes a $1.0 million grant from the Development Corporation of Abilene, Inc. The investment incentive payment was based upon the company’s expansion of its corporate headquarters and its commitment to create 70 additional positions over a 5-year period. The terms of the grant require the funds to be recorded as a liability for the first four years until the employment terms have been satisfied, at which time the loan will be granted and converted to income. In April of 2020, FDLIC received a $2.6 million loan from the Paycheck Protection Program (PPP) provided through the Small Business Administration (SBA) and established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act. The loan was used to support our commitment of no layoffs and no reductions in pay during 2020. In June of 2021, the PPP loan and any accrued interest was forgiven and recorded as a net capital gain in the summary of operations.

Generally, the differences between years in the other liability categories did not result from any significant changes in liability trends but were the result of normal business.

CAPITAL AND SURPLUS Total capital and surplus increased $14.5 million for 2021 as compared to the increase of $6.5 million in 2020. The increase in 2021 consisted of net income of $14.9 million, $1.6 million increase in net deferred income tax, unrealized gains of $1.2 million, and a $637.1 thousand increase for change in reserve valuation basis, offset by a $2.9 million increase in asset valuation reserve and a $988.2 thousand increase in non-admitted assets.

The majority of non-admitted assets relate to deferred income taxes and negative agent reserve balances and prepaid expenses partially offset by depreciation on non-admitted capital assets.

The ratio of capital and surplus to total assets was 9.03% at year-end 2021 compared to 8.89% at year-end 2020, despite the unexpected increase in asset valuation reserve. No other material favorable or unfavorable trends existed in FDLIC’s Capital and Surplus accounts.

RESULTS OF OPERATIONS REVENUE New business issued for 2021 exceeded $374.0 million, surpassing 2020 by $117.0 million. New business sales were 107.8% of projected and 45.3% higher than 2020.

FUNERAL DI REC T O RSL I FE.C O M

24

CAPITAL AND SURPLUS

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Annuity premium income increased 36.23% from 2020 to 2021 while ordinary life, group life, and industrial life premiums increased 38.44% for a total increase between years of $92.1 million or 37.36% compared to a 4.16% decrease from 2019 to 2020. Single pay new business sales production for 2021 was 72.8% of total production, an increase from 71.9% in 2020. The year-over-year increase is due partly to the fact that production in the first half of 2020 was significantly impacted by COVID-19.

The company’s five largest states – Texas, Minnesota, Ohio, Pennsylvania and Wisconsin – contributed $241.0 million in new business sales. A large part of the growth in 2021 was also attributed to the growth in third-party marketing partners.

In 2021, approximately $3.3 million in premium income came from trust conversions compared to $7.6 million in 2020. Trust

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conversions typically result in higher commissions and reserves in year one but are profitable in future years.

Net investment income decreased $1.2 million from year-end 2020 to year-end 2021 compared to the $4.4 million increase from year-end 2019 to year-end 2020. The decrease is somewhat misleading and due entirely to a $3.4 million decrease in prepayment income from calls and tenders. Income from bond investments actually increased by $2.2 million, despite the continued low interest rate environment. As of December 2021, future asset cash flows exceeded the liability cash flows for a projected thirty years. A continued focus in 2021 was to better align some of the upcoming calendar years and any cash flow discrepancies. The average yield on new bond purchases in 2021 decreased approximately 23 basis points from 2020, while the yield on the total bond portfolio dropped from 4.70% at yearend 2020 to 4.56% at year-end 2021 due to calls and maturities of higher yielding securities and continued alignment of cash flows. The average yield on new mortgage loans increased slightly and was 147 basis points higher than bond yields. Net new dollars invested for 2021 were $98.8 million compared to $70.4 million for 2020.

EXPENSES For 2021, overall expenses increased $90.2 million or 28.9% from the previous year compared to a decrease of $1.61 million or .51% from year-end 2019 to year-end 2020. Death and annuity benefits paid during the year decreased by $6.5 million when compared to 2020 and were $619.9 thousand less than expected. Monthly claims expense averaged $16.3 million in 2021 compared to $16.8 million in 2020. With the significant year-overyear increase in new business sales, aggregate reserves increased $74.4 million or 143.13% from 2020. Commissions were up approximately $18.4 million or 73.02% when compared to 2020.

