The Principal Financial Group Introduces A Powerful Tool For Retirees

The Principal Financial Group Introduces A Powerful Tool For Retirees - Investment Protection

    Business Editors

    DES MOINES, Iowa--(BUSINESS WIRE)--April 5, 2005--

New option gives retirees control and opportunity for growth
    The average 65 year old retiring today has a 50 percent chance of living to age 85 or beyond(1). As a result, many retirees aren't able to rely solely on the safe returns of traditional fixed-income investments and certificates of deposit to fund their longer retirements. The Principal Financial Group(R), the nation's 401(k) leader and total retirement solutions innovator, introduces a new tool that allows retirees to spend more time investing in the market without risking their principal.
    The Investment Protector Plus, an optional rider of the new Principal Investment Plus Variable Annuity(SM), offers investors the opportunity for investment growth through "subaccounts" that invest in underlying mutual funds--but without the risk of losing the principal amount invested in the annuity. The rider guarantees investors will get back at least 100 percent of their amount invested, through withdrawals, no matter how their investment accounts perform.
    "This product gives retirees flexibility," said Melissa Crew, director, Annuity Product Development, The Principal(R). "They can withdraw up to 5 percent of their investment each year for life or 7 percent each year for about 14 years."
    The Investment Protector Plus rider also increases investors' guaranteed withdrawal benefit by 5 percent for each year they don't take withdrawals during the first five years of their contract - increasing their guaranteed withdrawal amount up to 125 percent of the principal invested. In addition, investors can "step-up" their withdrawal amount every five years to take advantage of favorable market conditions.
    "Unlike traditional annuitization, retirees don't have to give up control over their investments or their income payments with the Investment Protector Plus rider," said Crew. "They get upside market potential with downside market protection."

    About the Principal Financial Group

    The Principal Financial Group(R) (The Principal (R))(2) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $168.7 billion in assets under management(3) and serves some 14.9 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

    Before investing in a variable annuity, investors should carefully consider the investment objectives, risks, charges and expenses of the contract and the underlying investment options. This and other information is contained in the free prospectus, which can be obtained from your local representative. Please read the prospectus carefully before investing.

    Contract rider description is not intended to cover all restrictions, conditions or limitations. Refer to rider for full details. Rider subject to state availability and is subject to an additional charge. Payout options (including income for life), death benefit guarantees, and the guaranteed fixed interest account are subject to the claims-paying ability of Principal Life Insurance Company. Values in the subaccounts are not guaranteed and will vary from day to day. If you are purchasing an annuity to fund a tax-qualified retirement plan (IRA, SEP, SIMPLE IRA), you should be aware that this tax deferral feature is available with any investment vehicle and is not unique to an annuity. Carefully consider the features and benefits of the annuity in making the decision to purchase it. Certificates of deposit are FDIC insured while annuities are not FDIC insured but are backed by the issuing insurance company.

    The Principal Investment Plus Variable Annuity is issued by Principal Life Insurance Company and distributed by Princor Financial Services Corporation, 800/247-4123, member SIPC. Principal Life and Princor(R) are members of the Principal Financial Group(R), Des Moines, IA 50392.

    Contract form SF749; Rider form SF 753

    #189932007

    (1) Annuity 2000 Mortality Table

    (2) "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

    (3) As of December 31, 2004

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CONTACT: Principal Financial Group, Des Moines Terri Shell, 515-283-8858 shell.terri@principal.com or Susan Houser, 515-248-2268 houser.susan@principal.com

KEYWORD: IOWA INDUSTRY KEYWORD: INSURANCE BANKING CONSUMER/HOUSEHOLD PRODUCT SOURCE: Principal Financial Group

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