1. Income Protection for Your Employees Individual Disability Income Insurance

2. Income is the foundation of a solid financial plan THE NEED

3. Your employees’ most valuable asset Your employees’ homes may be their biggest asset, but their ability to work and earn an income is their most valuable asset. 1 Business Insider, Average Car Prices Continue to Creep Upwards, July 2011. 2 National median existing single-family sale, fourth quarter 2011, National Association of REALTORS ®. 3 Projected cumulative income of a 35-year-old earning $6,250/month, assuming a 4 percent annual increase to age 65. HOME $166,200 2 CAR $33,000 1 INCOME $4,216,000 3 THE NEED

4. Your employees’ earning potential to age 65 THE NEED Annual Income AGE$50,000$75,000$100,000$150,000 30$4,516,000$6,774,000$9,032,000$13,548,000 35$3,322,000$4,983,000$6,644,000$9,966,000 40$2,386,000$3,580,000$4,773,000$7,159,000 45$1,653,000$2,480,000$3,307,000$4,960,000 50$1,079,000$1,618,000$2,158,000$3,237,000 Assuming 5% annual salary increases

5. Are you trying to recruit, reward and retain quality employees? Offer a well-rounded benefit package that protects your employees’ most valuable asset – their ability to work and earn an income. 65% of employees surveyed said good benefits encourage them to work harder and perform better. 70% said good benefits keep them working for their current employer. Source: The Principal Financial Well-Being Index SM, 3 rd quarter 2013. THE NEED

6. Disability plays no favorites THE NEED Principal Life disability insurance claims payments issued in 2012. The above is for illustrative purposes only and is not intended as an inclusive representation of all claims, or a promise to pay any specific claims.

7. Sample disability claims OccupationsIssue Age Age at DisabilityConditionAmount Accountant3744Breast cancer$204,000 Architect5659Brain cancer$120,000 Attorney2737Alcohol dependency$464,700 Business Owner3154Depression$579,115 Computer Programmer3440Neck pain$126,012 CPA4451Back disorder$456,776 Dentist2734Stroke$341,190 Engineer3949Depression$148,548 Pharmacist3539Lupus$293,082 Veterinarian4150Migraine$201,805 A sample of Individual DI insurance claims paid by Principal Life as of December 2012. The above is for illustrative purposes only and is not intended as a comprehensive representation of circumstances surrounding the claims displayed, an inclusive representation of all claims, or a promise to pay specific claims. THE NEED

8. What if an employee becomes too sick or hurt to work? Current standard of living Future earnings Their home Peace of mind Insurability Credit rating Retirement savings and other assets Replacement costs Revenue Productivity Good morale Employees can lose: You can lose: THE NEED

9. A combination disability insurance offering Working together, Group long-term disability (LTD) and Individual DI insurance can provide: Enhanced income replacement Affordable cost Individual benefit provisions to help offset risks Expanded portability options Competitive benefit offering to help attract and retain employees THE NEED

10. Group LTD insurance Benefits One master policy covers all employees, which makes it easy to administer. No medical information paperwork is required, since it’s guaranteed issue with a pre-existing condition clause. It usually only costs one-half to 1% of gross covered monthly pay.

11. Group LTD insurance Considerations Benefit provisions within the policy are typically conservative. The cap on benefits typically creates a problem for higher- paid employees. It typically limits disabilities considered self-diagnosed. Benefits and premiums can be modified at renewal. The policy is usually not portable for the employee. Bonuses and incentive pay are typically not covered.

12. Closing the gap on group LTD insurance $8,333 100% 80% 60% 40% 20% 0% Monthly Income before taxes Group LTD benefits of 60% up to a $10,000 monthly benefit cap, a $1,850 IDI benefit, and assuming a 30% tax bracket for Federal, State and FICA. Group LTD benefit + Individual DI policy Sample – Annual Gross Income: $100,000 42% income replacement 68% income replacement (post-tax) $3,500 Group LTD Benefit (after taxes) $5,833 Monthly Income after taxes $5,000 Group LTD Benefit (before taxes) $1,850 $3,500 SUPPLEMENTAL INDIVIDUAL DI INSURANCE

13. Filling the Income Replacement Gap CEOSr. VPVPManager Total annual comp (salary + bonus) $350,000$275,000$175,000$75,000 Group LTD monthly benefit $10,000$8,750$5,000$2,500 Percentage of salary replaced with LTD 34%38%34%40% Individual DI monthly benefit $11,250$8,200$6,000$2,250 Total LTD and DI monthly benefit $21,250$16,950$11,000$4,750 Percentage of salary replaced with LTD+DI 73%74%75%76% Group LTD benefits of 60% up to a $10,000 monthly benefit cap SUPPLEMENTAL INDIVIDUAL DI INSURANCE

14. Principal Life Individual DI insurance benefits Premiums guaranteed through age 65. Benefits are received tax-free (when paid with after-tax dollars). Quality benefit provisions are available. Bonuses and incentive pay can be covered. Policy and discounts are portable for the employee. Choose who pays the premiums: Employer, employee or combination INDIVIDUAL DI INSURANCE

