Principal Life Insurance Co Separate Account B
Filed: 25 Apr 08, 12:00am
COMMENT 1. | Cover Page –Please include the statement required by Item 1(a)(v)(C) of Form N-4 or explain why its inclusion is not required. | |
RESPONSE: | Registrant has revised the cover page to include the statement required by Item 1(a)(v)(C) of Form N-4. | |
COMMENT 2. | Glossary– Please consider adding a definition of “good order” and capitalize its use through out the prospectus. | |
RESPONSE: | Registrant has revised the Glossary to include a definition of “good order.” Please see page 5 of the prospectus. |
| Registrant has given serious consideration to the capitalization of defined terms. However, Registrant believes that the prospectus’ readability is enhanced by not capitalizing terms each time they are used, and that such capitalization is visually distracting to the reader and may detract from the goals of Plain English and document simplification. | ||
COMMENT 3. | Summary of Expense Information – |
| a. | General Comments– |
| i. | Please consolidate the footnotes to the tables and move the footnotes so that they follow the presentation of the Minimum and Maximum Total Annual Operating Expenses of the Underlying Mutual Funds. |
RESPONSE: | Registrant has revised the prospectus to consolidate the footnotes to the fee tables and has moved the footnotes to follow the table presentation of the Minimum and Maximum Total Annual Operating Expenses of the Underlying Mutual Funds. Please see the prospectus beginning at page 7. |
| ii. | Please alter the font size or formatting of the tables and footnotes so as to make the tables more predominant than the footnotes. |
RESPONSE: | Registrant has increased font size of the tables to 10 point font with 12 point font headings and decreased the font size of the footnotes to 8 point font. Please see the prospectus beginning at page 7. |
| iii. | Please consider adding footnote(s) to the tables cross-referencing the narrative description of the charges. |
RESPONSE: | Registrant has included a footnote to the fee tables cross-referencing the narrative description of the fees and charges. Please see the prospectus beginning at page 7. |
| b. | Periodic Expenses– In presenting charges, the charges should be annualized numbers rounded to the nearest 100th decimal place. If a quarterly charge could reflect a higher expense, then in the annualized charge reflect the worst quarterly expense and use a footnote to explain. Please revise the fee tables accordingly. Note that this also applies to the narrative discussion of the expenses in the Charges and Deductions section. |
RESPONSE | Registrant has revised the periodic expenses fee table to present charges as annualized numbers rounded to the nearest 100th decimal place. Registrant has also revised the narrative presentation of the charges to reflect annualized numbers. Please see the prospectus beginning at page 7. | |
COMMENT 4. | Examples– |
| a. | In presenting examples, the examples should reflect the maximum expenses. See Instruction 21 to Item 3 ofForm N-4, which provides that current expenses may be presented but must follow presentation of examples reflecting the maximum expenses. Please revise accordingly. |
RESPONSE: | Registrant has revised the Example so as to reflect the maximum charges allowable under the Contract. Please see page 12 of the prospectus. |
| b. | Please remove Example 1 or explain to the Staff why this disclosure is appropriate. See Instruction 21 to Item 3 of Form N-4. |
RESPONSE: | Registrant has revised the Examples section to contain only an example which reflects the maximum allowable charges under the Contract and the combination of optional riders whose cumulative expenses totaled more than any other combination of optional riders. Please see page 12 of the prospectus. | |
COMMENT 5. | Summary – Examination Offer Period (Free-Look): Please revise disclosure to indicate that Registrant will return the greater of the customer’s current accumulated value or the amount of the premium payment(s) applied during the examination offer period. | |
RESPONSE: | Registrant has revised the disclosure as requested. Please see pages 14 and 17 of the prospectus. | |
COMMENT 6. | Premium Payments – Exchange Credit: In the last statement of the fourth paragraph of this section, please state that additional charges and deductions may result if the PPC rider is elected at the exchange. | |
RESPONSE: | Registrant has revised the disclosure in this section to state that election of the PPC and other riders will increase charges. Please see page 17 of the prospectus. | |
COMMENT 7. | Accumulation Period – Value of Your Contract: In the last paragraph on page 18, please add a bullet reflecting the impact of exchange credits on the contract value. | |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 18 of the prospectus. | |
COMMENT 8. | Telephone and Internet Services |
| a. | Either in the Glossary or in the narrative, please add user-friendly definition of the “Good Order” (p. 19) as used on the page indicated. |
RESPONSE: | Registrant has revised the Glossary to include a definition of “good order.” Please see response to Comment 2. |
| b. | Please indicate whether and how contract owners will be notified should you exercise your right to modify or terminate telephone services or internet transaction procedures. |
RESPONSE: | Registrant has revised the disclosure to indicate that contract owners will be notified when reasonably feasible prior to any modification or termination of telephone services or internet transaction procedures and that, where notice is not reasonably feasible, any such modifications or terminations will be applied in a non-discriminatory manner. Please see page 20 of the prospectus. |
| c. | The last bulleted sentence under the Internet header is difficult to understand. Please clarify. |
RESPONSE: | Registrant has revised the disclosure to clarify that instructions will be effective on the next valuation day if the instructions are received by the Registrant when the Registrant is not open for business and/or after the NYSE closes its normal trading. Please see page 21 of the prospectus. | |
COMMENT 9. | Death Benefit- Please clarify the death benefit outcome by adding additional line items to the table for the following situations: (i) when the owner is the sole annuitant, (ii) when the owner is a joint annuitant, and (iii) when the owner is a natural person but not the annuitant. In the alternative, please explain to the Staff why this disclosure is not appropriate. This comment also applies to similar statements under “Rider Benefits – GMWB Riders, GMWB 1 Rider Death Provision” and “Rider Benefits – GMWB Riders, GMWB 2 Rider Death Provision”. | |
RESPONSE: | Registrant believes this disclosure is not appropriate. The Contract provides a death benefit upon the death of the owner or, if there are joint owners, upon the death of the first owner to die. The Contract provides a death benefit upon the death of an annuitant who is not an owner only if the owner is not a natural person. In such case, the death benefit is paid upon the death of the annuitant, or if there are joint annuitants, upon the death of the first annuitant to die. The death benefits provided by the GMWB Riders work in this same fashion. Registrant has added an additional introductory paragraph to the death benefit tables to clarify that the death benefit is payable upon the death of the owner. Please see page 22 of the prospectus. | |
COMMENT 10. | Rider Benefits – Premium Payment Credit Rider |
| a. | Please add a narrative description of the charge to the discussion of the rider, specifically including a discussion regarding the length of time the rider charge is imposed. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see the prospectus beginning at page 30. |
| b. | Please indicate that the tables demonstrating the hypothetical surrender value reflect the maximum charges that may be imposed. lf current charges are below the maximums, you may indicate it as well but such tables must follow disclosure of the hypothetical values based on the maximum charges. |
RESPONSE: | Registrant has revised the tables as requested to reflect the maximum charges that may be imposed. Please see page 32 of the prospectus. |
| c. | If correct, please consider changing the word “may” to “will” in the last sentence of the last paragraph of this section. If not, please expand your disclosure to describe any situation in which the surrender value of a Contract with the PPC rider would be greater than the surrender value of a Contract without the PPC rider. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 32 of the prospectus. | |
COMMENT 11. | Rider Benefits – Enhanced Death Benefit Rider: Please revise the third paragraph under this heading. The current phrase, “After the lock-in date, a. and b. are only:” is ambiguous. Specifically, clarify how the Enhanced Death Benefit amount is calculated after the lock- in date. Please consider including examples illustrating the difference between the enhanced death benefit calculations before and after the lock-in date. | |
RESPONSE: | Registrant has revised the disclosure as requested. Registrant respectfully declines to include examples as it does not believe that such examples are necessary in light of the revised disclosure. Please see page 32 of the prospectus. | |
COMMENT 12. | Rider Benefits – GMWB Riders |
| a. | General– Please consider altering the font size or formatting of the headings to make them more predominant. |
RESPONSE: | Registrant has revised the font size and style of the headings to make them more predominant. Please see the prospectus beginning at page 33. |
| b. | Introduction of the GMWB riders: |
| i. | Please revise the introduction to eliminate repetitive disclosure. |
RESPONSE: | Registrant has revised the disclosure as requested. |
| ii. | Please provide additional disclosure explaining the circumstances in which each rider would be more advantageous than the other. |
RESPONSE: | Registrant has revised the disclosure to identify instances when one GMWB rider may be more beneficial than another. Please see page 36 of the prospectus. |
| c. | GMWB Glossary |
| i. | GMWB Step-Up. This definition is difficult to understand. Please clarify. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 36 of the prospectus. |
| ii. | Rider effective date. Please delete this language or indicate the specific situations in which a “special offer” from the Registrant would arise. |
RESPONSE: | Registrant has deleted the disclosure as requested. In addition, Registrant has added disclosure to the availability and eligibility section of the GMWB riders to indicate that in the future Registrant may allow GMWB riders to be added to a Contract after issue and that any such offer will be made in a non-discriminatory manner. Please see page 36 of the prospectus. | |
| d. | Investment Protector Plus Rider (GMWB 1 Rider): |
| i. | Please revise the description of this rider as follows. Using Plain English, describe the benefits more clearly. (e.g. Consider describing the practical effect of the various calculations of benefits under the rider? How are the rider’s benefits/calculation impacted by contract value, death benefits and any other relevant contract features (such as the premium payment credit)?) Consider including examples illustrating the calculations of rider benefits within the narrative of the rider? |
