1. Principal Investment Plus Variable Annuity SM For financial professional use only. Not for distribution to the public.

2. Please Note: To complete this course you must view every slide AND complete and submit the attestation at the end of the course. Use the arrow keys at the bottom to move through the course.

3. Profile of a variable annuity client Principal Investment Plus Variable Annuity –Product features –Investment options –Premium Payment Credit Rider –Principal Income Builder 3 and Principal Income Builder 10 Riders Why variable annuities? Agenda For financial professional use only. Not for distribution to the public.

4. Planning for retirement Saving for the long term Interested in growth potential Interested in an investment that provides guaranteed income for life Interested in tax-deferred savings Interested in beneficiary protection A typical variable annuity client is … For financial professional use only. Not for distribution to the public.

5. Single or multiple premiums –Minimum initial premium Nonqualified: $5,000; qualified: $2,000 –Minimum additional premiums Nonqualified and qualified: $500 –Maximum premium Nonqualified and qualified: $2 million Issue age: 0-85 Mortality and expenses: 1.25% Administration charge: 0.15% Seven-year surrender charge scale by deposit –6%-6%-6%-5%-4%-3%-2% Free look period – invest directly into investment options Product Specifications For financial professional use only. Not for distribution to the public.

6. Free Surrender Amount – greater of: 10% of premium payments, earnings or Required Minimum Distribution (RMD) amount Waiver of Surrender Charge Rider – surrender charges waived at disability, nursing home confinement and terminal illness* Surrender charges waived at death or annuitization Liquidity For financial professional use only. Not for distribution to the public. * Automatic issue to age 85. There is a one-year waiting period before the rider can be exercised. State variations may apply.

7. Greater of: −Accumulated value, −Premium payments, minus any withdrawals and surrender charges, or −The highest seventh-anniversary accumulated value plus and premium payments and less any withdrawals made after than anniversary Death Benefit For financial professional use only. Not for distribution to the public.

8. Variable subaccounts –Access to multiple investment advisors –Advised and sub-advised subaccounts –Full complement of Morningstar Equity Style Box TM Options –Low cost index fund of fund options for GMWB clients Three fixed accounts –One-year guaranteed fixed account –Two Dollar Cost Averaging (DCA) fixed accounts Investment Options For financial professional use only. Not for distribution to the public.

9. Six-month or 12-month option Provides a guaranteed rate of return for the six or 12-month period All funds must be transferred out over the given time period Each monthly transfer amount is equal to the DCA Account Value divided by the number of months remaining in the account (note: transfers always happen on the 28 th of the month) Only available for new premium and can’t be used in conjunction with Automatic Portfolio Rebalancing DCA Plus Program For financial professional use only. Not for distribution to the public.

10. If the Premium Payment Credit rider is selected, clients may not participate in the DCA Plus program If money is added to an existing DCA account, the premium will receive the rate in effect when the money is added and will be transferred out over the monthly transfers remaining in the current account Clients are allowed one six-month and one 12-month DCA account at a given time DCA Plus Program For financial professional use only. Not for distribution to the public.

11. Premium Payment Credit Two GMWB Riders: –Principal Income Builder 3 (PIB3) –Principal Income Builder 10 (PIB10) Optional Riders For financial professional use only. Not for distribution to the public.

12. 5% credit applied to each premium payment in the first contract year Longer surrender charge scale with this rider –Nine-year 8%-8%-7%-6%-5%-4%-3%-2%-1%-0% Cost: 0.60% –Assessed only for the first eight contract years Must be elected at issue Premium Payment Credit Rider For financial professional use only. Not for distribution to the public.

13. The 5% credit is invested using same allocation mix Once elected, rider cannot be terminated If elected, the DCA Plus Program is not available If contract annuitized in the first three contract years, Premium Payment Credit subtracted from amount applied to income option Premium Payment Credit Rider For financial professional use only. Not for distribution to the public.

