1. For producer information only. Not for client presentation. LOAN PROTECTION FOR BUSINESS OWNERS Business Loan Protection Rider

2. For producer information only. Not for client presentation. Agenda The need for coverage The loan protection coverage* your clients need: How it works Ideal characteristics of clients Types of loans covered The process for obtaining coverage * Available through the Business Loan Protection rider; available on the HH702 and HH789 Overhead Expense insurance policy for an additional cost. Not available in all states. For state approval information, visit www.principal.com/distateapprovals.

3. For producer information only. Not for client presentation. Did you know? Outstanding small business loans in the U.S. are valued at $585 billon. 1 1 U.S. Small Business Administration Office of Advocacy, Small Business Finance, Feb. 2014 2 Social Security Administration Fact Sheet, April 2014 1 in 4 of today’s 20-year olds will become disabled before retiring. 2

4. For producer information only. Not for client presentation. When disability strikes, it affects the business, too Healthy and working Revenue Profit Expenses Disabled and not working Debt Business

5. For producer information only. Not for client presentation. Business Loan Protection Reimburses a business owner for a business-related loan obligation in the event of a disability

6. For producer information only. Not for client presentation. Business Loan Protection Details Available as a cost rider on Principal Life’s Overhead Expense (OE) policy 1 The OE policy can be issued with a $0 benefit if only loan protection is desired Owners may choose to assign the benefits directly to their lender >> Benefits are sent on the first loan payment date after the elimination period is satisfied. 2 1 Available on the HH 702 and HH 789 Overhead Expense insurance policy for an additional cost. Not available in all states. Not approved in California. 2 Continue during the borrower’s Continuous Disability but not beyond the Business Loan Protection Termination Date

7. For producer information only. Not for client presentation. Advantages of Business Loan Protection For Lenders Helps manage risk – transfers the risk of the loan obligation to Principal Life. Helps ensure loan payments are not interrupted May help lenders extend loans to additional borrowers For Your Clients Helps them keep the doors of their business open Creates goodwill among their customers, employees, stakeholders and creditors May help them uphold their financial obligation and maintain their credit rating

8. For producer information only. Not for client presentation. How Business Loan Protection Works Borrower pays premiums for loan protection Upon total disability, Principal Life provides payment for the loan obligation Loan obligation risk transfers to Principal Life Principal Life Insurance Company Financial Institution Borrower Financial institution issues small business loan Borrower makes loan payments

9. For producer information only. Not for client presentation. The process for obtaining coverage EligibilityApplication SubmissionUnderwritingPolicy Delivery

10. For producer information only. Not for client presentation. Ideal borrower characteristics In good health 1 Client age: Between 18 - 60 Income: At least $15,000/year (as indicated on federal tax returns) Number of owners in the business: –Fee-for-service professionals (e.g., dentists, attorneys, CPAs, others with specialized education and licensing) – maximum of 8 owners –Other small business owners – maximum of 4 owners Do not have other income-producing non-owners who could keep the business afloat and earn money. 1 The presence of certain health conditions may result in coverage being declined, such as: Bipolar disorder, cancer, cirrhosis, chronic fatigue, emphysema, fibromyalgia, type 1 diabetes, kidney disease, heart attack, hepatitis C, multiple sclerosis, pancreatitis, rheumatoid arthritis and systemic lupus Eligibility

11. For producer information only. Not for client presentation. Product and Underwriting Guidelines Issue ages: 18 – 60 Occupation classes: 5A, 5A-M, 4A, 4A-M, 3A, 3A-M Elimination Periods: 30, 60, 90, 180, 365 days Benefit amount: Based on loan obligation, up to $20,000 per month Benefit maximum: Up to $2 million Benefit Period: End of the financial obligation or earlier (3-year minimum) Eligibility

12. For producer information only. Not for client presentation. Loan criteria Ideal loan amount Total: $2 million or less Monthly payment: $20,000 or less For greater loan amounts, Business Loan Protection can help protect a portion of the loan Loan duration 1 : At least 3 years Eligibility TIP If your client has life insurance on any business-related loans, talk to them about disability protection as well. 1 Or years remaining on the loan.

13. For producer information only. Not for client presentation. Loan criteria TYPE Term Variable Rate 1 Balloon 2 Commercial Mortgage Lease-Financing Loan Loans for working capital or increase in inventory PURPOSE Purchase of new or existing business Expensive equipment, building or land (for the business) Business expansion or renovations Increase in working capital Other business-related obligations 1 Variable interest rate loans can result in fluctuations in the monthly loan payment. They eligible monthly Business Loan Protection amount is calculated using the lowest interest rate stipulated in the loan agreement. | 2 Balloon loans are written for a specific number of years, with a balloon payment at the end of the period. These loans may be amortized over a longer period of time. The Business Loan Protection rider covers the amount of the payment for the contractual time period as stated in the loan agreement (minimum of three years) rather than the amortized payment over the longer time period. Eligibility

14. For producer information only. Not for client presentation. Loan documentation Loan specifics Duration of the loan Amount of the loan Type of loan issued Loan number Loan officer contact information Application Submission

15. For producer information only. Not for client presentation. Financial Verification Needed Underwriting Completed OE statement (including rider information) must be submitted with the application Prior year’s business federal income tax return or Profit and Loss Statement for the last 12 months – if inforce and applied OE exceeds $10,000/month Copy of loan contract/agreements* Must qualify under the earned income guidelines for OE insurance * If more than one individual is responsible for shares of the loan, Principal Life needs documentation stating the percentage of responsibility.

16. For producer information only. Not for client presentation. Final loan documentation When the loan has not yet closed:When the loan has already closed: A dated commitment letter or email from the lender or promissory note. Borrower name Lender name Name and title of loan officer or other lender contact Loan amount and duration −Total amount −Monthly payment amount Initial payment date Loan purpose Expiration date of the letter/note/offer A copy of the dated executed loan agreement signed by all parties. Borrower name Lender name Loan number Loan amount and duration −Total amount −Monthly payment amount Initial payment date Loan purpose Policy Delivery

17. For producer information only. Not for client presentation. Sales Tip WORK WITH LENDERS For the lender/financial institution – helps manage loan risk without adding to their administrative workload For the business owner – helps protect their business against the unexpected (and maintain financial health) For you – helps grow your client base and create referral opportunities Get more information at principal.com/marketniches

18. For producer information only. Not for client presentation. For producer use only. Not intended for use in sales situations or with the general public. Disability Insurance has certain limitations and exclusions. For costs and complete details of coverage, contact your Principal Life Representative. Policy and rider descriptions are not intended to cover all restrictions, conditions or limitations. Refer to policies and riders for full details. Policies and riders are subject to state availability. Some riders are subject to an additional premium. 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. 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. Insurance issued by Principal Life Insurance Company a member of the Principal Financial Group ®, Des Moines, IA 50392, www.principal.comwww.principal.com DI9202 | 12/2014 | © 2014 Principal Financial Services, Inc. Questions?