For financial professional information only. Not for distribution to the public. Business Owner Gap Analysis The Principal ® to the Rescue

For financial professional information only. Not for distribution to the public. Turbulent Time for Small Business Unstable Economic conditions – Access to credit – Recession – Possible Bank failures Regulatory environment Benefits Taxes

For financial professional information only. Not for distribution to the public. Taxes – An Ongoing Challenge The top 10% of taxpayers earn 47% of the income in the U.S. and pay 71% of the income taxes* The top estate tax rate is 45% And what about Social Security and Medicare taxes? *Source: Who Paid What in 2006, accountingweb.comaccountingweb.com

For financial professional information only. Not for distribution to the public. Issues Facing Today’s Business Owner Business and personal financial plans may be falling short of goal –Retirement Income –Business Protection –Exit Strategies –Wealth Transfer –Income Protection –Survivor Income Financial gaps are top of mind

For financial professional information only. Not for distribution to the public. Fact: The economic downturn presents challenges AND opportunities Business owners are looking for an edge to fill gaps in these plans.

For financial professional information only. Not for distribution to the public. The Principal Financial Group ® Can Help Financial Strength Top-tier financial strength ratings* Financial Solutions Investments Annuities Life insurance *Third party ratings relate to Principal Life Insurance Company, the largest member company of the Principal Financial Group, only and do not reflect any ratings actions or notices relating to the U.S. life insurance sector generally. Ratings are current as of See our Company Profile for the most current ratings. The four rating agencies referenced have placed negative outlooks on the U.S. life insurance sector. A negative outlook means that the rating of many U.S. life insurance companies may be downgraded due to impact of negative market conditions.

For financial professional information only. Not for distribution to the public. Life Insurance to the Rescue A powerful, tax-advantaged tool that can fill the gap in business and personal financial plans. Life insurance can be a solution for business owners and their employees in these turbulent times.

For financial professional information only. Not for distribution to the public. Life Insurance to the Rescue A financial hedge – A tax-preferred call option paid in installments, with a partial refund feature – A mortality based zero coupon bond As an asset class As a tax-advantaged accumulation tool A way to insure the gaps!

For financial professional information only. Not for distribution to the public. Three Steps to Success Introducing the Business Owner Gap Analysis

For financial professional information only. Not for distribution to the public. Help your clients address these key gaps

For financial professional information only. Not for distribution to the public. The Retirement Gap filling the gap that Social Security and your qualified plan doesn’t cover

For financial professional information only. Not for distribution to the public. The Retirement Gap The Approach – For the owner – Use The Retirement Gap Chart flyer – For the owner’s key employees – Use Executive Benefit Plan Comparison flyer The Solution – Principal Executive Bonus Plus SM – The Executive Nonqualified “Excess” Plan SM – Principal ® Select Reward Plan – Principal LLC Bonus SM and Principal S Owner Plus SM

For financial professional information only. Not for distribution to the public. The Market Gap filling the investment gap that the recent market downturn has created

For financial professional information only. Not for distribution to the public. The Market Gap The Approach – Financial Planning Tools – Employee Financial Resource Program SM The Solution – Principal Universal Life Flex SM – Principal Variable Universal Life Income II SM – … and more!

For financial professional information only. Not for distribution to the public. The Business Value Gap Helping to secure the gap between your business’s fair market value and your book value

For financial professional information only. Not for distribution to the public. The Business Value Gap The Approach – Business Valuation – Buy-Sell Review The Solution – Exit Planning Sales Process Guide – Work with Advanced Solutions

For financial professional information only. Not for distribution to the public. The Estate Value Gap filling the gap in your estate plan caused by the recent market downturn

For financial professional information only. Not for distribution to the public. The Estate Value Gap The Approach – Estate Concepts – Estate Tax Analysis The Solution – Principal Survivorship Universal Life Protector SM – Principal Universal Life Protector III SM (2007)

For financial professional information only. Not for distribution to the public. The Government Gap filling the gap in your plan caused by reduced government benefits

For financial professional information only. Not for distribution to the public. The Government Gap Direct effect: If business owner depends on government programs as part of the business model. Tangential effect: Taxes Important to plan now for these effects of the Government Gap – Business owners need to seize their own destiny – They can benefit from your help

For financial professional information only. Not for distribution to the public. Gap Tools and Concepts ANALYSIS Business Valuation Buy-Sell Review Estate Analysis Estate Planning Strategies CONCEPTS Exit Planning Wealth Transfer Planning Life Insurance Planning Executive Benefits Key Person

For financial professional information only. Not for distribution to the public. Go Save the Day Business owners need help prioritizing their needs In light of recent market events, they need help filling the gaps in their plans You and The Principal can help!

For financial professional information only. Not for distribution to the public. Solutions That Help Give Business Owners an Edge

For financial professional information only. Not for distribution to the public. While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. Insurance products from the Principal Financial Group ® (The Principal ® ) are issued by Principal National Life Insurance Company (except in New York) and Principal Life Insurance Company. Principal National and Principal Life are members of the Principal Financial Group, Des Moines, IA 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. Copyright ©2009 Principal Financial Services, Inc. #