14. Premium Payment Credit rider may be appropriate for individuals if: –All premium payments are made during the first contract year –They plan to keep the annuity contract for nine years or longer –They don’t anticipate taking withdrawals in excess of the free surrender amount Premium Payment Credit Rider For financial professional use only. Not for distribution to the public.

15. Clients who are interested in receiving guaranteed income for life or joint life (spouses only) Clients who may be interested in taking advantage of higher bonus percentages in the first three years of the contract if no withdrawals are taken Clients who are looking for a lower cost guaranteed minimum withdrawal benefit rider and are comfortable with receiving a lower income amount Principal Income Builder 3 For financial professional use only. Not for distribution to the public.

16. Tiered For Life or Joint Life percentage Bonus: For current bonus information, refer to the prospectus and applicable GMWB Percentages prospectus supplement Step-Up: annual automatic Cost: 1.05% based on For Life Withdrawal Benefit Base (maximum charge 1.65%) – same for both single and joint life Age requirements: 45-80 Principal Income Builder 3 For financial professional use only. Not for distribution to the public.

17. PIB3 allows Single Life or Joint Life (Joint Life tiered percentage is lower than Single Life) Client does not need to elect Joint or Single until the time of first withdrawal The current GMWB bonus and withdrawal benefit payment percentages are provided in a monthly prospectus supplement. Refer to the prospectus for additional details. Principal Income Builder 3 For financial professional use only. Not for distribution to the public.

18. Available first three contract years Three-year bonus: For current bonus information, refer to the prospectus and applicable GMWB Percentages prospectus supplement Automatically applied to the guarantee each year until withdrawal is taken Once a withdrawal is taken, no longer eligible for the bonus Bonuses are not included in the contract’s accumulated value Principal Income Builder 3 For financial professional use only. Not for distribution to the public. Bonus

19. Clients who want to take advantage of the longer bonus period Clients who are interested in guaranteed income for life (or joint life – spouses only) Clients who are willing to pay more for a longer bonus period and a higher guaranteed income amount Principal Income Builder 10 For financial professional use only. Not for distribution to the public.

20. Tiered For Life or Joint Life percentage Bonus: For current bonus information, refer to the prospectus and applicable GMWB Percentages prospectus supplement Step-Up: annual automatic Cost: 1.25% based on For Life Withdrawal Benefit Base (maximum charge 2.00%) – same for both single and joint life Age requirements: 45-80 Principal Income Builder 10 For financial professional use only. Not for distribution to the public.

21. PIB10 allows Single Life or Joint Life (Joint Life tiered percentage is lower than Single Life) Client does not need to elect Joint or Single until the time of first withdrawal The GMWB bonus and Withdrawal Benefit Payment percentages are provided in a monthly prospectus supplement. Refer to the prospectus for additional details. Principal Income Builder 10 For financial professional use only. Not for distribution to the public.

22. Available first ten contract years Ten-year bonus: For current bonus information, refer to the prospectus and applicable GMWB Percentages prospectus supplement Automatically applied to the guarantee each year until withdrawal is taken Once a withdrawal is taken, no longer eligible for the bonus Bonuses are not included in the contract’s accumulated value Principal Income Builder 10 For financial professional use only. Not for distribution to the public. Bonus

23. Annual step-up Guaranteed withdrawal amount automatically resets to match any growth in the account value Available each year to the later of age 80 or 10 years after contract date Rider charge resets to current charge at step-up If charges increase, client may opt out of future step-ups to keep their current fee Step-Up For financial professional use only. Not for distribution to the public.

24. Five investment options to choose from: –Diversified Growth Account –Diversified Balanced Account –Diversified Income Account –Diversified Growth Managed Volatility Account –Diversified Balanced Managed Volatility Account Use indexes and a fund-of-funds investment approach Must choose one of the five options GMWB Investment Options For financial professional use only. Not for distribution to the public.