General insurance expenses exceeded 2020 by $3.4 million or 12.8% compared to a $658.5 thousand or 2.5% increase from 2019 to 2020, largely due to increase in salaries and benefits to support the growth of the company. Net realized capital gains of $4.7 million occurred in 2021 compared to $4.4 million of net realized capital losses in 2020. Capital gains for 2021 included $2.1 million for the sale of real estate and $2.6 million for forgiveness of the PPP loan received in 2020. Capital losses in 2020 were due to significant losses taken for impaired assets and disposals of troubled securities. No other material expense changes occurred during 2021.

NET INCOME For 2021, net income was $14.9 million, up from 2020 net income of $5.1 million. The following facts are relevant when comparing net income between 2020 and 2021: 1) new business sales rebounded significantly in 2021 after the negative impact of COVID-19 in 2020; 2) lower prepayment income from bond

NET INCOME 15 I N

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CONCLUSION

6 3 0

to benefit versus our competition. New cash flows during 2022 are expected to be reinvested at similar levels as that of 2021. During 2021, the 10-year treasury rose 60 basis points, yet remained relatively low at 1.51%. The Federal Reserve (Fed) has maintained short-term borrowing rates at effectively zero, which has acted as a stimulus to the economy; however, the Fed plans to increase rates in 2022 in addition to unwinding quantitative easing as part of a more restrictive monetary policy.

FDLIC has maintained considerable liquidity over the years and will continue to do so in the future. As stated above, current cash flow has always been sufficient to meet maturing insurance and annuity obligations, as well as operating expenses; however, if FDLIC is required, by some catastrophic event, to generate cash flow, it may do so by liquidating its highly marketable securities.

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calls and tenders distorted the year-over-year improvement in investment income; 3) as claims normalized, the increase in new business production led to increased reserves and commissions; 4) the company invested heavily in personnel to support future growth; and 5) the net realized capital gains from the sale of real estate and forgiveness of the PPP loan. Net income exceeded 2020 by $9.8 million.

The company entered 2021 with a very strong ratio of capital and surplus to assets and continued the steady and consistent growth that was interrupted by the pandemic in early 2020. The investment portfolio is highly diversified and structured to generate cash flows sufficient to provide for the cash needs of the company. These cash needs include the expected claims and all operating needs of the company. FDLIC is constantly monitoring investment activity, using technology to communicate with employees and customers, and evaluating opportunities to reduce expenses. As we slowly emerge from the global pandemic, FDLIC is strongly positioned for growth in 2022 and beyond.

CASH FLOW AND LIQUIDITY Through the inflows of premium income and the growth of investment income, FDLIC has continued to maintain extremely positive cash flow. Premium and investment income have allowed FDLIC to meet all obligations and invest a considerable amount of the remainder. This trend is expected to continue for 2022 and beyond. However, FDLIC has made appropriate plans for the future by continuing the investment strategy of matching asset maturities with liability cash flow projections.

FDLIC continues to be positively positioned from a portfolio structure as well as a reporting standpoint. Moreover, the diversification, structure of the investment portfolio, and limited exposure to troubled securities have afforded FDLIC the opportunity

FUNERAL DI REC T O RSL I FE.C O M

26

SELECTED FINANCIAL AND STATISTICAL DATA (FIVE-YEAR SUMMARY)

In Thousands Year Ended December 31

2021 2020 2019 2018 2017

New Business Issued $ 374,105.4 $ 257,477.2 $ 273,591.3 $ 242,905.6 $ 215,592.7 Premium Income 338,674.5 246,545.4 257,252.1 231,867.8 212,428.6 Insurance In Force 1,977,953.3 1,826,999.9 1,757,010.9 1,633,121.9 1,536,323.8 Aggregate Life Reserves 1,517,795.7 1,399,580.3 1,347,599.7 1,255,314.2 1,181,182.2 Capital and Surplus 155,238.4 140,743.1 134,219.2 130,008.2 116,317.1 Net Income 14,940.8 5,094.1 14,274.7 14,232.6 8,402.9 Total Assets 1,718,793.2 1,583,286.0 1,512,467.4 1,409,755.4 1,320,343.6 Net Investment Income 75,063.7 76,291.0 71,862.3 67,226.9 62,317.8 A. M. Best Rating A- A- A- A- ARatio of Capital and Surplus to Total Assets 9.03% 8.89% 8.87% 9.22% 8.81%

