After nearly six months of suspense, life insurers can start receiving capital through the Treasury's TARP Capital Purchase Program.

What remains unclear is how many will do so.

So far, two of six publicly traded life insurers approved to participate have said they will do so, but both said their participation is subject to the final terms of the deal. Hartford Financial Group (HIG), which announced its preliminary approval for $3.4 billion, said the deal is subject to "final negotiations and approval," of the terms. Lincoln National Corp.'s (LNC) preliminary participation for $2.5 billion is "subject to a final review of its terms and conditions," the company said Thursday.

The life insurance industry has been battered by losses on investments, and from its exposure to the stock market downdraft through guarantees on variable annuities. A partial rebound in some financial markets has taken a little pressure off some insurers; the Dow Jones Life Insurance Index (DJUSIL) is down 11.4% year-to-date, but has risen 24.7% in the last 30 days.

Some insurers have sold stock recently, relieving some capital needs. Insurers appear wary of the business and management restrictions that come with money from the Troubled Asset Relief Program. Still, TARP capital could help insurers by garnering financial strength rating upgrades from rating agencies. Such upgrades would reassure customers.

Allstate Corp. (ALL), one of the companies being offered TARP capital, gave a cautious take on its preliminary acceptance. The company will "undertake a prudent review of our participation in [the Capital Purchase Program] in light of market conditions and our current capital position," Allstate CEO Thomas Wilson said in a press release Friday. The release didn't disclose how much TARP money Allstate was eligible to receive.

Allstate's $1 billion debt offering completed earlier in the week "was significantly oversubscribed," Allstate said, and its investment portfolio has improved recently as well, which puts it on a better footing even without the money.

Principal Financial Group (PFG), Ameriprise Financial Group (AMP) and Prudential Financial Group (PRU), the other insurers called eligible by Treasury "may be more hesitant given the baggage attached (compensation restrictions, public scrutiny, etc.)," said Thomas Gallagher, a Credit Suisse analyst in a Friday note.

Hartford and Lincoln may be the only companies to end up taking the money, while other insurers may use it only as a "backstop" to raising their own capital, Gallagher wrote.

Principal Financial also raised its own money in a $1 billion common stock offering earlier this week. At the time, a Principal spokeswoman said if Principal's TARP application were accepted, the company would evaluate it and make a decision at that point.

According to the American Council of Life Insurers, life insurers' 2007 premium revenue was $600 billion, equivalent to 4.4% of GDP. Premiums have been down for some big insurers in recent quarters, and fresh capital would allow the recipients to write more new business, and to increase investments in longer-term securities. Insurers have put far more of their investments in cash and short-term securities in recent quarters in response to the weak market.

A spokesman for Ameriprise did not return phone calls asking for comment.

A Prudential spokesman said the company would be releasing a statement Friday.

Mutual life insurers, which are not traded publicly, may be allowed to apply for TARP funds under a separate, parallel process, but no mutual insurers have been approved yet for participation. Two of the largest, New York Life Insurance Co. and Massachusetts Mutual Life Insurance Co. have said they will not participate.

Shares of life insurers surged Friday. With Hartford up 9.8% recently, to $16.19, and Lincoln up 7% to $17.37. Insurers that have not yet announced their plans for the money traded up slightly to flat recently, with Allstate flat at $25.26, Ameriprise up 1.7% to $25.48, Principal up 4.2% to 19.66, and Prudential down 1.2% to $38.88.

-By Lavonne Kuykendall, Dow Jones Newswires; 312-750 4141; lavonne.kuykendall@dowjones.com