1 August 2009

Clerical Medical With-Profits Mid-Year 2009

Clerical Medical announces new bonus rates for the mid-year from 1st August 2009.

Key Facts

Clerical Medical has changed the way final bonus rates for unitised with-profits policies are set, to make them consistent with the way MVRs are set. Final bonus rates will now be based on a rate which applies for the quarter of the year in which the policy started, rather than the year of entry. The effect will vary by policy. The way final bonus rates for traditional policies are set remains unchanged and will continue to be based on the year of entry.

Progress of a 25 year endowment

A traditional £50 per month 25 year endowment plan maturing on 1/8/2009, grew in the last year from £31,126 to £33,024 which is a 4.1% return on the year. This includes £600 premiums invested during the year.

Full details of the current bonus and MVR rates on our website at www.clericalmedical.co.uk

1. Past performance is not necessarily a guide to future performance.

2. The ultimate value of a with-profits policy depends on the level of future bonuses and cannot be guaranteed. A MVR may apply. The element of final bonus is not guaranteed. Investors may not get back the amount originally invested.

3. Bonus Rates are normally reviewed on 1 February and 1 August, but we may need to change at other times of the year if investment conditions change significantly. We reviewed final bonus rates and MVR rates in April and May this year, following sharp swings in stock markets.

4. Regular bonus, also known as a reversionary bonus, is the amount normally added to a with-profits policy each year. Final bonus, also known as the terminal bonus, can be added to a policy when it pays out and can vary depending on a number of factors and is not guaranteed.

5. Market value reduction or MVR is an adjustment, which can be applied to those who leave the with-profits fund before their policies mature or on other dates when guarantees do not apply. It ensures that all policyholders receive a fair share of the fund’s assets. As and when fund performance improves and stock markets become more stable, we will aim to reduce MVRs accordingly.