INVESTED ASSET MIX Bonds 84.8% 83.7% 85.0% 85.2% Stocks 1.1% 1.1% 1.0% 1.1% Mortgage Loans on Real Estate 12.2% 12.9% 12.1% 11.8% Real Estate 1.3% 1.7% 1.5% 1.2% Cash or Short-term Investments 0.4% 0.3% 0.2% 0.6% Other Invested Assets 0.2% 0.3% 0.2% 0.2%

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89.8% 0.4% 7.9% 1.3% 0.1% 0.4%

BALANCE SHEET

In Thousands

Year Ended December 31

2021 2020 ASSETS Bonds $ 1,433,127.7 $ 1,294,931.8 Preferred Stocks 1,000.0 1,000.0 Stocks-Common/Public 3,961.7 2,673.8 Stocks-Subsidiaries 11,773.6 11,031.4 Mortgage Loans 206,038.0 200,388.1 Real Estate 22,220.1 26,302.3 Policy Loans 7.2 5.4 Surplus Debentures 2,199.8 2,236.0 Cash and Short-Term Investments 6,562.6 5,359.2 Other Invested Assets 3,507.8 3,994.4 Total Invested Assets 1,690,398.5 1,547,922.4 Furniture and Equipment 1,891.9 1,794.7 Deferred Premiums - 7,513.9 Accrued Investment Income 15,948.1 15,580.0 Deferred Tax Asset 4,234.3 4,213.0 ClaimCheck Receivables 5,442.2 5,677.3 Other Assets 878.2 584.7 Total Assets $ 1,718,793.2 $ 1,583,286.0

LIABILITIES Policy Reserves $ 1,517,795.7 $ 1,399,580.3 Policy Claims 1,650.6 1,891.3 Provision For Policyholder Dividends 1,000.0 1,000.0 Premiums Received in Advance 5,323.2 3,814.1 Interest Maintenance Reserve 10,642.3 10,754.8 Accrued Commissions 5,440.2 3,946.6 Accounts Payable 508.7 637.1 Borrowed Funds 1,035.0 3,663.6 Other Liabilities 4,898.3 4,881.1 Asset Valuation Reserve 15,260.8 12,374.0 Total Liabilities $ 1,563,554.8 $ 1,442,542.9

SHAREHOLDER’S EQUITY

Common Stock $ 2,500.0 $ 2,500.0 Additional Paid-In Capital 3,031.0 3,031.0 Surplus 149,707.4 135,212.1 Total Shareholder’s Equity 155,238.4 140,743.1 Total Liabilities and Shareholder’s Equity $ 1,718,793.2 $ 1,583,286.0

FUNERA L DI REC T O RSL I FE.C O M

28

SUMMARY OF OPERATIONS In Thousands

Year Ended December 31

2021 2020 REVENUE Life Premiums and Annuity Payments $ 338,674.5 $ 246,545.4 Net Investment Income 75,063.7 76,291.0 Other Income 2,964.4 2,254.3 Total Revenue 416,702.6 325,090.7

BENEFITS & EXPENSES Death and Annuity Benefits 195,605.8 202,114.1 Other Benefits 1,078.6 1,147.0 Increase in Aggregate Reserves 126,289.0

51,935.2 Operating Expenses and Commissions 78,272.7 55,658.6 Dividends to Policyholders 1,300.7 1,503.2 Total Benefits and Expenses 402,546.8 312,358.1 Income Before Capital Gains & Income Taxes 14,155.8 12,732.6 Captial Gains (Losses) Net of Income Taxes 4,694.9 (4,445.2) Income Before Income Taxes 18,850.7 8,287.4 Less Provision for Income Taxes 3,909.9

3,193.3

NET INCOME $ 14,940.8 $ 5,094.1

STATEMENT OF SHAREHOLDER’S EQUITY In Thousands

Year Ended December 31

2021 2020 CAPITAL AND SURPLUS Shareholder’s Equity Beginning Balance $ 140,743.1 $ 134,219.2 Net Income 14,940.8 5,094.1 Unrealized Gain on Investments 1,212.6 441.2 Change in Deferred Tax 1,579.8 663.8 Change in Non-Admitted Assets (988.2) (283.6) Change in Reserve on Account of Change in Valuation Basis 637.1 Change in Asset Valuation Reserve (2,886.8) 608.4 Shareholder’s Equity Ending Balance $ 155,238.4 $ 140,743.1

