From Here to SecuritySM

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FinancialSecurity

While this communication may be used to promote or market a transaction or an idea that is discussed in the presentation, 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.

Before investing in variable life insurance, investors should carefully consider the investment objectives, risks, charges, and expenses of the policy 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.

Insurance products from the Principal Financial Group® (The Principal) are issued by Principal National Life Insurance Company (except in New York) and Principal Life Insurance Company. Securities offered through Princor Financial Services Corporation, 800/247-1737, member SIPC. Principal National, Principal Life and Princor® are members of The Principal, Des Moines, IA 50392.

• 401(k) Plan• Defined benefit pension plan*• Disability income insurance• Workers compensation• Life insurance • Health insurance

* “The percentage of private-sector workers participating in an employment-based defined benefit plan decreased from 38 percent in 1979 to 15 percent in 2008.”

Employee Benefits Research Institute, “The Importance of Defined Benefit Plans for Retirement Income Adequacy,” Jack VanDerhei, EBRI Notes, Vol. 32, No. 8, August 2011

Do you count on employee benefits?

• Not everyone enjoys the same level of benefits.

• They may not meet all your needs.• You may not stay in your current

job forever.• What happens to them when you retire?• They may not keep up with inflation.• They usually are not guaranteed

and could disappear.• You have little or no control over them.

Employee benefits are great, but…

• Life insurance ownership has hit a 50-year low. Three in 10 households carry no life insurance on anyone in the household, and half of households now believe they are underinsured.

• Today, 77 percent of families with children under 18 have life insurance coverage, compared with 90 percent in 2004.

• The loss of group life insurance coverage is leaving more families with children under 18 without life insurance protection than six years ago.

Household Trends in U.S. Life Insurance Ownership, 2010.

Many people are inadequately protected

Life insurance ownership has declined

Where are you on the lifeline?

“In recent years, the United States has seen an increase in life expectancy, and this trend is expected to continue. A 65-year-old man can expect to live to almost age 82, and a 65-year-old woman can expect to live to age 85.”

U.S. Department of Health and Human Services, Centers for Disease Control & Prevention, Table 22 as of 2007, 2010 Report.

Life expectancy is on the rise

Premature death causes economic disruptions

• Seven in 10 families with children under age 18 would have trouble paying their bills if their primary wage earner died unexpectedly.

• Without the safety net that life insurance can provide, the majority of households have limited time before savings run out to make financial adjustments if the family is to survive the death of a wage earner.

Household Trends in U.S. Life Insurance Ownership, 2010.

Then why is life insurancethe last thing we think about?

• Rising medical premiums?• Planning for retirement?• Saving for college funding?

Why do people buy life insurance?

The Principal Financial Well-Being Index, 2nd Quarter 2012.

• Funeral expenses 72%• Income replacement 59%• Pay off debt 56%• Pay off mortgage 53%

Why do people buy lifeinsurance?, cont.

• Single people• Young families• Middle-age couples• Retired couples• Business owners

The need is strong

Household Trends in U.S. Life Insurance Ownership, 2010.

• Many recognize they are underinsured, and one in four is considering purchasing life insurance in the next year.

• Sixty-four percent would immediately have trouble meeting daily living expenses for only a few months upon the premature death of a wage earner.

Young households

• The younger the household, the more likely it is considering purchasing life insurance in the next year.

• The presence of children under 18 in the household is the other critical indicator that a household may need coverage.

Middle-market households

Did you know? Forty-one percent of American adults (95 million) are underinsured.

Income tax features of life insurance

*If not a modified endowment contract.

• The death benefit is generally free from income tax.

• The cash value grows tax-deferred.• The cost basis (premiums paid) can

be recovered on a first-in, first-out (FIFO) basis without being subject to income tax.*

• Loans can generally be taken against the cash value without being subject to income taxation.*

Types of individual life insurance

• Term – Low-cost death benefit for a specified time period; short- to mid-term time horizon

• Universal life – Flexible premium, accumulates cash value based on fixed interest rate; mid- to long-term time horizon

• Universal life with secondary guarantees – Guaranteed death benefit at a fixed price for a specified time period up to lifetime; mid- to long-term time horizon

• Variable universal life – Flexible premium, non-guaranteed cash value from performance of underlying investment options; mid- to long-term time horizon

• Whole life – Level death benefit at a fixed price; guaranteed cash accumulation; long-term time horizon

How much life insurance do you need?

• Final expenses and cash needs• Long-term financial obligations• Living expenses• Current financial resources

The recommended amount of life insurance

coverage is 10 to 15 times annual income.

Michael, James O., “The Adequacy of Life Insurance Coverage in U.S. Households,” Journal of Financial Services Professionals.

Financial Strategies

For those seeking a comprehensive analysis, Financial Strategies assesses where you are now, where you want to go and how to best get there.

Get a handle on all aspectsof your financial picture

Which path will you choose?

From Here to SecuritySM

Not everyone wants or needs a complete analysis. Some may prefer an examination of particular needs.

For them, we offer a free From Here to Security check-up to examine their life and disability insurance needs.

• Financial goal-setting can make positive things happen.

• Our financial professionals work with you to provide information about your current situation and ideas for future solutions.

• You will work with professionals who meet your employer’s standards.

Why participate in theFrom Here to Security Program?

• Affordable options can be discussed.• Simplicity – You may be able to

address these issues during working hours.

• No fees are charged for this service.

Why participate in theFrom Here to Security Program?, cont.

Next steps

Decide what service(s) you want from us:• From Here to Security

(principal.com/lifesecure)• Financial Strategies

Sign up for a free meeting.

Begin the journey to financial security.

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