Legal and General have reported a 19% return on its with-profits fund, which means thay can afford to raise final bonuses for its policy holders.

It is the third year running that the fund has achieved double-figure returns, say L&G.

While the effects of the bonus increases will vary according to the kind of policy, holders of a typical 25 year, £50 a month endowment policy which matures this year can expect to receive £45,769 compared to £42,743 on an equivalent policy maturing last year.

The insurer has also said that the good results had allowed it to reduce the early-exit penalties, applied to people who surrender their policy, for the second time this year.

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