RESPONSE: | Using Plain English, Registrant has revised the disclosure to more clearly describe the benefits, the impact of contract provisions on the riders’ features and the impact of the riders’ features on the contract provisions. Registrant has also revised the disclosure to broaden the descriptions of how the GMWB features vary between the riders. | |
| Registrant respectfully declines to add any such examples beyond those already included in the prospectus. Registrant believes including such examples would lengthen and complicate the disclosure in a manner that would be burdensome and distracting to the reader. However, Registrant has included additional cross-references to the Appendices, which include such examples. | ||
| ii. | Please explain the significance of the various dates cited in the narrative disclosure (i.e. March 25, 2008 is cited on page 29). |
RESPONSE: | Registrant has revised the disclosure to explain the significance of the dates cited in the narrative description of the rider. Please see page 38 of the prospectus. |
| iii. | Required Minimum Distributions under the GMWB 1Rider |
| 1. | Please indicate whether and how contract owners will be notified should they exercise their right to modify or eliminate the RMD Program for GMWB Riders. In addition, please clarify whether any such modification or elimination of the program would be: (i) applied prospectively or retroactively; and (ii) if applied mid-year, how withdrawals of program participants would be treated after implementation of the modification or elimination. |
RESPONSE: | Registrant has revised the disclosure to indicate that contract owners will receive 30 days advance notice of any modification or elimination of the RMD Program for GMWB riders and that such modification or elimination will not be effective as to that contract owner until the next contract anniversary following the date of the notification. | |
| iv. | Effect of Accumulated Value Reaching Zero under the GMWB 1 Rider: |
| 1. | Please include disclosure of whether and what types of information are provided to contract owners and when such information will be provided. |
RESPONSE: | Registrant has included the requested disclosure. Please see page 39 of the prospectus. |
| 2. | Please provide additional disclosure explaining the circumstances in which each withdrawal benefit option would be more advantageous than the other. |
RESPONSE: | Registrant has included the requested disclosure. Please see page 39 of the prospectus. |
| v. | Effect of Reaching the Annuitization Date under the GMWB 1 Rider: |
| 1. | Please include disclosure of what types of information are provided to contract owners and when such information will be provided relative to the annuitization date. |
RESPONSE: | Registrant has included such disclosure as requested. Please see page 40 of the prospectus. |
| 2. | Please provide additional disclosure explaining the circumstances in which each withdrawal benefit option would be more advantageous than the other. |
RESPONSE: | Registrant has included the requested disclosure. Please see page 40 of the prospectus. |
| vi. | GMWB 1 Step-Up |
| 1. | Please provide additional disclosure comparing and contrasting the GMWB Step-Up before and after the date cited so that the reader may distinguish between the provisions. |
RESPONSE: | Registrant has revised the disclosure to clearly indicate the differences in the GMWB Step-Up for the GMWB 1 Rider before and after the date cited. Please see the prospectus beginning at page 40. |
| vii. | Investment Options under the GMWB 1 Rider: |
| 1. | Please explain to the staff the basis upon which the Registrant can vary the GMWB model options and/or allocation percentages within those model portfolios. Also, please explain how those changes will be implemented. |
RESPONSE: | The proposed changes to the GMWB investment options were intended to go into effect as of May 19, 2008. However, after consultation with the Staff regarding the changes, Registrant has determined not to make any changes to the GMWB investment options at this time and has removed any changes to the GMWB investment options from the prospectus. Please note that there is a format change in the presentation of the GMWB Self-Build and GMWB Select Models in Appendix D. The categories have been re-named and a new category has been added to better reflect the investment goals of each category. This format change is one of style, not substance. It does not effect any change in the investment options under a model or the percentage allocations that may be made to them. |
| 2. | Please describe, in greater detail, the role of Principal Financial Advisors, Inc. |
RESPONSE: | Registrant has deleted the reference to Principal Financial Advisors, Inc. because it is continuing to review the process it will follow if it should decide to revise GMWB investment options in the future. Please see the response immediately preceding this response. |
| 3. | Please delete the reference to Appendix E. |
RESPONSE: | Registrant has removed the reference to Appendix E. |
| viii. | GMWB 1 Rider Death Provision: Please clarify the death benefit outcome by adding additional line items to the table for the following situations: (i) when the owner is the sole annuitant, (ii) when the owner is a joint annuitant, and (iii) when the owner is a natural person but not the annuitant. In the alternative, please explain to the Staff why this disclosure is not appropriate. |
RESPONSE: | Please see the response to Comment 9. |
| e. | Investment Protector Plus 2 Rider (GMWB 2 Rider): |
| i. | Please revise the descriptions of this rider in the same manner as requested for the Investment Protector Plus Rider (GMWB 1 Rider). | ||
| ii. | For each feature of the GMWB 2 Rider, please expand the disclosure to describe how the feature differs from the same or similar feature of the GMWB 1 rider. The information provided should allow the reader to distinguish between the benefits each rider provides. You may include examples illustrating these differences and comparing the effect of the riders. | ||
| iii. | Please consider adding cross-reference(s) to the Comparison of the GMWB 1 Rider and the GMWB 2 Rider. |
RESPONSE: | Registrant has revised the GMWB 2 disclosure to focus on the features that are different from GMWB 1. The revision incorporates responses to these comments. Please see the prospectus beginning at page 43. | |
COMMENT 13. | Charges and Deductions |
| a. | Please consider moving the narrative presentation of the charges and deductions closer to the presentation of the Summary of Expense Information |
RESPONSE: | Registrant has moved the disclosure as requested. The Charges and Deductions section now follows presentation of the Contracts feature and precedes presentation of optional riders available under the Contract. Please see the prospectus beginning at page 26. |
| b. | Please consider re-ordering the narrative presentation of charges and deductions to correspond with the presentation of charges and deductions set forth in the Summary of Expense Information. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see the prospectus beginning at page 26. |
| c. | Please consider adding cross-reference(s) to the Summary of Expense Information presentation of the charges and deductions. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 26 of the prospectus. |
| d. | In presenting charges, the charges should be annualized numbers rounded to the nearest 100th decimal place. If a quarterly charge could reflect a higher expense, |
| then in the annualized charge reflect the worst quarterly expense and use a footnote to explain. Note that this also applies to the presentation of the charges and deductions in the fee tables. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see the prospectus beginning at page 26. | |
COMMENT 14. | Reinstatement– The note under this header is confusing. If correct, please state that reinstatement is only available for surrenders of the entire Contract and that any payments received from contract holders after a partial surrender or annuitization will be deemed new premium payments. | |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 54 of the prospectus. | |
COMMENT 15. | Registration Statement |
| a. | Please update the Commission telephone number listed to 202-551-8090 and update the address for the SEC Public Reference Room to 100 F Street NE, Washington, D.C. 20549-0102. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 69 of the prospectus. |
| b. | Please include the registration number for the Contract under the ’33 Act and ’40 Act. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 60 of the prospectus. | |
COMMENT 16. | Statement of Additional Information |
| a. | Independent Registered Accounting Firm: please include the full mailing address for Ernst & Young. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see page 3 of the SAI. |
| b. | Calculation of Performance Data- Please clarify that the Calculation of Performance Data complies with the requirements of Item 21 ofForm N-4. In particular, if non-standardized performance quotations are used please include standardized quotations. SeeItem 21(b) and the instructions thereto. In addition, please explain to the Staff the Registrant’s basis for presenting yields for divisions other than money-market funded divisions. |
RESPONSE: | The Calculation of Performance Data complies with the requirements of Item 21 of Form N-4. Registrant has deleted the paragraph discussing yields for |
| divisions other than money-market funded divisions. Please see the SAI beginning at page 3. |
COMMENT 17. | Part C |
| a. | Item 24: Please file as exhibits any material agreements required pursuant to Item 24(b)(8). |
RESPONSE: | Registrant confirms that any such exhibits will be filed with its Rule 485(b) post-effective amendment to be effective on May 1, 2008. | |
| b. | Item 26: Please “indicate with appropriate symbols subsidiaries that file separate financial statements, subsidiaries included in consolidated financial statements or unconsolidated subsidiaries included in group financial statements. Indicate for other subsidiaries why financial statements are not filed.” See Item 26 ofForm N-4. |
RESPONSE: | Registrant has revised the disclosure as requested. Please see Part C beginning at page 4. |
| REGISTRATION UNDER THE SECURITIES ACT OF 1933 | þ | |
Pre-Effective Amendment No. | o | |
| Post-Effective Amendment No. 8 | þ | |
| REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | o | |
Amendment No. | o |
| NOTE: | We recapture the premium payment credit if you return the Contract during the examination offer period or request full annuitization of the Contract prior to the third contract anniversary. You take the risk that the recaptured amount may exceed the then current value of the credit(s). This risk occurs when your investment options have experienced negative investment performance (i.e., have lost value) since the credit was applied. In that situation, you would be worse off than if you had not purchased the credit option. |
| • | AIM V.I. Basic Value Fund | |
| • | AIM V.I. International Growth Fund | |
| • | AIM V.I. Small Cap Equity Fund |
| • | AllianceBernstein Small Cap Growth Portfolio |
| • | Inflation Protection Fund |
| • | Ultra Fund – Class II | |
| • | Vista Fund – Class I |
