dg mutual, a mutual society that shares its profits with members, has paid out a 3.5% bonus to its Income Protection customers despite interest rates remaining at an all-time low.

Mutual societies were set up to help people in hardship and are run by members who benefit from receiving an annual share of the profits.

The ‘Holloway’ contract used by dg mutual, was designed by 19th century philanthropist George Holloway and provides a cash lump sum when members’ policies mature. The total amount depends on the society’s performance but often provides an attractive lump sum particularly with current bank interest rates standing at just 0.5%.

dg mutual, which set up in 1927 and specialises in Income Protection, has just announced bonus levels at 3.5 % for the third successive year after a careful investment strategy has continued to pay off. The organisation shared £1.6m amongst its members last year.

David Thompson, Chief Executive of dg mutual adds; “Income Protection provides a tax-free income in the event of illness or injury. Our consistent bonus levels reflect why mutual societies are a popular choice for Income Protection policies.

Not only do customers benefit from good value cover and high claim pay-out rates, they also benefit from building a lump sum for their future.”