A Letter to You From the President

In Turbulent Times, Beneficial Remains Financially Strong and Committed to You

Dear Beneficial Policyowner:

As a Beneficial policyowner, you may be wondering how the recent turbulence in the financial markets may affect Beneficial Financial Group and your Beneficial life insurance policy or annuity. We know that, now more than ever, you want a strong financial services organization you can depend on to help you protect your family or business and meet your other financial challenges and opportunities.

Without doubt, the current economic climate affects everyone. However, despite these challenging times, Beneficial Financial Group remains financially strong. The facts listed below underscore our financial strength and our commitment to be there for you when you need us most:

• Your money is invested in investment-grade, fixed-income securities with an average weighted rating of A+ (ratings provided by third-party rating agencies: Standard & Poor’s^®, Moody’s, Fitch, and DBRS^®).
  
  
• Beneficial remains highly capitalized. Our high capitalization is a strong measure of our ability to meet our financial obligations to our policyowners. As of June 30, 2008, Beneficial maintained capital and surplus of $345 million, an increase of $56 million from June 30, 2007. This means that as of June 30, 2008, for every $1 of policyowner funds on deposit with Beneficial, we held an additional 11 cents of shareholder funds. Based on our current projections, we expect capital and surplus to be even higher by the end of 2008. We are committed to remaining strongly capitalized.
  
  
• Beneficial’s 2008 operating profits and sales remain strong, and our new money and renewal rates are among the best and most consistent in the industry. We expect 2008 to be another outstanding year.
  
  
• For the past 103 years, Beneficial has made protecting families through economic hardships a top priority. During the stock market crash of 1929 and the resulting economic depression of the 1930s, Beneficial honored policyowners’ requests for policy loans and surrender payments, although deferring such cash payments was allowed by law. Through both World Wars, Beneficial paid death claims for insureds who died while serving their country, without invoking policy war clauses that allowed denial of such claims.

Today, as in times past, our commitment to you as a Beneficial policyowner is to be there when you need us most, despite whatever challenges may exist. Your Beneficial financial professional will be pleased to answer any questions you may have about Beneficial or your policy. Thank you for the opportunity to serve you.

With appreciation,



Kent H. Cannon, FSA
President and CEO