| • | Technology Growth Portfolio |
| • | Contrafund® Portfolio | |
| • | Equity-Income Portfolio | |
| • | Growth Portfolio | |
| • | Mid Cap Portfolio | |
| • | Overseas Portfolio |
| • | Structured Small Cap Equity Fund | |
| • | MidCap Value Fund |
| • | Lehman Brothers High Income Bond Portfolio |
| • | Fasciano Portfolio – S Class | |
| • | Partners Portfolio – I Class | |
| • | Socially Responsive Portfolio – I Class |
| • | Asset Allocation Account | |
| • | Bond & Mortgage Securities Account(3) | |
| • | Diversified International Account | |
| • | Equity Income Account(4) | |
| • | Government & High Quality Bond Account |
| • | International Emerging Markets Account | |
| • | International SmallCap Account | |
| • | LargeCap Blend II Account(5) | |
| • | LargeCap Growth Account(6) | |
| • | LargeCap Growth I Account(7) | |
| • | LargeCap S&P 500 Index Account(8) | |
| • | LargeCap Value Account(9) | |
| • | LargeCap Value II Account(10) | |
| • | LargeCap Value III Account(11) | |
| • | MidCap Blend Account(12) | |
| • | MidCap Growth I Account(13) | |
| • | MidCap Value II Account(14) | |
| • | Money Market Account | |
| • | Principal LifeTime 2010 Account | |
| • | Principal LifeTime 2020 Account | |
| • | Principal LifeTime 2030 Account | |
| • | Principal LifeTime 2040 Account | |
| • | Principal LifeTime 2050 Account | |
| • | Principal LifeTime Strategic Income Account | |
| • | Real Estate Securities Account | |
| • | Short-Term Bond Account | |
| • | SmallCap Growth II Account (15) | |
| • | SmallCap Value I Account (16) | |
| • | Strategic Asset Management Balanced Account Portfolio | |
| • | Strategic Asset Management Conservative Balanced Portfolio | |
| • | Strategic Asset Management Conservative Growth Portfolio | |
| • | Strategic Asset Management Flexible Income Portfolio | |
| • | Strategic Asset Management Strategic Growth Portfolio | |
| • | West Cost Equity Account |
| • | T.Rowe Price Blue Chip Growth Portfolio – II | |
| • | T.Rowe Price Health Sciences Portfolio – II |
| (1) | If you elect a GMWB rider, your investment options for premium payments and accumulated value will be restricted (for restrictions seeOPTIONAL RIDER BENEFITS — GMWB Riders). | |
| (2) | Effective May 17, 2008, Principal Variable Contracts Fund, Inc. changed its name to Principal Variable Contracts Funds, Inc. | |
| (3) | Effective May 17, 2008, the Bond Account changed its name to Bond & Mortgage Securities Account. | |
| (4) | Effective May 17, 2008, the Equity Income I Account changed its name to Equity Income Account. | |
| (5) | Effective May 17, 2008, the LargeCap Blend Account changed its name to LargeCap Blend II Account. | |
| (6) | Effective May 17, 2008, the Growth Account changed its name to LargeCap Growth Account. | |
| (7) | Effective May 17, 2008, the Equity Growth Account changed its name to LargeCap Growth I Account. | |
| (8) | Effective May 17, 2008, the LargeCap Stock Index Account changed its name to LargeCap S&P 500 Index Account. | |
| (9) | Effective May 17, 2008, the Capital Value Account changed its name to LargeCap Value Account. | |
| (10) | Effective May 17, 2008, the Equity Value Account changed its name to LargeCap Value II Account. | |
| (11) | Effective May 17, 2008, the LargeCap Value Account changed its name to LargeCap Value III Account. | |
| (12) | Effective May 17, 2008, the MidCap Account changed its name to MidCap Blend I Account. | |
| (13) | Effective May 17, 2008, the MidCap Growth Account changed its name to MidCap Growth I Account. | |
| (14) | Effective May 17, 2008, the MidCap Value Account changed its name to MidCap Value II Account. | |
| (15) | Effective May 17, 2008, the SmallCap Growth Account changed its name to SmallCap Growth II Account. | |
| (16) | Effective May 17, 2008, the SmallCap Value Account changed its name to SmallCap Value I Account. |
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5
6
| Sales charge imposed on premium payments (as a percentage of premium payments) | • None | |
Maximum deferred surrender charge for Contracts without the Premium Payment Credit Rider (as a percentage of amount surrendered)(2) | • 6% | |
Maximum deferred surrender charge for Contracts with the Premium Payment Credit Rider (as a percentage of amount surrendered)(3) | • 8% | |
| Transaction Fees for each unscheduled partial surrender | ||
• guaranteed maximum | • the lesser of $25 or 2% of each unscheduled partial surrender after the 12th unscheduled partial surrender in a contract year | |
• current | • 0 | |
Transaction Fee(4) for each unscheduled transfer | ||
• guaranteed maximum | • the lesser of $30 or 2% of each unscheduled transfer after the first unscheduled transfer in a contract year | |
• current | • 0 | |
| State Premium Taxes (vary by state) | ||
• guaranteed maximum | • 3.5% of premiums paid | |
• current | • 0 |
| Annual Fee (waived for Contracts with accumulated value of $30,000 or more) | • the lesser of $30 or 2.00% of the accumulated value | |||
| Separate Account Annual Expenses (as a percentage of average daily separate account accumulated value) | ||||
• maximum | ||||
| Mortality and Expense Risks Charge | 1.25 | % | ||
| Administration Charge | 0.15 | % | ||
| Total Separate Account Annual Expense | 1.40 | % | ||
• current | ||||
| Mortality and Expense Risks Charge | 1.25 | % | ||
| Administration Charge | 0.00 | % | ||
| Total Separate Account Annual Expense | 1.25 | % | ||
| • | maximum | • | an annual charge of 0.60% of the average daily accumulated value in the Separate Account divisions, deducted daily, plus a reduction of up to 0.60% of the Fixed Account interest rate | |||
| • | current | • | an annual charge of 0.60% of the average daily accumulated value in the divisions, deducted daily (with no reduction of the Fixed Account interest rate) |
7
| Enhanced Death Benefit Rider(as a percentage of average quarterly accumulated value) | ||||
• maximum annual charge | • | 0.30% | ||
• current annual charge | • | 0.25% | ||
GMWB 1 Rider (as a percentage of average quarterly Investment Back remaining withdrawal benefit base(6)) | ||||
• Maximum annual charge | • | 0.85% | ||
• Current annual charge | • | 0.60% | ||
GMWB 2-SL Rider (as a percentage of average quarterly Investment Back withdrawal benefit base(7)) | ||||
• Maximum annual charge | • | 1.00% | ||
• Current annual charge | • | 0.75% | ||
GMWB 2 -SL/JL Rider (as a percentage of average quarterly Investment Back withdrawal benefit base(7)) | ||||
• Maximum annual charge | • | 1.00% | ||
• Current annual charge | • | 0.75% |
| Minimum and Maximum Annual Underlying | ||||||||
| Mutual Fund Operating Expenses as of | ||||||||
| December 31, 2007 | Minimum | Maximum | ||||||
| Total annual underlying mutual fund operating expenses (expenses that are deducted from underlying mutual fund assets, including management fees, distribution and/or service (12b-1) fees and other expenses) | 0.26 | % | 1.42 | % | ||||
| (1) | For additional information about the fees and expenses described in the table, seeCHARGES AND DEDUCTIONS. | |
| (2) | Surrender charge without the Premium Payment Credit Rider (as a percentage of amounts surrendered): |
| Table of surrender charges without the Premium Payment Credit Rider | ||
| Number of completed contract years since | Surrender charge applied to all premium | |
| each premium payment was made | payments received in that contract year | |
| 0 (year of premium payment) | 6% | |
| 1 | 6% | |
| 2 | 6% | |
| 3 | 5% | |
| 4 | 4% | |
| 5 | 3% | |
| 6 | 2% | |
| 7 and later | 0% | |
| (3) | Surrender charge with the Premium Payment Credit Rider (as a percentage of amounts surrendered): |
8
| Table of surrender charges with the Premium Payment Credit Rider | ||
| Number of completed contract years since | Surrender charge applied to all premium | |
| each premium payment was made | payments received in that contract year | |
| 0 (year of premium payment) | 8% | |
| 1 | 8% | |
| 2 | 7% | |
| 3 | 6% | |
| 4 | 5% | |
| 5 | 4% | |
| 6 | 3% | |
| 7 | 2% | |
| 8 | 1% | |
| 9 and later | 0% | |
| (4) | Please note that in addition to the fees shown, the Separate Account and/or sponsors of the underlying mutual funds may adopt requirements pursuant to rules and/or regulations adopted by federal and/or state regulators which require us to collect additional transfer fees and/or impose restrictions on transfers. |
| (5) | Not all riders are available in all states or through all broker dealers and may be subject to additional restrictions. Some rider provisions may vary from state to state. | |
| (6) | The GMWB 1 rider charge is taken quarterly at a maximum of 0.2125% (0.15% current charge) of the average quarterly Investment Back remaining withdrawal benefit base. The Investment Back remaining withdrawal benefit base is the amount available for future withdrawal benefit payments (seeRIDER BENEFITS — GMWB Riders, Investment Protector Plus Rider). | |
| (7) | The GMWB 2-SL and the GMWB 2-SL/JL rider charges are taken quarterly at a maximum of 0.25% (0.1875% current charge) of the average quarterly Investment Back withdrawal benefit base. The Investment Back withdrawal benefit base is the amount on which the withdrawal benefit payment is based and is calculated on each Contract anniversary (seeRIDER BENEFITS - GMWB Riders, Investment Protector Plus 2 Rider). |
| Acquired | ||||||||||||||||||||||||
| Fund | ||||||||||||||||||||||||
| (“Underlying | ||||||||||||||||||||||||
| Fund”) | ||||||||||||||||||||||||
| Management | 12b-1 | Other | Fees and | Total Gross | Contractual | |||||||||||||||||||
| Underlying Mutual Funds | Fees | Fees1 | Expenses | Expenses | Expenses2 | Net Expenses | ||||||||||||||||||
| AIM V.I. Basic Value Fund — Series I Shares | 0.67%3 | N/A | 0.29 | % | 0.00 | % | 0.96%4 | 0.96 | % | |||||||||||||||
| AIM V.I. International Growth Fund — Series I Shares | 0.71 | N/A | 0.36 | 0.01 | 1.08 | 4 | 1.07 | |||||||||||||||||
AIM V.I. Small Cap Equity Fund5- Series I Shares | 0.75 | N/A | 0.37 | 0.01 | 1.136 | 1.13 | ||||||||||||||||||
| AllianceBernstein VPS Small Cap Growth Portfolio — Class A | 0.75 | N/A | 0.45 | 1.20 | 1.20 | |||||||||||||||||||
| American Century VP Inflation Protection Fund — Class II | 0.49 | 0.25 | % | 0.01 | N/A | 0.75 | ||||||||||||||||||
| American Century VP Ultra Fund — Class II | 0.9 | 0.25 | 1.15 | |||||||||||||||||||||
| American Century VP Vista Fund — Class I | 1.00 | 1.00 | ||||||||||||||||||||||
| Dreyfus IP Technology Growth Portfolio — Service Shares | 0.75 | 0.25 | 0.09 | 0.01 | 1.10 | |||||||||||||||||||
| Fidelity VIP II Contrafund Portfolio — Service Class 2 | 0.56 | 0.25 | 0.09 | 0.907 | 0.89 | |||||||||||||||||||
| Fidelity VIP Equity-Income Portfolio — Service Class 2 | 0.46 | 0.25 | 0.09 | 0.80 | 0.80 | |||||||||||||||||||
| Fidelity VIP Growth Portfolio — Service Class 2 | 0.56 | 0.25 | 0.09 | 0.90 | 7 | 0.89 | ||||||||||||||||||
| Fidelity VIP Mid Cap Portfolio — Service Class 2 | 0.56 | 0.25 | 0.10 | 0.91 | 7 | 0.90 | ||||||||||||||||||
| Fidelity VIP Overseas Portfolio — Service Class 2 | 0.71 | 0.25 | 0.14 | 1.10 | 7 | 1.07 | ||||||||||||||||||
| Goldman Sachs VIT Structured Small Cap Equity Fund - Institutional Class | 0.738 | N/A | 0.19 | 0.92 | ||||||||||||||||||||
| Goldman Sachs VIT Structured Mid Cap Value Fund — Institutional Class | 0.8 | 8 | N/A | 0.07 | 0.87 | 0.80 | ||||||||||||||||||
