The Value of London Life Participating Life Insurance

London Life participating life insurance gives you a foundation of guaranteed values and tax-advantaged growth. It also gives you the opportunity to receive dividends, based on your participation in a pool with 1.6 million other participating policies. It offers both stability and flexibility in a permanent life insurance solution.

While some companies have backed out of the participating life insurance market, we will continue to be a leader in this area. We believe in participating life insurance and know the value it has delivered to participating policyowners. London Life continues to have the largest Canadian participating account, with $19.8 billion in assets, including $1.6 billion in surplus (at Dec. 31, 2011). Our participating account has a strong surplus position, which helps provide stability and strength to the participating account, and can help smooth the impact of fluctuations in experience on dividends.

Some key benefits of participating life insurance from London Life

Proven performance

• Our long-term investment strategy, together with our strategy of smoothing the returns for the purpose of determining the dividend scale interest rate, helps reduce the impact of short-term volatility on participating life insurance dividends.
• London Life’s 30-year average dividend scale interest rate was 9.1 per cent for the period 1982 to 2011. Investment returns are an important factor in determining the amount of dividends that will be paid.
• In 2011, dividends distributed to London Life participating policyowners were $757 million.
• Effective Jan. 1, 2012, the London Life participating policyowner dividend scale interest rate is 6.4 per cent.
• London Life has paid dividends to participating policyowners every year since 1886.

Accountability

• In 2011 London Life participating policyowner death claims totaled $318.5 million.
• In 2011 the portion of surplus distributed to London Life participating policyowners remained at 97.5 per cent, unchanged since 1966.
• London Life is governed under the federal Insurance Companies Act of Canada, which includes provisions for how participating accounts must be managed within a company with shareholders, and includes the requirement for a participating account management policy and a policyowner dividend policy to be established and maintained.

Position of strength

• London Life continues to have the largest Canadian participating account, measured by assets, with $19.8 billion in total assets, which includes 1.6 billion in surplus at Dec. 31, 2011. Surplus, and income generated by it, is used to help ensure financial strength and stability. It can also be used for other purposes such as financing new business growth within the participating account, providing for transitions during periods of major change, or smoothing the impact of fluctuations in experience on dividends related to investment volatility, mortality and expenses.
• London Life has 1.6 million participating life insurance policies in force at Dec. 31, 2011.

Prudent management

• The historical performance of the London Life participating account is due not only to strong investment results, but also to prudent selection of underwriting risks and favourable mortality and expense-management results.
• Mortality is a unique feature of participating life insurance. As people live longer, this positive mortality experience is passed to policyowners through dividends. Every decade of the last century showed mortality improvement.
• London Life has the largest Canadian participating account, measured by assets, which provides considerable opportunities when it come to achieving expense efficiencies.

Commitment to participating life insurance

• London Life is committed to excellence in participating life insurance. While some companies have backed out of the participating life insurance market, we will continue to be a leader in this area. We believe in participating life insurance and know the value it has delivered to participating policyowners.

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Past performance statistics are not necessarily indicative of future performance, which may be more or less favourable. For more information on participating life insurance, see Your guide to London Life participating life insurance or London Life participating life insurance Financial facts 2011, both available on our website.

London Life and design are trademarks of London Life Insurance Company.

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This Participating Life Insurance Update Brought to You By:

Brendon Laing

Freedom 55 Financial Security Advisor

Suite 200-140 Ouellette Place
Windsor, Ontario N8X 1L9

Office: 519-967-1180 ext. 266
Cell: 519-819-9403
Email Brendon Laing