Mixed News From Clerical Medical

Clerical Medical have joined the party and disclosed their With Profits bonus rates for 2002.  On the whole, unitised With Profit bonus rates have been reduced by 1%.  For example, where bonuses were 5% last year, this year they will be 4%.  Clerical Medical say that they have adjusted bonus rates "to reflect the transition to an environment of low inflation and low investment returns which is likely to continue over a period of years".  As well as dropping annual (otherwise known as reversionary) bonuses, Clerical Medical have also announced cuts to their terminal bonuses (otherwise known as final bonuses).  This also reflects the low returns received on their investments over time.  However, Clerical have said that "the current levels of terminal bonus rates continue to anticipate a strong short-term recovery in stock markets".The good news from Clerical Medical is that they are removing their Market Value Adjustment penalty.  Until the end of January 2002, this penalty was being charged on withdrawals from the With Profits fund in excess of £50,000.  Alternatively, if you would like to find out more on with profits visit the section in Life Cover Adviser.com.