Principal Lifetime Income Solutions II

Guarantees are better than hope

Your clients hope they’ve saved enough for retirement.  You can do better than that.  If your clients plan on funding retirement with their investment accounts – what will they do when their account value declines.

Markets go up and down – so losing investment value is a reality for most of us. But it’s harder to deal with in retirement. And without a source of guaranteed income this could affect how much your clients can spend.

Do you want to tell them to adjust their retirement dreams?

Providing a source of guaranteed income, like that provided by Principal Lifetime Income Solutions II Variable Annuity (PLIS II), can help insure you won’t have to do that.

70% of respondents to a recent survey think their advisor has a responsibility to discuss guaranteed income options with them.1

The benefits of PLIS II

PLIS II is designed to help secure your client’s future by providing a source of guaranteed income in retirement. It also gives your clients:

  • The potential to keep pace with inflation by keeping money invested in the market
  • Tax-deferred growth
  • Access to their money through scheduled or unscheduled withdrawals
  • Guaranteed income for life with any of our GMWB riders
  • Income growth potential through our bonus and step-up features
  • Guaranteed death benefit to leave a legacy to beneficiary(ies)

Let’s talk about our variable annuity solutions!

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Got questions? We’ve got answers.

Guaranteed income – three different ways

PLIS II offers three different guaranteed minimum withdrawal benefit (GMWB) riders. The right one for your client might depend on whether they need income now, or if they plan to wait a few years. Our riders offer different levels of bonus income, step-ups, and guaranteed payout rates – but all of them guarantee income for life. Here’s a quick comparison of what our different riders offer.

Every client is unique and finding the right fit means knowing what their goals are. This chart can help you ask the right questions.

“One of the best things about an annuity is that you know your basic expenses are always going to be covered. Less worry. Less stress. We don’t want to be stressed every month at this point in our life.”

Bonus and step-up feature

All of our GMWB riders provide the opportunity for your clients’ money to grow tax-deferred until they take their first withdrawal. They also offer an annual step-up that locks in annual market gains for your clients. And two of our riders offer an annual bonus for each year they don’t take a withdrawal.

The bonus is available with the Target Income Protector and Flexible Income Protector Plus riders.

The annual step-up is available with all our riders.

If clients are within the bonus period, a bonus is added to their withdrawal benefit base for each year they don't take a withdrawal.1 The bonus is not added to their accumulated value. By adding it to the withdrawal benefit base, the bonus increases their future guaranteed income amount. Once they've taken a withdrawal, they're no longer eligible for the bonus.2

This automatic feature is another way to increase your client's future guaranteed income. Annual market gains, when greater than the bonus amount, are locked into the withdrawal benefit base. Clients get guaranteed income for life based on this stepped-up value. The step-up feature is available until the later of age 80 or 10 years after contract issue.

This example is hypothetical and is not meant to show actual results or predict future results. It’s intended to be educational in nature and is not intended to be taken as a recommendation. Circumstances and experience will be different than that shown.)

1 Refer to the prospectus and the applicable GMWB Charges and Percentages Prospectus Supplement for current bonus information.
2 If your client makes a withdrawal before turning age 591/2, they may pay a 10% IRS penalty tax. Withdrawals made before the contract anniversary of the year the oldest owner turns 591/2 are treated as excess withdrawals when calculating the withdrawal benefit payment they’ll receive for life.

Investment options

Your clients will be able to allocate money to a number of different subaccount investments depending on the rider they choose. Our riders are designed to offer both traditional and risk-controlled funds. The right one for your clients depends on how much risk they’re willing to take with their investment.

Target Income Protector

  • Diversified Growth Volatility Control*
  • Diversified Balanced Volatility Control*
  • Diversified Income
  • Fidelity VIP Government Money Market
  • 6 & 12 month DCA accounts

Flexible Income Protector

  • Diversified Growth
  • Diversified Balanced
  • Diversified Income
  • Diversified Growth Managed Volatility*
  • Diversified Balanced Managed Volatility*
  • Fidelity VIP Government Money Market
  • 6 & 12 month DCA accounts

Flexible Income Protector Plus

  • Diversified Growth
  • Diversified Balanced
  • Diversified Income
  • Diversified Growth Managed Volatility*
  • Diversified Balanced Managed Volatility*
  • Fidelity VIP Government Money Market
  • 6 & 12 month DCA accounts

Investment asset allocation

PVC Bond

Market

Index Fund

PVC Large

Cap S&P 500

Index

Account

PFI MidCap

S&P 400

Index Fund

PFI SmallCap

S&P 600

Index Fund

PFI

International

Equity Index

Fund

Volatility

Control

Overlay

Traditional diversified funds

These are composed of indexed funds that utilize a lower cost fund of funds investment strategy. They have a pre-determined allocation that are rebalanced monthly to the original allocation. Traditional diversified funds are designed to be cost effective and easy to understand investment options.

Diversified

Income

35% equity

65% fixed income

Diversified

Balanced

50% equity

50% fixed income

Diversified

Growth

65% equity

35% fixed income

Managed volatility diversified funds

These funds seek to act as a shock absorber during periods of high market volatility. They are sub-advised by Spectrum Asset Management using a proprietary method to predict and manage market volatility. Managed volatility diversified funds employ some active management techniques.

Diversified Balanced

Managed Volatility*

50% equity

50% fixed income

Diversified Growth

Managed Volatility*

65% equity

35% fixed income

*These funds use the PVC LargeCap S&P 500 Managed Volatility Index Account

Volatility control diversified funds

These funds are sub-advised by Principal Global Equities and use a pre-determined rules-based approach to react to market volatility. Volatility control diversified funds utilize a 100% reactive strategy

Diversified Balanced

Managed Control

50% equity

50% fixed income

Diversified Growth

Volatility Control

65% equity

35% fixed income

Additional volatility protection

Our riders are designed to offer both traditional and risk-controlled funds. Risk controlled funds use investment strategies designed to offer protection from the ups and downs of the market. Ours are based on our traditional Diversified funds. They don’t eliminate risk for losses but seek to manage equity exposure based on market volatility.

For registered representative use only. Not for distribution to the public.

Guarantees are based on the claims-paying ability of Principal Life Insurance Company.

Tax-qualified retirement arrangements, such as IRAs, SEPs and SIMPLE-IRAs are tax deferred. You derive no additional benefit from the tax-deferral feature of the annuity. Consequently, an annuity should be used to fund an IRA, or other tax-qualified retirement arrangement, to benefit from the annuity's features other than tax deferral. These features may include guaranteed lifetime income, death benefits without surrender charges, guaranteed caps on fees and the ability to transfer among investment options without sales or withdrawal charges.

The Principal Pivot Series Variable Annuity is issued by Principal Life Insurance Company and distributed by Principal Securities, Inc, 800-852-4450, member SIPC and/or independent broker/dealers. Securities sold by a Principal Securities, Inc. Registered Representative are offered through Principal Securities, Inc. Principal Life and Principal Securities, Inc. are members of the Principal Financial Group, Des Moines, IA 50392.

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The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, IA 50392.

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