Lehman Brothers High Income Bond Portfolio9 — S Class | 0.78 | 10 | 0.25 | 1.24 | 2.27 | 1.12 | ||||||||||||||||||
| Neuberger Berman AMT Fasciano Portfolio — S Class | 1.15 | 10 | .25 | 0.49 | 1.89 | 1.42 | ||||||||||||||||||
| Neuberger Berman AMT Partners Portfolio — I Class | 0.83 | NA | 0..08 | 0.91 | 1.42 | |||||||||||||||||||
| Neuberger Berman AMT Socially Responsive Portfolio — Class I | 0.84 | 10 | N/A | 0.08 | 0.92 | 0.92 | ||||||||||||||||||
| Principal VCF Asset Allocation Account — Class 1 | 0.80 | N/A | 0.02 | 0.03 | 0.85 | |||||||||||||||||||
| Principal VCF Bond & Mortgage Securities Account — Class 1 | 0.41 | N/A | 0.01 | 0.42 | ||||||||||||||||||||
| Principal VCF Diversified International Account — Class 1 | 0.81 | N/A | 0.09 | 0.90 | ||||||||||||||||||||
| Principal VCF Equity Income Account — Class 1 | 0.49 | N/A | 0.49 | |||||||||||||||||||||
| Principal VCF Government & High Quality Bond Account — Class 1 | 0.45 | N/A | 0.00 | 0.45 | ||||||||||||||||||||
9
| Acquired | ||||||||||||||||||||||||
| Fund | ||||||||||||||||||||||||
| (“Underlying | ||||||||||||||||||||||||
| Fund”) | ||||||||||||||||||||||||
| Management | 12b-1 | Other | Fees and | Total Gross | Contractual | |||||||||||||||||||
| Underlying Mutual Funds | Fees | Fees1 | Expenses | Expenses | Expenses2 | Net Expenses | ||||||||||||||||||
| Principal VCF International Emerging Markets — Class 1 | 1.25 | N/A | 0.16 | 1.41 | ||||||||||||||||||||
| Principal VCF International SmallCap Account — Class 1 | 1.17 | N/A | 0.09 | 1.26 | ||||||||||||||||||||
| Principal VCF LargeCap Blend II Account — Class 1 | 0.74 | N/A | 0.74 | |||||||||||||||||||||
| Principal VCF LargeCap Growth Account — Class 1 | 0.68 | N/A | 0.00 | 0.68 | ||||||||||||||||||||
| Principal VCF LargeCap Growth I Account — Class 1 | 0.75 | N/A | 0.00 | 0.75 | ||||||||||||||||||||
| Principal VCF LargeCap S&P 500 Index Account — Class 1 | 0.25 | N/A | 0.01 | 0.26 | ||||||||||||||||||||
| Principal VCF LargeCap Value Account - Class 1 | 0.59 | N/A | 0.01 | 0.60 | ||||||||||||||||||||
| Principal VCF LargeCap Value II Account — Class 1 | 0.85 | N/A | 0.06 | 0.91 | ||||||||||||||||||||
| Principal VCF LargeCap Value III Account — Class 1 | 0.75 | N/A | 0.75 | |||||||||||||||||||||
| Principal VCF MidCap Blend Account — Class 1 | 0.55 | N/A | 0.01 | 0.56 | ||||||||||||||||||||
| Principal VCF MidCap Growth I Account — Class 1 | 0.90 | N/A | 0.01 | 0.91 | ||||||||||||||||||||
| Principal VCF MidCap Value II Account — Class 1 | 1.05 | N/A | 0.01 | 1.06 | ||||||||||||||||||||
| Principal VCF Money Market Account — Class 1 | 0.46 | N/A | 0.01 | 0.47 | ||||||||||||||||||||
| Principal VCF Principal LifeTime 2010 Account — Class 1 | 0.12 | N/A | 0.01 | 0.63 | 0.76 | |||||||||||||||||||
| Principal VCF Principal LifeTime 2020 Account — Class 1 | 0.12 | N/A | 0.68 | 0.80 | ||||||||||||||||||||
| Principal VCF Principal LifeTime 2030 Account — Class 1 | 0.12 | N/A | 0.01 | 0.71 | 0.84 | |||||||||||||||||||
| Principal VCF Principal LifeTime 2040 Account — Class 1 | 0.1211 | N/A | 0.01 | 0.74 | 0.87 | |||||||||||||||||||
| Principal VCF Principal LifeTime 2050 Account — Class 1 | 0.1212 | N/A | 0.01 | 0.76 | 0.89 | 0.88 | ||||||||||||||||||
| Principal VCF Principal LifeTime Strategic Income Account - Class 1 | 0.1213 | N/A | 0.01 | 0.52 | 0.65 | |||||||||||||||||||
| Principal VCF Real Estate Securities Account — Class 1 | 0.85 | N/A | 0.01 | 0.86 | ||||||||||||||||||||
| Principal VCF Short-Term Bond Account — Class 1 | 0.49 | N/A | 0.49 | |||||||||||||||||||||
| Principal VCF SmallCap Growth II Account — Class 1 | 0.99 | N/A | 0.02 | 1.01 | ||||||||||||||||||||
| Principal VCF SmallCap Value I Account — Class 1 | 1.0714 | N/A | 0.02 | 0.03 | 1.12 | 1.04 | ||||||||||||||||||
| Principal VCF Strategic Asset Management Balanced Account - Class 1 | 0.23 | N/A | 0.63 | 0.86 | ||||||||||||||||||||
| Principal VCF Strategic Asset Management Conservative Balanced Portfolio — Class 1 | 0.23 | N/A | 0.01 | 0.59 | 0.83 | |||||||||||||||||||
| Principal VCF Strategic Asset Management Conservative Growth Portfolio — Class 1 | 0.23 | N/A | 0.67 | 0.90 | ||||||||||||||||||||
| Principal VCF Strategic Asset Management Flexible Income Portfolio — Class 1 | 0.23 | N/A | 0.01 | 0.54 | 0.78 | |||||||||||||||||||
| Principal VCF Strategic Asset Management Strategic Growth Portfolio — Class 1 | 0.23 | N/A | 0.01 | 0.70 | 0.94 | |||||||||||||||||||
| Principal VCF West Coast Equity Account — Class 1 | 0.62 | N/A | 0.01 | 0.63 | ||||||||||||||||||||
| T.Rowe Price Blue Chip Growth Portfolio — II | 0.85 | 0.25 | 1.10 | |||||||||||||||||||||
| T.Rowe Price Health Sciences Portfolio — II | 0.95 | 0.25 | 1.20 | |||||||||||||||||||||
| 1 | Because the 12b-1 fee is charged as an ongoing fee, over time the fee will increase the cost of your investment and may cost you more than paying other types of sales charges. | |
| 2 | The Company and Princor Financial Services Corporation may receive a portion of the underlying fund expenses for record keeping, marketing and distribution services. | |
| 3 | Effective July 1, 2007, the Board of Trustees approved a reduced contractual advisory fee schedule for the Fund. Prior to such date, the Funds’ advisor had contractually agreed to waive advisory fees to the same reduced advisory fee schedule. For AIM V.I. Basic Value Fund and AIM V.I. Large Cap Growth Fund, the maximum annual advisory fee rate ranges from 0.695% (for average net assets up to $250 million) to 0.52% (for average net assets over $10 billion). For AIM V.I Global Real Estate Fund, the maximum annual advisory fee rate ranges from 0.75% (for average net assets up to $250 million) to 0.68% (for average net assets over $10 billion). Management Fees and Fee Waiver have been restated to reflect the new fee schedule. | |
| 4 | The Fund’s advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares to the extent necessary to limit Total Annual Fund Operating Expenses of Series I shares to 1.30% of average daily net assets. The expense limitation agreement is in effect through at least April 30, 2009. | |
| 5 | AIM V.I. Small Cap Growth merged into the Fund on May 1, 2007. | |
| 6 | The Fund’s advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares to the extent necessary to limit Total Annual Fund Operating Expenses of Series I shares to 1.15% of average daily net assets. This expenses limitation agreement is in effect through at least April 30, 2009. | |
| 7 | A portion of the brokerage commissions that the fund pays may be reimbursed and used to reduce the fund’s expenses. In addition, through arrangements with the fund’s custodian, credits realized as a result of uninvested cash balances are used to reduce the fund’s custodian expenses. These offsets may be discontinued at any time. |
10
| 8 | Goldman Sachs has voluntarily agreed to waive a portion of its management fee equal to 0.02% of the Fund’s average daily net assets. The Investment Adviser has entered into a fee reduction commitment for the Funds, which was implemented on a voluntary basis prior to April 28, 2006 and on a contractual basis as of April 28, 2006, to limit the management fee annual rate to 0.68% of the average daily net assets for the first $2 billion. | |
| 9 | On May 1, 2007, Neuberger Berman AMT High Income Bond Portfolio re-branded to Lehman Brothers High Income Bond Portfolio. | |
| 10 | Neuberger Berman Management Inc. (“NBMI”) has undertaken through December 31, 2011 to waive fees and/or reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 1.10% of average daily net asset value of the Lehman Brothers High Income Bond Portfolio; 1.17% of the average daily net asset value of the Socially Responsive Portfolio; 1.40% of the average daily net asset value of the Fasciano Portfolio. The expense limitation arrangements for the Portfolios are contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause a Portfolio to exceed its limitation. | |
| 11 | Principal has contractually agreed to limit the Account’s expenses attributable to class 1 and Class 2 shares and, if necessary, pay expenses normally payable by the Account, excluding interest expense, through the period ending April 30, 2009. The expense limits will maintain a total level of operating expenses, not including underlying fund expenses, (expressed as a percent of average net assets on an annualized basis) not to exceed 0.13% for Class 1 shares. | |
| 12 | Principal has contractually agreed to limit the Account’s expenses attributable to class 1 and Class 2 shares and, if necessary, pay expenses normally payable by the Account, excluding interest expense, through the period ending April 30, 2009. The expense limits will maintain a total level of operating expenses, not including underlying fund expenses, (expressed as a percent of average net assets on an annualized basis) not to exceed 0.12% for Class 1 shares. | |
| 13 | Principal has contractually agreed to limit the Account’s expenses attributable to class 1 and Class 2 shares and, if necessary, pay expenses normally payable by the Account, excluding interest expense, through the period ending April 30, 2009. The expense limits will maintain a total level of operating expenses, not including underlying fund expenses, (expressed as a percent of average net assets on an annualized basis) not to exceed 0.14% for Class 1 shares. | |
| 14 | Principal has contractually agreed to limit the Account’s expenses attributable to class 1 and Class 2 shares and, if necessary, pay expenses normally payable by the Account, excluding interest expense, through the period ending April 30, 2009. The expense limits will maintain a total level of operating expenses, not including underlying fund expenses, (expressed as a percent of average net assets on an annualized basis) not to exceed 1.01% for Class 1 shares and 1.26% for Class 2 shares. |
11
| • | a $10,000 investment in the Contract for the time periods indicated; |
| • | a 5% return each year; |
| • | an annual contract fee of $30 (expressed as a percentage of the average accumulated value); |
| • | the minimum and maximum annual underlying mutual fund operating expenses as of December 31, 2007 (without voluntary waivers of fees by the underlying funds, if any); |
| • | the GMWB 2-SL/JL rider was added to the Contract at issue; |
| • | the Premium Payment Credit Rider was added to the Contract at issue and the Premium Payment Credit Rider surrender charge schedule is applied; and |
| • | the Enhanced Death Benefit Rider was added to the Contract at issue. |
| If you fully annuitize your contract | ||||||||||||||||||||||||||||||||||||||||||||||||
| If you surrender your contract at the | If you do not surrender your | at the end of the applicable time | ||||||||||||||||||||||||||||||||||||||||||||||
| end of the applicable time period | contract | period | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 Year | 3 Years | 5 Years | 10 Years | 1 Year | 3 Years | 5 Years | 10 Years | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||||||||||||
| Maximum Total Underlying Mutual Fund Operating Expenses (1.42%) | 1,224 | 2,974 | 2,843 | 4,655 | 460 | 1,397 | 2,355 | 4,655 | 960 | 1,897 | 2,355 | 4,655 | ||||||||||||||||||||||||||||||||||||
| Minimum Total Underlying Mutual Fund Operating Expenses (0.26%) | 1,115 | 1,748 | 2,286 | 3,575 | 341 | 1,048 | 1,786 | 3,575 | 841 | 1,548 | 1,786 | 3,575 | ||||||||||||||||||||||||||||||||||||
| • | non-qualified retirement programs; and |
