Legal & General's with-profits fund returned 1.7% in 2011 in a year which saw total bonuses of £459m added to with-profits policies.
The insurer also said it will maintain annual bonus rates at last year's levels for conventional endowment mortgage customers.
It added the majority of bond and unitised pensions customers will receive policy additions higher than the 1.7% return of the with-profits fund.
The company said total bonuses of £459m were added to with profits policies during 2011, up 11.6% on the previous year's figure of £411m. It said the increase reflects a rise in the number of customers whose with-profits policies matured over the year.
Legal & General's with-profits actuary Tim Sheldon said the wide spread of assets in its with-profits fund will appeal to investors seeking steady growth.
"In current market conditions the core features of with profits, which combine a balanced asset mix with smoothing of investment returns and underlying guarantees, mean with profits remains a good choice for investors seeking steady growth from a spread of investments over the longer term with some downside protection," he said.
"In these uncertain times the benefits of smoothing and guarantees can provide advantages to with profits policyholders over other forms of investment."
AWD Chase de Vere certified financial planner Patrick Connolly said, unlike many other providers, with-profits investments are still important to Legal & General as it adopts a long-term approach and places strong emphasis on smoothing returns for policyholders.
"Its with-profits fund made a small positive return in 2011, with performance being held back by a reasonable weighting to equities," he said. "This approach should prove beneficial for policyholders in the longer-term."
But he added despite being one of the stronger with-profits providers, Legal & General is struggling to generate much cheer for policyholders with some bonus rates and payouts reduced and exit penalties remaining in place on a number of policies.
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