For internal and producer information only. Not for use in sales situations. Principal Income Annuity

Agenda Profile of an income annuity client Principal Income Annuity Why income annuities? For internal and producer information only. Not for use in sales situations.

Is nearing or in retirement Needs to supplement existing retirement funds Wants a diversified investment portfolio Is concerned about outliving assets Wants to start receiving income from the annuity soon For internal and producer information only. Not for use in sales situations. A typical income annuity client …

Variety of benefit options: – Fixed Period Income (between five and 30 years)* – Life Income – Life Income with Guaranteed Period (between five and 30 years) – Joint and Survivor – Life Income with Cash Refund – Life Income with Installment Refund Fixed Period options between five and 15 years available in Maryland. Fixed Amount not available in Maryland. Guarantees are based on the claims paying ability of Principal Life Insurance Company. For internal and producer information only. Not for use in sales situations. Principal Income Annuity Features

Maximum issue age is 95 (79 for Life Income only) Contribution limits – Minimum contribution: $10,000 for qualified and nonqualified plans – Maximum contribution: $2,000,000 for qualified and nonqualified plans  $5,000,000 with home office approval For internal and producer information only. Not for use in sales situations. Principal Income Annuity Features

Liquidity Rider* – Automatically included – No cost – Can take a one-time withdrawal – Up to 100% of the discounted value of the remaining guaranteed payments (minimum $2,500) – Available with all benefit options except Life Income (both Single Life and Joint and Survivor) – Not available with the optional Consumer Price Index (CPI) Rider * May not be available in all states. For internal and producer information only. Not for use in sales situations. Principal Income Annuity Features

Year 5 – 50% withdrawal = $22,335 (current) – $20,938 (up 2%) – $23,882 (down 2%) – Adjusted remaining monthly payments for yr 5: $4,185/year Years 6–10 – Payment = $4,185/year Years 11+ – Payment = $8,370/year For internal and producer information only. Not for use in sales situations. Assumptions: – Male – Age: 75 – Premium: $100,000 – Benefit Option: Life Income with 10-year Guarantee Period Years 1–4 – Payment = $8,370/year Principal Income Annuity Liquidity Rider Hypothetical Example

Choice of the following optional cost of living riders: – Annual Increase Rider – Consumer Price Index (CPI) Rider For internal and producer information only. Not for use in sales situations. Principal Income Annuity Inflation Protection Riders

Optional Available at issue No additional fee Choose from: – 1%, 2%, 3%, 4% or 5% Automatically increases payments each year For internal and producer information only. Not for use in sales situations. Principal Income Annuity Annual Increase Rider

Optional Available at issue No additional fee Opportunity to increase payments Based on the Consumer Price Index for All Urban Consumers (CPI-U) No limit on total increases over life of the contract For internal and producer information only. Not for use in sales situations. Principal Income Annuity Consumer Price Index (CPI) Rider

Payment calculated on the anniversary of the first payment Based on percentage change in CPI-U for the past year If change is negative, payments will not decrease – Payments remain the same until a future year’s CPI-U increases to offset previous negative year’s or years’ change(s) Rider not available with Fixed Period or Fixed Amount income options If CPI Rider is selected, Liquidity Rider not available For internal and producer information only. Not for use in sales situations. Principal Income Annuity Consumer Price Index (CPI) Rider

For internal and producer information only. Not for use in sales situations. Principal Income Annuity Consumer Price Index (CPI) Rider Example Contract Anniversary CPI-U Index Value CPI-U % Change from Initial Value Payment Change % from Initial Pmt Income Payment At Issue100$ % $ %3.00%$ % $ % $550 Assume: Initial Payment Amount of $500/month Starting CPI-U Index Value of 100

Provide an income stream for life Peace of mind — payment stability helps cover essential expenses Changing sources of retirement income Tax advantages of nonqualified annuities No market risk with an income annuity — ability to be more aggressive with remaining assets in portfolio Flexibility of income benefit options Can choose from optional inflation protection riders For internal and producer information only. Not for use in sales situations. Why Income Annuities?

Insurance issued by Principal Life Insurance Company, a member of the Principal Financial Group ®, Des Moines, IA For internal and producer information only. Not for use in sales situations. PD855-4 | © 2014 Principal Financial Services, Inc. | t ug | 08/2014 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 ®.