| • | Individual Retirement Annuities (“IRA”), Simplified Employee Pension plans (“SEPs”) and Savings Incentive Match Plan for Employees (“SIMPLE”) IRAs adopted according to Section 408 of the Internal Revenue Code (seeFEDERAL TAX MATTERS — IRA, SEP and SIMPLE-IRA and Rollover IRAs).The Contract does not provide any additional tax deferral if you purchase it to fund an IRA or other investment vehicle that already provides tax deferral. |
| • | Initial premium payment must be $5,000 or more for non-qualified contracts. |
| • | Initial premium payment must be $2,000 for all other contracts. |
| • | Each subsequent payment must be at least $500. |
| • | If you are a member of a retirement plan covering three or more persons and payments are made through an automatic investment program, the initial and subsequent premium payments for the Contract must average at least $100 and not be less than $50. |
12
| • | A complete list of the divisions may be found inTABLE OF SEPARATE ACCOUNT DIVISIONS. Each division invests in shares of an underlying mutual fund. More detailed information about the underlying mutual funds may be found in the current prospectus for each underlying mutual fund. |
| • | The investment options also include the Fixed Account and the DCA Plus Accounts. |
| • | a dollar amount or percentage of transfer must be specified; |
| • | a transfer may occur on a scheduled or unscheduled basis; |
| • | transfers to the Fixed Account are not permitted if a transfer has been made from the Fixed Account to a division within six months; and |
| • | transfers into DCA Plus Accounts are not permitted. |
| • | a dollar amount must be specified; |
| • | surrendered amounts may be subject to surrender charge; |
| - | for Contracts without the Premium Payment Credit Rider, the maximum surrender charge is 6% of the amount(s) surrendered. | ||
| - | for Contracts with the Premium Payment Credit Rider, the maximum surrender charge is 8% of the amount(s) surrendered. |
| • | total surrenders may be subject to an annual Contract fee; |
| • | during a contract year, partial surrenders less than the Contract’s earnings or 10% of premium payments are not subject to a surrender charge; and |
| • | surrenders before age 591/2 may involve an income tax penalty (seeFEDERAL TAX MATTERS). |
| • | There is no sales charge on premium payments. |
| • | A contingent deferred surrender charge is imposed on certain total or partial surrenders. |
| • | An annual mortality and expense risks charge equal to 1.25% of amounts in the Separate Account divisions is imposed daily. |
| • | The daily Separate Account administration charge currently is zero but we reserve the right to assess a charge not to exceed 0.15% of Separate Account division value(s) annually. |
| • | The optional riders are available at an additional charge (seeCHARGES AND DEDUCTIONS - Charges for Optional Riders). |
| • | Contracts with an accumulated value of less than $30,000 are subject to an annual fee of the lesser of $30 or 2% of the accumulated value. Currently we do not charge the annual fee if your accumulated value is $30,000 or more. If you own more than one variable annuity contract with us, then all the contracts you own or jointly own may be aggregated on each contract’s anniversary, to determine if the $30,000 minimum has been met and whether that contract will be charged. |
| • | Certain states and local governments impose a premium tax. We reserve the right to deduct the amount of the tax from premium payments or accumulated values. |
13
| • | You may choose from several fixed annuity benefit payment options which are described inTHE CONTRACT — The Annuitization Period, Annuity Benefit Payment Options. |
| • | Payments are made to the owner (or beneficiary depending on the annuity benefit payment option selected). You should carefully consider the tax implications of each annuity benefit payment option (seeTHE CONTRACT — The Annuitization Period, Annuity Benefit Payment Options andFEDERAL TAX MATTERS). |
| • | If the owner dies before the annuitization date, a death benefit is payable (seeDeath Benefit). |
| • | The death benefit may be paid as either a single payment or under an annuity benefit payment option (seeDeath Benefit). |
| • | If the annuitant dies after the annuitization date, payments will continue only as provided by the annuity benefit payment option in effect. |
| • | The amount refunded will be a full refund of your accumulated value plus any contract charges and premium taxes you paid (but not fees and charges assessed by the underlying funds), unless state law requires otherwise. | |
| • | The amount refunded may be more or less than the premium payments you’ve made. | |
| • | We recapture the full amount of any premium payment credit or exchange credit. |
14
| • | transfer assets from one division to another division; |
| • | add, combine or eliminate divisions; or |
| • | substitute the shares of a division for shares in another division: |
| – | if shares of a division are no longer available for investment; or |
| – | if in our judgment, investment in a division becomes inappropriate considering the purposes of the division. |
15
| • | The initial premium payment must be at least $5,000 for non-qualified retirement programs. |
| • | All other initial premium payments must be at least $2,000. |
| • | If you are making premium payments through a payroll deduction plan or through a bank (or similar financial institution) account under an automated investment program, your initial and subsequent premium payments must be at least $100. |
| • | All premium payments are subject to a surrender charge period that begins in the contract year each premium payment is received. |
| • | Subsequent premium payments must be at least $500 and can be made until the annuitization date. |
| • | Payments are to be made via personal or financial institution check (for example, a bank or cashier’s check). We reserve the right to refuse any payment that we feel presents a fraud or money laundering risk. Examples of the types of payments we will not accept are cash, money orders, travelers checks, credit card checks, and foreign checks. |
| • | If you are a member of a retirement plan covering three or more persons, the initial and subsequent premium payments for the Contract must average at least $100 and cannot be less than $50. |
| • | The total of all premium payments may not be greater than $2,000,000 without our prior approval. |
| • | The State of Washington does not allow premium payments to be made after the first contract year on Contracts issued in Washington with the Premium Payment Credit rider attached. |
16
| • | the total premium payment(s) made; or |
| • | your accumulated value plus any premium tax charge deducted, less any applicable federal and state income tax withholding and depending upon the state in which the Contract was issued, any applicable fees and charges. |
17
| • | the number of units you have in a division multiplied by |
| • | the value of a unit in the division. |
| • | your initial premium payment; |
| • | subsequent premium payments; |
| • | your exchange credit; |
| • | premium payment credits; and |
| • | transfers from another investment option. |
| • | for partial surrenders and/or partial annuitizations from the division; |
| • | as part of a transfer to another division or the Fixed Account; and |
| • | to pay contract charges and fees. |
| a. | is the share price (net asset value) of the underlying mutual fund at the end of the valuation period; |
| b. | is the per share amount of any dividend* (or other distribution) made by the mutual fund during the valuation period; |
| c. | is the share price (net asset value) of the underlying mutual fund at the end of the previous valuation period; and |
| * | When an investment owned by an underlying mutual fund pays a dividend, the dividend increases the net asset value of a share of the underlying mutual fund as of the date the dividend is recorded. As the net asset value of a share of an underlying mutual fund increases, the unit value of the corresponding division also reflects an increase. Payment of a dividend under these circumstances does not increase the number of units you own in the division. |
| • | On your application, you direct your premium payments to be allocated to the investment options. |
| • | Allocations may be in percentages. |
| • | Percentages must be in whole numbers and total 100%. |
| • | Subsequent premium payments are allocated according to your then current allocation instructions. |
| • | Changes to the allocation instructions are made without charge. |
| – | A change is effective on the next valuation period after we receive your new instructions in good order. |
| – | You can change the current allocations and future allocation instructions by: |
| • | mailing your instructions to us; | ||
| • | calling us at 1-800-852-4450 (if telephone privileges apply); |
18
| • | faxing your instructions to us at 1-866-894-2087; or | ||
| • | visiting www.principal.com. |
| • | Changes to premium payment allocations do not automatically result in the transfer of any existing investment option accumulated values. You must provide specific instructions to transfer existing accumulated values. |
| • | Premium payments are credited on the basis of the unit value next determined after we receive a premium payment. |
| • | If no premium payments are made during two consecutive calendar years and the accumulated value is less than $2,000, we reserve the right to terminate the Contract (seeGENERAL INFORMATION — Reservation of Rights). |
| • | You may request an unscheduled transfer or set up a scheduled transfer by |
| – | mailing your instructions to us; | ||
| – | calling us at 1-800-852-4450 (if telephone privileges apply); | ||
| – | faxing your instructions to us at 1-866-894-2087; or | ||
| – | visiting www.principal.com. |
| • | You must specify the dollar amount or percentage to transfer from each division. |
| • | The minimum transfer amount is the lesser of $100 or the value of your division. |
| • | In states where allowed, we reserve the right to reject transfer instructions from someone providing them for multiple contracts for which he or she is not the owner. |
| • | a transfer has been made from the Fixed Account to a division within six months; or |
| • | following the transfer, the Fixed Account value would be greater than $1,000,000. |
| • | Transfers are not permitted into DCA Plus Accounts. |
| • | The transfer is made, and the values are determined, as of the end of the valuation period in which we receive your request. |
| • | We reserve the right to impose a fee of the lesser of $30 or 2% of the amount transferred on each unscheduled transfer after the first in a contract year. |
| • | requiring a minimum time period between each transfer; | ||
| • | imposing a transfer fee; | ||
| • | limiting the dollar amount that an owner may transfer at any one time; or | ||
| • | not accepting transfer requests from someone providing requests for multiple Contracts for which he or she is not the owner. |
| • | You may elect to have transfers made on a scheduled basis. |
| • | There is no charge for scheduled transfers and no charge for participating in the scheduled transfer program. |
| • | You must specify the dollar amount of the transfer. |
