After nearly six months of suspense, six life insurers were approved to participate in the Treasury's TARP Capital Purchase Program. But at least two have turned down the chance to have the government as an investor.

Ameriprise Financial Inc. (AMP) turned down the money outright, and Prudential Financial Inc. (PRU) is also expected to say no, according to a Wall Street Journal report.

Principal Financial Group (PFG), which raised $1 billion in a common stock offering earlier this week, said Friday that it had received preliminary approval for $2 billion from the Trouble Asset Relief Program, and its decision whether to participate "will be based on a review following receipt of all the terms and conditions, both economic and non-economic," said Larry Zimpleman, president and chief executive officer of Principal Financial, in a Friday statement.

Allstate Corp. (ALL), which also raised $1 billion in a debt offering, said it would consider the offer.

Hartford Financial Group (HIG) and Lincoln National Corp. (LNC) said they have preliminary approval for $3.4 billion and $2.5 billion, respectively, from the TARP, and both said their acceptance is subject to a review of the final terms.

Hartford and Lincoln may end up being the only companies to take the money, while other insurers may use it only as a "backstop" to raising their own capital, Credit-Suisse analyst Thomas Gallagher wrote in a Friday note.

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 is down 11.4% year-to-date, but has risen 24.7% in the last 30 days.

One insurance executive said that opening TARP up to insurers may backfire by increasing public concern over the industry's solvency, continuing a drag on sales and forcing agents to spend yet more time reassuring customers.

In a Friday note, ratings agency Standard and Poor's said that TARP participation could win favorable outlook revisions for some life insurers, and in addition, "in limited cases, we could raise ratings if factors beyond capital alone support an upgrade," the report said.

But Robert E. Broatch, chief financial officer of Guardian Life Insurance Co. of America, the fourth-largest mutual life insurer, believes that TARP will be good for the industry, even though Guardian decided not to apply itself.

In a Dow Jones Newswires interview, he called TARP a "sign of need" that would put recipients at a competitive disadvantage. Existing customers of insurers that received TARP funds would be reassured, "but it is not particularly reassuring to new customers who come in the door."

Mutual life insurers are also allowed to apply for TARP. Besides Guardian, New York Life Insurance Co. and Massachusetts Mutual Life Insurance Co. have said they will not participate.

Gary Wendlandt, chief investment officer and vice chairman of New York Life, said in an interview with Dow Jones Newswires Friday that, with more than $12 billion in surplus capital at the end of 2008, "we have more than enough capital to achieve our strategic objectives."

Guardian's Broatch said his company focused on building up capital in past quarters, resulting in two financial strength ratings upgrades for the insurer, out of only a handful given to life insurers last year.

After a surge in early trading, shares of life insurers were mixed. Hartford closed down 1%, at $14.60, Lincoln closed down 0.7% at $16.12, Ameriprise closed up 1.4% at $25.40, Principal closed down 1.5%, at $18.58, Prudential fell 4.1% to close at $37.75, and Allstate dropped 3.8% to close at $24.30.

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