15. Multi-life Programs and Discounts Discounts start at 20% off gender neutral rates 2 INDIVIDUAL DI INSURANCE Fully Underwritten Maximum benefit amounts available Simplified DI Multi-Life Provides benefits, up to a set maximum, with no routine medical requirements 1 Standard Issue (GSI) Policies issued to groups of 10 or more employees with no routine medical requirements Fallback GSI Maximum benefits available with the safety net of a GSI offer if an underwriting concern arises 1 - No blood, urine, exams, EKGs or APSs required, unless a significant medical condition is reported by MIB, significant medical information is derived from the TeleApp or other available information, or any other disability coverage has been issued or applied for on a non-medical basis. Applications ould be rated, ridered or declined based on all underwriting information available; this is not a guaranteed issue program. Urine/HIV test is required in Maine. Subject to Issue & Participation limits and minimum premium requirement. 2 – At least 3 participating employee lives required to qualify for a discount.

16. Sample premiums for Principal Life Individual DI insurance Assumptions: Michigan resident, To Age 65 Your Occupation and Benefit periods, 90-day Elimination Period, Residual and Recovery Benefit rider, 5A occupation class, non-tobacco.

17. In the event of a disability, you may no longer be able to: Contribute to your 401(k), IRA or other retirement savings vehicle Receive an employer match on those contributions (if available) Contribute to Social Security DI Retirement Security is designed to help replace lost retirement income in the event of a disability. Disability’s impact on retirement savings DI RETIREMENT SECURITY

18. Helping protect retirement dreams Assumptions: $2,000/month contributions beginning at age 30, 5% rate of return and age 65 retirement. Consequences of disability at age 40, without DI Retirement Security. Impact of a permanent disability on retirement savings at age 40 DI RETIREMENT SECURITY

19. How It Works INSUREDPRINCIPAL LIFE IRREVOCABLE TRUST Before a disability, DI insurance premiums are paid to Principal Life. The trust invests the benefits (after a risk assessment is conducted) At the end of the benefit period, trust assets are distributed Disability occurs, benefits are paid to an irrevocable trust For more on trust investment options: www.principal.com/bankerstrust DI RETIREMENT SECURITY

20. Protecting against the loss of a key employee Key Person Replacement insurance 1 Protects the organization from the loss of a key employee Employer pays for and is the owner of the policy Any benefits received can be used at your discretion, but cannot be assigned to the key employee Helps demonstrate financial stability to creditors, shareholders and other stakeholders 1 Not available in all states; not approved in California

21. 1.Employer pays the premium and is the owner of the policy insuring the key employee in the event of Total Disability. 2.If the key employee becomes Totally Disabled, the business receives benefits, generally tax-free. Benefits can be used at your discretion. Common uses include recruitment and training costs, temporary staffing needs and revenue replacement. 1 1 Benefits cannot be assigned to the key employee. How It Works KEY PERSON REPLACEMENT INSURANCE

22. Worksite enrollment made simple A sampling of available employee communication pieces … Principal Life can help: Set up enrollment meetings at work and create a timeline that meets your needs Explain the program to employees Provide materials to communicate coverage availability and enrollment meetings YOUR BENEFIT OFFERING

23. Underwriting made simple One of the highest standard issue rates and lowest percentages of declined applications One of the shortest underwriting turnaround times in the industry Compared to baseline industry averages, Principal Life has:* Large case underwriting offers: *Based on Principal Life industry analysis. Plus, you and your employees benefit from a team approach to underwriting Fewer requirements Less underwriting time Dedicated billing and administration teams YOUR BENEFIT OFFERING

24. Administrative services made simple Billing Processing claims Making adjustments to policy benefits Providing employees with information about keeping their policies in force if they leave your company Principal Life takes care of: YOUR BENEFIT OFFERING

25. Financial strength and integrity Has over 130 years of experience with a comprehensive product portfolio Receives high ratings from independent rating firms 1 Is a member of the FORTUNE 500 ® Principal Life Insurance Company: 1 A high rating by a particular firm does not constitute an endorsement of the rated insurer by the ratings firm. YOUR BENEFIT OFFERING

26. For more information Contact your local representative. 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 none of the member companies of The Principal are 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. DI Retirement Security is issued as a non-cancelable, guaranteed renewable, individual disability income insurance policy. It is not a pension or retirement based program or a substitute for such a program. DI Retirement Security is not available for government employees, or anyone who is over insured based on Principal Life’s current Issue and Participation Guidelines. It may not be available or the benefit amount may be reduced for certain occupation if there is existing DI coverage with lifetime benefits. Additional underwriting guidelines may apply. 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. Disability insurance has limitations and exclusions. For costs and details of coverage, contact your Principal Life financial representative. Insurance issued by Principal Life Insurance Company. Principal Life is a member of the Principal Financial Group ®, Des Moines, IA 50392. DI8537-1 | 05/2014 | © 2014 Principal Financial Services, Inc.