| • | You select the transfer date (other than the 29th, 30th or 31st) and the transfer period (monthly, quarterly, semi-annually or annually). |
| • | If the selected date is not a valuation date, the transfer is completed on the next valuation date. |
| • | Transfers are not permitted into DCA Plus Accounts. |
| • | If you want to stop a scheduled transfer, you must provide us notice prior to the date of the scheduled transfer. |
| • | Transfers continue until your value in the division is zero or we receive notice to stop the transfers. |
| • | We reserve the right to limit the number of divisions from which simultaneous transfers are made. In no event will it ever be less than two. |
| Example: |
19
| Month | Amount Invested | Share Price | Shares Purchased | |||||||||
| January | $ | 100 | $ | 25.00 | 4 | |||||||
| February | $ | 100 | $ | 20.00 | 5 | |||||||
| March | $ | 100 | $ | 20.00 | 5 | |||||||
| April | $ | 100 | $ | 10.00 | 10 | |||||||
| May | $ | 100 | $ | 25.00 | 4 | |||||||
| June | $ | 100 | $ | 20.00 | 5 | |||||||
| Total | $ | 600 | $ | 120.00 | 33 | |||||||
| • | APR allows you to maintain a specific percentage of your Separate Account division accumulated value in specified divisions over time. |
| • | You may elect APR at any time after the examination offer period has expired. |
| • | APR is not available for values in the Fixed Account or the DCA Plus Accounts. |
| • | APR is not available if you have arranged scheduled transfers from the same division. |
| • | There is no charge for APR transfers and no charge for participating in the APR program. |
| • | APR will be done on the frequency you specify: |
| – | quarterly (on a calendar year or contract year basis); or | ||
| – | semiannually or annually (on a contract year basis). |
| • | You may rebalance by |
| – | completing and mailing a form to us, | ||
| – | calling us at 1-800-852-4450 (if telephone privileges apply); | ||
| – | faxing your instructions to us at 1-866-894-2087; or | ||
| – | visiting www.principal.com. |
| • | Divisions are rebalanced at the end of the next valuation period following your request. |
| • | make premium payment allocation changes; |
| • | set up DCA scheduled transfers; |
| • | make transfers; and |
| • | make changes to APR. |
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| • | may be given by calling us at 1-800-852-4450 while we are open for business (generally, between 8 a.m. and 5 p.m. Eastern Time on any day that the NYSE is open). |
| • | that are in good order and received by us before the close of normal trading of the NYSE (generally 4:00 p.m. Eastern Time) will be effective the day they are · received. |
| • | that are in good order and received by us when we are not open for business and/or after the NYSE closes will be effective the next valuation day. |
| • | that are not in good order when received by us will be effective the next valuation day that we receive good order instructions. |
| • | that are in good order and received by us before the close of normal trading of the NYSE (generally 4:00 p.m. Eastern Time) will be effective the day they are · received. |
| • | that are in good order and received by us when we are not open for business and/or after the NYSE closes will be effective the next valuation day. |
| • | that are not in good order when received by us will be effective the next valuation day that we receive good order instructions. |
| • | You may surrender the Contract at any time before the annuitization date. |
| • | You receive the cash surrender value at the end of the valuation period during which we receive your surrender request. |
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| • | The cash surrender value is your accumulated value minus any applicable surrender charges and fee(s) (contract fee and/or prorated share of the charge(s) for optional rider(s)). |
| • | The written consent of all collateral assignees and irrevocable beneficiaries must be obtained prior to surrender. |
| • | We reserve the right to require you to return the Contract. |
| • | Prior to the annuitization date, you may surrender a part of your accumulated value. |
| • | You must specify the dollar amount of the surrender (which must be at least $100). |
| • | The surrender is effective at the end of the valuation period during which we receive your written request for surrender. |
| • | The surrender is deducted from your investment options according to your surrender allocation percentages. |
| • | If surrender allocation percentages are not specified, we use your premium payment allocation percentages. |
| • | We surrender units from your investment options to equal the dollar amount of the surrender request plus any applicable surrender charge and transaction fee, if any. |
| • | The accumulated value after the unscheduled partial surrender must be equal to or greater than $5,000 (we reserve the right to change the minimum remaining accumulated value but it will not be greater than $10,000). |
| • | You may elect partial surrenders from any of your investment options on a scheduled basis. |
| • | Your accumulated value must be at least $5,000 when the scheduled surrenders begin. |
| • | You may specify monthly, quarterly, semi-annually or annually and choose a surrender date (other than the 29th, 30th or 31st). |
| • | If the selected date is not a valuation date, the surrender is completed on the next valuation date. |
| • | We surrender units from your investment options to equal the dollar amount of the surrender request plus any applicable surrender charge. |
| • | The surrenders continue until your value in the investment option is zero or we receive written notice to stop the surrenders. |
| If you die and | And | Then | ||
| You are the sole owner | Your spouse is not named as a primary beneficiary | The beneficiary(ies) receive the death benefit under the Contract. If a beneficiary dies before you, on your death we will make equal payments to the surviving beneficiaries unless you provided us with other written instructions. If no beneficiary(ies) survive you, the death benefit is paid to your estate in a single payment. Upon your death, only your beneficiary(ies’) right to the death benefit will continue; all other rights and benefits under the Contract will terminate. | ||
| You are the sole owner | Your spouse is named as a primary beneficiary | Your spouse may either a. continue the Contract; or b. receive the death benefit under the Contract. All other beneficiaries receive the death benefit under the Contract. If a beneficiary dies before you, on your death we will make equal payments to the surviving beneficiaries unless you provided us with other written instructions. If no beneficiary(ies) survive you, the death benefit is paid to your estate in a single payment. Unless your spouse elects to continue the Contract, only your spouse’s and any other beneficiary(ies’) right to the death benefit will continue; all other rights and benefits under the Contract will terminate. | ||
| You are a joint owner | The surviving joint owner is not your spouse | The surviving owner receives the death benefit under the Contract. Upon your death, only the surviving owner’s right to the death benefit will continue; all other rights and benefits under Contract will terminate. |
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| If you die and | And | Then | ||
| You are a joint owner | The surviving joint owner is your spouse | Your spouse may either a. continue the Contract; or b. receive the death benefit under the Contract. Unless the surviving spouse owner elects to continue the Contract, upon your death, only your spouse’s right to the death benefit will continue; all other rights and benefits under the rider and Contract will terminate. | ||
| You are the annuitant | The owner is not a natural person | The beneficiary(ies) receive the death benefit under the Contract. If a beneficiary dies before the annuitant, on the annuitant’s death we will make equal payments to the surviving beneficiaries unless the owner provided us with other written instructions. If no beneficiary(ies) survive the annuitant, the death benefit is paid to the owner. Upon the annuitant’s death, only the beneficiary(ies’) right to the death benefit will continue; all other rights and benefits under the Contract will terminate. |
| 1. | is the accumulated value on the date we receive proof of death and all required documents; |
| 2. | is the total of premium payments minus an adjustment for each partial surrender (and any applicable surrender charges and fees) and each partial annuitization made prior to the date we receive proof of death and all required documents; and |
| 3. | is the highest accumulated value (on any prior contract anniversary that is divisible by seven) plus any premium payments and minus an adjustment for each partial surrender (and any applicable surrender charges and fees) and each partial annuitization made after that contract anniversary. |
| a. | is the amount of the partial surrender (and any applicable surrender charges and fees) or the amount of the partial annuitization; and |
| b. | is the accumulated value immediately prior to the partial surrender or partial annuitization; and |
| c. | is the amounts determined in 2. or 3. above immediately prior to the partial surrender or partial annuitization. |
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| • | amount of accumulated value applied to the annuity benefit payment option; | |
| • | annuity benefit payment option selected; and | |
| • | age and gender of annuitant (unless fixed income option is selected). |
| • | for Contracts with one annuitant — Life Income with payments guaranteed for a period of 10 years. | |
| • | for Contracts with joint annuitants — Joint and Full Survivor Life Income with payments guaranteed for a period of 10 years. |
| • | Fixed Period Income — Level payments are made for a fixed period. You may select a range from 5 to 30 years. If the annuitant dies before the selected period expires, payments continue to you or the person(s) you designate until the end of period. Payments stop after all guaranteed payments are made. | |
| • | Life Income — Level payments continue for the annuitant’s lifetime. It is possible that you would only receive one payment under this option if the annuitant dies before the second payment is due. If you defer the first payment date, it is possible that you would receive no payments if the annuitant dies before the first payment date. | |
| • | Life Income with Period Certain — Level payments continue during the annuitant’s lifetime with a guaranteed payment period of 5 to 30 years. If the annuitant dies before all of the guaranteed payments have been made, the guaranteed payments continue to you or the person(s) you designate until the end of the guaranteed payment period. | |
| • | Joint and Survivor — Payments continue as long as either the annuitant or the joint annuitant is alive. You may also choose an option that lowers the amount of income after the death of a joint annuitant. It is possible that you would only receive one payment under this option if both annuitants die before the second payment is due. If you defer the first payment date, it is possible that you would receive no payments if both the annuitants die before the first payment date. | |
