Principal Preferred Series Annuity SM Training

Looking at your client’s needs Why fixed annuities? Principal Preferred Series Annuity Agenda For financial professional use only. Not for distribution to the public.

In or near retirement Uncomfortable with potential market volatility Looking to diversify his/her portfolio Concerned about outliving assets Saving for the long term Looking for principal protection Wanting a guaranteed death benefit and guaranteed income for life* Is your client… * Guarantees are based on the claims-paying ability of Principal Life Insurance Company. For financial professional use only. Not for distribution to the public.

Provides a way to save tax-deferred for retirement Provides a long-term savings plan Provides guaranteed income for life Assures continuing income for spouses Provides a guaranteed death benefit to beneficiaries Death benefit passes outside probate Why fixed annuities? For financial professional use only. Not for distribution to the public.

3, 4, 5, 6 and 7-year guarantee periods with matching surrender charge periods Interest rate tiers may apply depending on the amount of the initial premium Depending on the premium amount, client may lock in a higher interest rate May not be available on all guarantee periods Principal Preferred Series Annuity For financial professional use only. Not for distribution to the public.

The minimum initial premium is $5,000 (qualified and nonqualified – state variations may apply). The maximum initial premium is $2 million. Additional premiums are allowed in the first contract year only ($2,000 minimum). Maximum issue age is 90 (state variations may apply). Features For financial professional use only. Not for distribution to the public.

Initial interest rate guaranteed for 3, 4, 5, 6 or 7 years Renewal window during the last 30 days of the guarantee period Automatically renews into the same guarantee period (unless client elects another guarantee period); surrender charges restart Receive the best rate between the beginning and end of the renewal window During the renewal window clients can withdraw the value of their account without paying any surrender charges Interest rate guarantee and renewals* *30-day renewal feature is not available in Florida. Florida contracts will renew into a one-year guarantee period at the end of the initial guarantee period and surrender charges won’t restart. For financial professional use only. Not for distribution to the public.

If additional premiums are made in the first contract year: The initial premium earns the interest rate that’s guaranteed until the first contract anniversary. Each additional premium will receive the interest rate in effect when the premium is received, until the first contract anniversary. On the first contract anniversary, the interest rate will be the dollar-weighted average of the year-one base rates (rate is guaranteed until the end of the initial guarantee period). Additional premiums For financial professional use only. Not for distribution to the public.

Set at issue by Principal Life Insurance Company Redetermined/reset at renewal/re-up Guaranteed Minimum Interest Rate For financial professional use only. Not for distribution to the public.

As a bonus, a premium credit may apply to premium payments made during the first contract year; this is set at issue by Principal Life Insurance Company. If the benefit option is elected in the first three contract years, the premium credit is subtracted from the amount applied to the benefit option. The premium credit may not be available with all guarantee periods. Premium credit For financial professional use only. Not for distribution to the public.

Clients can choose between “return of premium” (in all years) or “no return of premium” (in all years) on the application at contract issue.* Once elected, it can’t be changed (i.e., it can’t change at automatic renewal). The contract defaults to “no return of premium” (in all years). If “no return of premium” is elected, client will receive a higher base rate. Optional guaranteed return of premium *Return of premium option may not be available on all guarantee periods and in all states at all times. For financial professional use only. Not for distribution to the public.

The free surrender amount is the greater of 15% of the contract year’s beginning account balance, or the client’s RMD. The Flexible Withdrawal Option allows for scheduled partial surrenders on an annual, semiannual, quarterly or monthly basis for no additional fee. Withdrawals made prior to age 59½ may be subject to a 10% IRS penalty tax. How can your client access his/her money? For financial professional use only. Not for distribution to the public.

Contract Year 3-year guarantee 4-year guarantee 5-year guarantee 6-year guarantee 7-year guarantee 18% 27% 36% 4 55% 64% 73% Surrender charges For financial professional use only. Not for distribution to the public.

If clients withdraw the free surrender amount. Death or annuitization With the waiver of surrender charge rider: Surrender charges may be waived if one year after the effective date the client is diagnosed as terminally ill, becomes totally and permanently disabled or enters a medical care facility and is confined there for 60 consecutive days or more. When are surrender charges waived? For financial professional use only. Not for distribution to the public.

Insurance issued by Principal Life Insurance Company, a member of the Principal Financial Group ®, Des Moines, IA For financial professional use only. Not for distribution to the public. PD | © 2016 Principal Financial Services, Inc. | t | 08/2016 Contract rider descriptions are not indented to cover all restrictions, conditions or limitations. Refer to rider for full details. No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval system, without prior written permission from the Principal Financial Group ®. Not FDIC or NCUA Insured May lose value · Not a deposit · No bank or credit union guarantee Not insured by any Federal government agency