25. For Life Withdrawal Benefit Payments For financial professional use only. Not for distribution to the public. Withdrawal percentages are based on age at time of first withdrawal Joint life percentage is lower because the payout period can be considerably longer on a joint life election. Based on younger covered life at time of first withdrawal. Withdrawals prior to age 59½ may be subject to 10% IRS penalty tax The GMWB Withdrawal Benefit Payment Percentages are provided in a monthly prospectus supplement

26. Withdrawals greater than the For Life withdrawal payment percentage will be treated as excess withdrawals All withdrawals prior to the contract anniversary following the oldest owner’s age 59½ are treated as excess withdrawals when calculating the For Life withdrawal benefit Withdrawal percentages are locked in at the time of first withdrawal and do not change for the life of the contract For Life Withdrawal Benefit For financial professional use only. Not for distribution to the public.

27. Not available to non natural owners Spouse must be either joint owner and/or primary beneficiary Spouse must be legally married Prior to withdrawals, eligible spouse changes can be made due to divorce or marriage (no changes after withdrawals begins) Only one spouse continuation allowed for this rider Unique Features for Joint Life For financial professional use only. Not for distribution to the public.

28. At death of the owner (or first owner — if joint owners) –Non-Spouse beneficiary can take the death benefit Principal Income Builder 3 For financial professional use only. Not for distribution to the public. What happens at death?

29. Spousal Continuation with the Income Builder 3 rider –If withdrawals started prior to death If Single Life elected, the rider terminates If Joint Life elected, For Life payments continue as long as the spouse is the covered life Note: For Life will remain at the same Joint Life withdrawal benefit payment percentage set at the time of first withdrawal. –If withdrawals did NOT start prior to death Spouse can continue the For Life with the Single Life option Principal Income Builder 3 For financial professional use only. Not for distribution to the public. Spousal Continuation

30. At death of the owner (or first owner — if joint owners) –Non-Spouse beneficiary can take the death benefit Principal Income Builder 10 For financial professional use only. Not for distribution to the public. What happens at death?

31. Spousal Continuation with the Income Builder 10 rider –If withdrawals started prior to death If Single Life elected, the rider terminates If Joint Life elected, For Life continue as long as the spouse is the covered life Note: For Life will remain at the same Joint Life withdrawal benefit payment percentage set at the time of first withdrawal. –If withdrawals did NOT start prior to death Spouse can continue the For Life with the Single Life option Principal Income Builder 10 For financial professional use only. Not for distribution to the public. Spousal Continuation

32. Required Minimum Distributions (RMD) Program –Withdrawals taken to satisfy RMD, will not be treated as excess withdrawals as long as the RMD Program for GMWB Riders guidelines are followed Terminations –The PIB 3 or PIB 10 rider may be terminated after five contract years at the owner’s request –The PIB 3 or PIB 10 will “automatically” terminate with a change of ownership –The PIB 3 or PIB 10 will terminate if the contract terminates RMD Program and Terminations For financial professional use only. Not for distribution to the public.

33. Provides a tax deferred savings option for nonqualified money Provides a long-term savings plan Provides guaranteed income for life Assures continuing income for spouses Growth potential Provides a guaranteed death benefit for beneficiaries Death benefit passes outside of probate Why Variable Annuities? For financial professional use only. Not for distribution to the public.

34. Guarantees are based on the claims paying ability of Principal Life Insurance Company. The subject matter in this communication is provided with the understanding that The Principal ® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax or accounting obligations and requirements. Principal Investment Plus Variable Annuity SM is issued by Principal Life Insurance Company and distributed through Principal Securities, Inc., 800-247-1737, member SIPC and/or independent broker/dealers. Securities sold by a Principal Securities Registered Representative are offered through Principal Securities. Principal Life and Principal Securities are members of the Principal Financial Group ®, Des Moines, IA 50392. 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 ®. PD854-07 | © 2016 Principal Financial Services, Inc. | t15102603au | 06/2016 For financial professional use only. Not for distribution to the public.