| • | Joint and Survivor with Period Certain — Payments continue as long as either the annuitant or the joint annuitant is alive with a guaranteed payment period of 5 to 30 years. You may choose an option that lowers the amount of income after the death of a joint annuitant. If both annuitants die before all guaranteed payments have been made, the guaranteed payments continue to you or the person(s) you designate until the end of the guaranteed payment period. |
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| Number of completed contract years | Surrender charge applied to all | |
| since each premium payment | premium payments received in | |
| was made | That contract year | |
| 0 (year of premium payment) | 6% | |
| 1 | 6% | |
| 2 | 6% | |
| 3 | 5% | |
| 4 | 4% | |
| 5 | 3% | |
| 6 | 2% | |
| 7 and later | 0% |
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| Number of completed contract years | Surrender charge applied to all | |
| since each premium payment | premium payments received in | |
| was made | that contract year | |
| 0 (year of premium payment) | 8% | |
| 1 | 8% | |
| 2 | 7% | |
| 3 | 6% | |
| 4 | 5% | |
| 5 | 4% | |
| 6 | 3% | |
| 7 | 2% | |
| 8 | 1% | |
| 9 and later | 0% |
| • | For contracts without the Premium Payment Credit Rider, surrender charges are applicable to premiums payments made in the first three contract years. | ||
| • | For Contracts with the Premium Payment Credit Rider, surrender charges are applicable only to premiums payments made in the first contract year. |
| • | first from premium payments no longer subject to a surrender charge; | |
| • | then from the free surrender privilege (first from the earnings, then from the oldest premium payments (i.e., on a first-in, first-out basis)) described below; and | |
| • | then from premium payments subject to a surrender charge on a first-in, first-out basis. |
| • | earnings in the Contract (earnings equal accumulated value less unsurrendered premium payments as of the date of the surrender); or | |
| • | 10% of the premium payments, decreased by any partial surrenders and partial annuitizations since the last contract anniversary. |
| • | amounts applied under an annuity benefit payment option; or | |
| • | payment of any death benefit, however, the surrender charge does apply to premium payments made by a surviving spouse after an owner’s death; or | |
| • | amounts distributed to satisfy the minimum distribution requirement of Section 401(a)9 of the Internal Revenue Code, provided that the amount surrendered does not exceed the minimum distribution amount which would have been calculated based on the value of this Contract alone; or | |
| • | an amount transferred from a Contract used to fund an IRA to another annuity contract issued by the Company to fund an IRA of the participant’s spouse when the distribution is made pursuant to a divorce decree. |
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| • | furnishing periodic Contract statements, confirmations and other customer communications; | |
| • | preparation and filing of regulatory documents (such as this prospectus); | |
| • | preparing, distributing and tabulating proxy voting materials related to the underlying mutual funds; and | |
| • | providing computer, actuarial and accounting services. |
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| 1. | Accept the increased rider charge and continue to be eligible to receive a Step-Up at each Contract anniversary; or |
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| 2. | Decline the increased rider charge by sending us notice that you are opting out of the Step-Up feature of this rider and remaining at your current rider charge. Once you opt out of the Step-Up feature, you will no longer be eligible for any future Step-Ups and the feature can not be added back to this rider. |
| • | We will apply a credit of 5% of the premium payment to your accumulated value for each premium payment received during your first contract year. The credit is applied to the Contract on the same date the related premium payment is applied to the Contract. For example, if you make a premium payment of $10,000 in your first contract year, a credit amount of $500 will be added to your accumulated value (5% x $10,000). | |
| • | No new credit(s) are paid for premium payments made after the first contract year. |
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| • | For Contracts issued in the state of Washington, no premium payments are allowed after the first contract year for Contracts issued with the Premium Payment Credit Rider. | |
| • | The premium payment credit is allocated among the investment options according to your then current premium payment allocations. | |
| • | We recapture the credit(s) if you exercise your right to return the Contract during the examination offer period or if you request full annuitization of the Contract prior to the third Contract anniversary. | |
| • | The amount we recapture may be more than the current value of the credit(s). If your investment options have experienced negative investment performance (i.e., have lost value) you bear the loss for the difference between the original value of the credit(s) and the current (lower) value of the credit(s). | |
| • | No partial annuitizations are allowed in contract year one. | |
| • | Partial annuitizations are restricted in each of contract years two and three to no more than 10% of the accumulated value as of the most recent Contract anniversary. | |
| • | Credits are considered earnings under the Contract, not premium payments. | |
| • | All premium payments are subject to the 9-year surrender charge table and higher surrender charge (seeCHARGES AND DEDUCTIONS — Surrender Charge). | |
| • | The Premium Payment Credit Rider cannot be cancelled and the associated surrender charge period and percentages cannot be changed. | |
| • | The DCA Plus Program is not available to you if you elect this rider. |
| Sample Division | Number of Units in | |||||||||||
| Unit Value | Sample Division | Accumulated Value | ||||||||||
Prior to the one time adjustment | 25.560446 | 1,611.0709110 | $ | 41,179.69 | ||||||||
After the one time adjustment | 26.659024 | 1,544.6811189 | $ | 41,179.69 | ||||||||
| • | the length of time you plan to own your Contract (this rider increases the amount and duration of the surrender charges, seeCHARGES AND DEDUCTIONS — Surrender Charge); | |
| • | the frequency, amount and timing of any partial surrenders (this rider increases the amount and duration of the surrender charges); | |
| • | the timing and amount of partial annuitizations; | |
| • | the amount and timing of your premium payment(s). Any premium payments made after the first contract year are subject to the rider’s higher Separate Account charges even though no credit is applied to those premium payments; and | |
| • | the higher Separate Account charges reduce investment performance. |
| • | a $25,000 initial premium payment and no additional premium payments; | |
| • | the deduction of total Separate Account annual expenses: |
| - | Contracts with the Premium Payment Credit Rider: |
| • | 1.85% annually for the first eight contract years | ||
| • | 1.25% annually after the first eight contract years |
| - | Contracts without the Premium Payment Credit Rider: |
| • | 1.25% annually for all contract years. |
| • | the deduction of the arithmetic average of the underlying mutual fund expenses as of December 31, 2007; | |
| • | 0%, 5% and 10% annual rates of return before charges; and |
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| • | payment of the $30 annual contract fee (while the Contract’s value is less than $30,000). |
| 0% Annual Return | 5% Annual Return | 10% Annual Return | ||||||||||||||||||||||
| Surrender value | Surrender value | Surrender value | Surrender value | Surrender value | Surrender value | |||||||||||||||||||
| without | with | without | with | without | with | |||||||||||||||||||
| Contract | Premium Payment | Premium Payment | Premium Payment | Premium Payment | Premium Payment | Premium Payment | ||||||||||||||||||
| Year | Credit Rider | Credit Rider | Credit Rider | Credit Rider | Credit Rider | Credit Rider | ||||||||||||||||||
| 1 | $ | 23,123.34 | $ | 23,665.26 | $ | 24,298.34 | $ | 24,872.76 | $ | 25,473.34 | $ | 26,130.71 | ||||||||||||
| 2 | $ | 22,607.86 | $ | 22,999.15 | $ | 24,965.35 | $ | 25,407.43 | $ | 27,532,28 | $ | 28,178.32 | ||||||||||||
| 3 | $ | 22,103.31 | $ | 22,566.93 | $ | 25,651.56 | $ | 26,243.78 | $ | 29,819.71 | $ | 30,264.98 | ||||||||||||
| 4 | $ | 21,812.75 | $ | 22,138.65 | $ | 26,630.35 | $ | 27,101.74 | $ | 32,537.36 | $ | 33,231.52 | ||||||||||||
| 5 | $ | 21,522.38 | $ | 21,714.38 | $ | 27,653.00 | $ | 27,973.54 | $ | 35,449.44 | $ | 36,009.60 | ||||||||||||
| 6 | $ | 21,232.31 | $ | 21,294.18 | $ | 28,697.90 | $ | 28,859.52 | $ | 38,571.26 | $ | 38,971.69 | ||||||||||||
| 7 | $ | 20,942.63 | $ | 20,878.13 | $ | 29,795.67 | $ | 29,789.99 | $ | 41,919.34 | $ | 42,131.19 | ||||||||||||
| 8 | $ | 20,836.82 | $ | 20,466.29 | $ | 31,167.86 | $ | 30,735.97 | $ | 45,761.52 | $ | 45,502.47 | ||||||||||||
| 9 | $ | 20,364.85 | $ | 20,182.45 | $ | 32,065.15 | $ | 31,885.23 | $ | 49,367.03 | $ | 49,376.97 | ||||||||||||
| 10 | $ | 19,902.89 | $ | 19,899.19 | $ | 32,988.28 | $ | 33,060.37 | $ | 53,256.62 | $ | 53,537.03 | ||||||||||||
| 15 | $ | 17,736.00 | $ | 17,732.67 | $ | 38,018.19 | $ | 38,101.27 | $ | 77,813.74 | $ | 78,223.46 | ||||||||||||
| 20 | $ | 15,789.36 | $ | 15,786.37 | $ | 43,815.04 | $ | 43,910.79 | $ | 113,694.39 | $ | 114,293.03 | ||||||||||||
| a. | is 1. minus 2. where: |
| 1. | is the total of premium payments made since the rider effective date increased at a 5% effective annual interest rate; and | ||
| 2. | is an adjustment for each partial surrender and each partial annuitization made since the rider effective date increased at a 5% effective annual interest rate. |
| b. | is (1. plus 2.) minus 3. where: |
| 1. | is the highest accumulated value on any Contract anniversary since the rider effective date; | ||
| 2. | is any premium payments received since that Contract anniversary; and | ||
| 3. | is an adjustment for each partial surrender and each partial annuitization made since that Contract anniversary. |
| c. | is the standard death benefit (seeTHE CONTRACT – Death Benefits, Standard Death Benefit Formula) |
| a. | is (1. plus 2.) minus 3. where: |
| 1. | is the value from a. above as of the lock-in date | ||
| 2. | is any premium payments received since the lock-in date |
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| 3. | is an adjustment for each partial surrender and each partial annuitization made since the lock-in date. |
| b. | is (1. plus 2.) minus 3. where: |
| 1. | is the value from b. above as of the lock-in date | ||
| 2. | is any premium payments received since the lock-in date | ||
| 3. | is an adjustment for each partial surrender and each partial annuitization made since the lock-in date. |
| c. | is the standard death benefit. |
| 1. | is the amount of the partial surrender (plus surrender charge, if any) or the amount of the partial annuitization; | |
| 2. | is the accumulated value immediately prior to the partial surrender or partial annuitization; and | |
| 3. | is the amounts determined in a. or b. above immediately prior to the partial surrender or partial annuitization. |
| NOTE: | For contracts issued in New York and Washington — under this rider, if the original owner dies before the annuitization date, the enhanced death benefit payable to the beneficiary is the greater of b. or c. above. |