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STATEMENT OF CASH FLOW

In Thousands Year Ended December 31

2021 2020 CASH FLOW FROM OPERATING ACTIVITIES

Premiums and Annuity Payments $ 340,268.3 $ 245,824.6 Investment Income Received 77,967.8 80,619.5 Other Income Received 5,162.1 2,019.3 Benefits and Loss Related Payments (196,903.8) (202,567.2) Operating Expenses Paid (77,300.5) (55,469.2) Policyholder Dividends Paid (1,312.1) (1,510.7) Income Taxes Paid (5,339.4) (1,957.3) Net Cash Provided By Operating Activities $ 142,542.4 $ 66,959.0

CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from Investments Sold $ 149,157.1 $ 182,443.2 Other Cash Provided (Applied) (406.7) 4,028.7 Acquisition of Investments: Bonds (250,332.8) (205,220.6) Stocks (695.3) (1,418.1) Mortgage Loans (37,759.1) (39,664.4) Real Estate (1,300.3) (4,404.2) Other Invested Assets (1.9) Net Cash Used In Investing Activities $(141,339.0) $ (64,235.4)

NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS 1,203.4 2,723.6 CASH AND SHORT-TERM INVESTMENTS Beginning Of Year $ End Of Year $

5,359.2 $ 6,562.6 $

FUNERAL DI REC T O RSL I FE.C O M

2,635.6 5,359.2

30

DIRECTORS INVESTMENT GROUP

BOARD OF DIRECTORS Allan Adams..................................................................Denton, TX Leslie Branon Montz........................................ Brownwood, TX Jack Cypert ...................................................................Snyder, TX Jerry Edwards.......................................................... Granbury, TX Mark France ................................................................... Austin, TX Robert Hamil................................................................ Abilene, TX Jeff Harper ............................................................. San Angelo, TX Mike Lemons.................................................................. Austin, TX Pat Patton........................................................... Sauk Centre, MN Darrell Rains................................................................... Austin, TX Dr. Reagan Ramsower.................................................Waco, TX Drew Seale..................................................................... Abilene, TX Kris Seale ....................................................................... Abilene, TX Kasi Welch Baker......................................................Midland, TX

EMERITUS DIRECTORS Tommy Welch ............................................................. Abilene, TX Bob White ........................................................... Weatherford, TX

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CORPORATE OFFICERS

Kris Seale

Terri Bannister

Terry Groban

Dwayne McGraw

Todd Carlson

Paul Lovelace

Dawson Rodriguez

Jeff Stewart

Addison Templeton

Kris Seale President & Chief Executive Officer, Chairman of the Board Terri Bannister Executive Vice President & Chief Learning Officer Todd Carlson Executive Vice President & Chief Sales Officer Terry Groban Executive Vice President & Chief Financial Officer, Secretary, Treasurer Paul Lovelace Executive Vice President & Chief Corporate Development Officer Dwayne McGraw Executive Vice President & Chief Actuary Dawson Rodriguez Executive Vice President & Chief ­­Information Security Officer Jeff Stewart Executive Vice President & Chief Marketing Officer Addison Templeton Executive Vice President & Chief Operations Officer Amy Biggs Vice President of Operations Rob Davidson Vice President of Creative Services Shaun Gaffney Vice President of Corporate Development Jason Gazaille Vice President of Finance Melissa Magers Vice President of Accounting Mitchell McLean Vice President of Digital Marketing Drew Seale Vice President of Sales Operations Zack Shahan Vice President of Security Operations Kyle Swearingen Vice President of Development Kevin Gaffney Regional Sales Vice President John Harrington Regional Sales Vice President Mark Owen Regional Sales Vice President Jeffery “Stewy” Stewart Regional Sales Vice President

FUNERA L DI REC T O RSL I FE.C O M

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6550 DIRECTORS PARKWAY ABILENE, TEXAS 79606 800-692-9515 WWW.FUNERALDIRECTORSLIFE.COM

ITEM NUMBER 200