The document compares the historical returns of London Life's participating life insurance account to various other financial indexes from 1980 to 2009. Over the short, medium, and long term, the dividend scale interest rate of the participating account has remained relatively stable compared to indexes like the S&P/TSX Composite and consumer price index, demonstrating the stability provided by the long-term strategy and size of the participating account.

1. London Life participating life insurance
Looking back
at historical returns
Even during times of economic change, the London Life
ACCounTAbILITY • STrenGTh • PerformAnCe
participating account’s dividend scale interest rate has
been relatively stable, compared with other financial
instruments and indexes.
London Life Government
S&P/TSX 5-year Consumer
scale London Life of Canada
Year dividend rate participating composite GIC return price index
interest 10-year bonds
account (%) index (%) (%) (%)
(%) (%)
1980 9.0 9.0 30.1 12.3 12.3 11.1
1981 9.4 9.4 -10.3 15.4 15.3 12.1
1982 9.8 9.9 5.5 13.7 14.0 9.3
1983 10.5 10.1 35.5 11.3 11.1 4.6
1984 11.1 10.3 -2.4 11.9 12.4 3.7 The long-term
1985 11.1 10.5 25.1 10.5 10.8 4.4 investment strategy
1986 11.1 10.6 9.0 9.6 9.4 4.2
1987 11.1 10.3 5.9 9.4 9.6 4.2
and size of the
1988 11.1 10.3 11.1 10.0 9.8 3.9 participating account
1989 10.8 10.4 21.4 10.2 9.8 5.3
1990 10.8 10.1 -14.8 11.0 10.8 5.0
have contributed to
1991 10.8 9.9 12.0 8.9 9.4 3.8 the dividend scale
1992 10.7 8.7 -1.4 7.3 8.2 2.2
1993 9.7 8.5 32.6 6.2 7.2 1.7
interest rate’s stability
1994 8.9 7.9 -0.2 7.3 8.3 0.2 — one factor of
1995 8.9 8.0 14.5 7.1 7.9 1.7
many that contribute
1996 8.9 7.9 28.4 5.6 6.9 2.2
1997 8.9 7.9 15.0 4.7 5.9 0.8 to your individual
1998 8.9 7.9 -1.6 4.4 5.3 1.0
policy’s performance.
1999 8.9 7.6 31.7 4.8 5.6 2.6
2000 8.4 7.3 7.4 5.3 6.0 3.2
2001 8.4 7.0 -12.6 4.1 5.3 0.7
2002 8.4 6.7 -12.4 3.9 5.1 3.8
2003 8.4 7.5 26.7 3.1 4.5 2.1
2004 7.7 6.7 14.5 2.9 4.3 2.1
2005 7.2 6.7 24.1 2.7 3.9 2.1
2006 7.2 6.5 17.3 3.2 4.2 1.7
2007 7.2 6.2 9.8 3.3 4.3 2.4
2008 7.3 -0.3 -33.0 3.0 3.4 1.2
2009 7.3 8.7 35.1 1.9 2.8 1.3

2. historical average returns
London Life London Life S&P/TSX 5-year Government Consumer
number dividend scale participating composite GIC return of Canada price index
of years interest rate (%) account (%) index* (%) (%) 10-year bonds (%) (%)
5 7.2 4.8** 7.7 2.8 3.7 1.7
(2005 -2009)
10 7.7 n/a 5.6 3.3 4.4 2.1
(2000 – 2009)
15 8.1 n/a 9.3 4.0 5.0 1.9
(1995 – 2009)
20 8.6 n/a 8.1 5.0 5.9 2.1
(1990 – 2009)
30 9.3 n/a 9.4 7.1 7.7 3.4
(1980 – 2009)
Standard
deviation 1.4 n/a 17.0 3.8 3.3 2.9
(since 1980)
* Before applicable management fees.
** This is a three-year average as corporate accounting provisions changed effective Jan. 1, 2007.
All historical average annual returns are geometric means.
NoTES
1. Dividends are not guaranteed. 4. The participating account return is the return on the total
2. Past results should not be considered indicative of participating account assets backing liabilities and surplus after
future performance. investment expense are deducted. In 2009, investment expenses
were 6.1 basis points. Investment expenses may vary from year
3. The dividend scale interest rate is the interest rate used in to year due to changes in the asset mix of the total participating
determining the investment component of the dividend account, economies of scale and other factors. The participating
scale. This rate incorporates the smoothed investment account return is reported for the calendar year Jan. 1, 2009, to
experience of assets backing participating account Dec. 31, 2009. The participating account return is a short-term
liabilities for the most recent 12-month period from July indicator of investment performance. This return is based on
1 to June 30 and also includes the smoothed gains and corporate accounting provisions issued by the Canadian Institute of
losses from prior periods and other factors. It does not Chartered Accountants regarding accounting for financial instruments
include the return on assets backing surplus. Smoothing is (assets) in effect since Jan. 1, 2007, with the exception of unrealized
used as one of the methods to help maintain the stability gains and losses on bonds, which are excluded because bonds in the
of the dividend scale interest rate. Smoothing works by participating account are generally held until maturity. Common stock
bringing gains and losses into the dividend scale interest returns are valued on a marked-to-market basis, that is, not smoothed,
rate over a period of time. and realized gains and losses on bonds are recognized as incurred.
The rate shown applies to policies issued on or after 5. S&P/TSX composite index returns include the reinvestment of
Sept. 16, 1968. These policies have a variable policy loan dividends, as taken from the Canadian Institute of Actuaries Report
rate provision, whereas policies issued before this date on Canadian Economic Statistics, 1924-2009.
have a fixed policy loan rate provision and a different
dividend scale interest rate. 6. Five-year guaranteed investment certificate (GIC) returns are based
on the nominal yields to maturity, taken from Statistics Canada,
The dividend scale interest rate is only one factor of many CANSIM V122526 (Bank of Canada website), Feb. 11, 2010.
that contribute to an individual policy’s performance. For each calendar year, the average of the monthly GIC rates is used.
The actual cash value growth in any policy varies, based
on a number of factors, such as type of product, product 7. Government of Canada bond returns are taken from Statistics Canada,
features, premium-paying period, issue age, rating, CANSIM V122486 (Bank of Canada website), Feb. 11, 2010. For each
dividend option, the policyowner dividend scale and others. calendar year, the average of the monthly values is used.
The dividend scale interest rate only changes when 8. Consumer price index is based on the change from December
the dividend scale changes as a result of investment to December taken from Statistics Canada, CANSIM V41690973
experience, including changes in investment-related (Statistics Canada website) Feb. 11, 2010.
expenses and taxes.
This information is not complete without London Life participating life insurance
financial facts, December 2009, where you can find more information about
the London Life dividend scale interest rate and the participating account.
London Life and design are trademarks of London Life Insurance Company. 46-6780-1/11