| • | original owner or original annuitant has a critical need (NOTE: A change of ownership will terminate this rider; once terminated the rider may not be reinstated.); and | |
| • | the critical need did not exist before the contract date. | |
| • | for the purposes of this rider, the following definitions apply: |
| - | critical need — owner’s or annuitant’s confinement to a health care facility, terminal illness diagnosis or total and permanent disability. If the critical need is confinement to a health care facility, the confinement must continue for at least 60 consecutive days after the contract date and the surrender must occur within 90 days of the confinement’s end. | ||
| - | health care facility — a licensed hospital or inpatient nursing facility providing daily medical treatment and keeping daily medical records for each patient (not primarily providing just residency or retirement care). This does not include a facility primarily providing drug or alcohol treatment, or a facility owned or operated by the owner, annuitant or a member of their immediate families. | ||
| - | terminal illness — sickness or injury that results in the owner’s or annuitant’s life expectancy being 12 months or less from the date notice to receive a distribution from the Contract is received by the Company. In Texas and New Jersey, terminal illness is not included in the criteria for critical need. | ||
| - | total and permanent disability — a disability that occurs after the contract date but before the original owner or annuitant reaches age 65 and qualifies to receive social security disability benefits. In New York, a different definition of total and permanent disability applies. In Oregon, total and permanent disability is not included in the criteria for critical need. |
| NOTE | : The Waiver of Surrender Charge Rider is not available in Massachusetts. |
| Name of Rider | GMWB 1 | GMWB 2 - SL | GMWB 2 – SL/JL | |||
| Marketing Name: | Investment Protector Plus Rider | Investment Protector Plus 2 Rider | Investment Protector Plus 2 Rider | |||
Availability: | Available on or after March 1, 2005 if approved in your state | Available on or after June 8, 2007 and not available after January 21, 2008, unless GMWB 2-SL/JL is not approved in your state* | Available on or after January 21, 2008 if approved in your state* | |||
| Eligibility: | Oldest owner (or oldest annuitant if the owner is not a natural person) must be younger than age 81. | The owner(s) (or the annuitant(s) if the owner is not a natural person) must be at least age 45 and younger than age 81 | The owner(s) (or the annuitant(s) if the owner is not a natural person) must be at least age 45 and younger than age 81 |
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| * | A list of states in which the rider is available may be obtained from your registered representative or by calling us at 1-800-852-4450. |
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| • | do not intend to take any withdrawals from your Contract; | |
| • | intend to allocate all or most of your accumulated value to the Fixed or DCA Accounts; | |
| • | have an aggressive growth investment objective; or | |
| • | anticipate you will take withdrawals prior to the oldest owner’s age 591/2 or that exceed the rider withdrawal benefit payments of 7% of total premium payments for the Investment Back option and 3 to 6.50% of total premium payments for the For Life option, depending on the rider). |
| • | The features of a GMWB rider may not be purchased separately. As a result, you may pay for rider features that you never use. | |
| • | Although the GMWB riders are designed to permit you to recover at least your premium payments, if you make withdrawals that exceed the rider’s withdrawal limits (i.e., Excess Withdrawals), you will shorten the life of the rider, lower the withdrawal benefit payments and/or cause the rider to terminate for lack of value. | |
| • | The rider is not a guarantee that the withdrawal benefit payments will be sufficient to meet your future income needs. | |
| • | The rider is not a guarantee that you will receive any return on your premium payments. | |
| • | The rider is not a guarantee that your investment is protected against loss of purchasing power due to inflation. | |
| • | The fee for a GMWB rider may increase over time due to GMWB Step-Ups, but will not exceed the maximum fee for the particular GMWB rider. | |
| • | A GMWB rider restricts your investment options to a range of investment options that reflect a generally balanced investment objective. The Contract’s aggressive growth investment options are either limited or not available if you elect a GMWB rider. | |
| • | Once elected, you may not terminate a GMWB rider until the fifth contract anniversary following the rider effective date. |
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| • | Want to protect against the risk that your Contract value could fall below your original investment due to market decline. | |
| • | Want an opportunity to increase your rider withdrawal benefit payments at five year intervals. | |
| • | Want our lowest-cost GMWB rider. | |
| • | Do not plan to take withdrawals for at least five years after the rider effective date and want to take advantage of the five-year GMWB Bonus of 5% of premium payments. | |
| • | Want a For Life withdrawal benefit payment that is not dependent on your age when you make your first withdrawal. | |
| • | Are not eligible for the GMWB 2 Rider (SL or SL/JL versions). |
| • | Want to protect against inflation with annual increases in your rider values that match the growth of your Contract accumulated value. | |
| • | Want to defer taking withdrawals for a shorter period and receive an accelerated GMWB Bonus rate as compared to the GMWB 1 rider: the GMWB 2 Bonus period is 3 years at 7%, 6%, and 5% of premium payments vs. the GMWB 1 Bonus period of 5 years at 5% annually of the premium payments. | |
| • | Want to take advantage of the higher tiered For Life withdrawal benefit payment percentages by deferring your withdrawals to age 70 or later. | |
| • | Are willing to pay a higher cost for the flexibility provided by these features. |
| • | Excess Withdrawal – the portion of a withdrawal that exceeds the available withdrawal benefit payment for a withdrawal option. | |
| • | GMWB Bonus – a bonus credited to the withdrawal benefit base and the remaining withdrawal benefit base for each withdrawal option, provided certain conditions are met. | |
| • | GMWB Step-Up – an increase to the withdrawal benefit base and/or remaining withdrawal benefit base for each withdrawal option to an amount equal to your Contract’s accumulated value on the most recent Contract anniversary, provided certain conditions are met. | |
| • | Remaining withdrawal benefit base – the amount available for future withdrawal benefit payments under a withdrawal option. The remaining withdrawal benefit base for each withdrawal option is calculated separately. | |
| • | Required minimum distribution (“RMD”) amount – the amount required to be distributed each calendar year for purposes of satisfying the RMD rules of Section 401(a)(9) of the Internal Revenue Code of 1986, as amended, and related Code provisions in effect as of the rider effective date. | |
| • | Rider effective date – the date the rider is issued. | |
| • | Withdrawal – any partial surrender (including surrender charges, if any) and/or any partial annuitization of your Contract’s accumulated value. |
| NOTE | : Subject to state availability, if your Contract is purchased on or after May 20, 2006, you have the right to partially annuitize a portion of your accumulated value. |
| • | Withdrawal benefit base – the basis for determining the withdrawal benefit payment available each year under a withdrawal option. The withdrawal benefit base for each withdrawal option is calculated separately. | |
| • | Withdrawal benefit payment – the amount that we guarantee you may withdraw each contract year under a withdrawal option. |
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| For Life Withdrawal Option. This option is intended to help you avoid the risk of out-living your money. You are eligible to take For Life withdrawal benefit payments beginning (i) on the rider effective date if the oldest owner (or the oldest annuitant, if the Contract owner is not a natural person) is at least age 591/2 or (ii) on the contract anniversary following the date that the oldest owner (or the oldest annuitant, if applicable) attains age 591/2. Once eligible, you may withdraw an amount up to the annual For Life withdrawal benefit payment until the earlier of the date of your death (annuitant’s death, where applicable) or the date the For Life withdrawal benefit base reduces to zero. (SeeGMWB Death Provisions for discussion of application of rider benefits after your death.) | ||
| Investment Back Withdrawal Option. This option is intended to allow a more rapid recovery of your premium payments (approximately 14 years). You are eligible to take Investment Back withdrawal benefit payments beginning on the rider effective date. You may withdraw an amount up to the annual Investment Back withdrawal benefit payment until the earlier of the date of your death (annuitant’s death if the owner is not a natural person) or the date the Investment Back remaining withdrawal benefit base equals zero. (SeeGMWB Death Provisions for discussion of application of rider benefits after your death.) |
| • | the rider effective date and | |
| • | each contract anniversary. |
| • | increased dollar-for-dollar by any additional premium payments made since the previous contract anniversary and any GMWB Bonus credited since the previous contract anniversary; and | |
| • | decreased to reflect any excess withdrawals taken since the previous contract anniversary (the reduction will be greater than dollar-for-dollar, if the Contract accumulated value is less than the withdrawal benefit base at the time of the excess withdrawal). See Excess Withdrawals, below, for information about the negative effect that excess withdrawals have on the riders. |
| • | the rider effective date, | |
| • | when a premium payment is made, | |
| • | when any applicable GMWB Bonus is credited, and | |
| • | when a withdrawal is taken. |
| • | increased dollar-for-dollar by each additional premium payment made and each GMWB Bonus credited; | |
| • | decreased dollar-for-dollar for each withdrawal benefit payment taken; and | |
| • | decreased to reflect any excess withdrawals taken since the previous contract anniversary (the reduction will be greater than dollar-for-dollar, as shown below, if the Contract accumulated value is less than the remaining withdrawal |
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| benefit base at the time of the excess withdrawal). See Excess Withdrawals, below, for information about the negative effect that excess withdrawals have on the riders. |
| Effect on withdrawal benefit base.Excess withdrawals will reduce each of the withdrawal benefit bases in an amount equal to the greater of |
| • | the excess withdrawal, or | ||
| • | the result of (a. divided by b.) multiplied by c., where: |
| a. | is the amount withdrawn that exceeds the available withdrawal benefit payment prior to the withdrawal; | ||
| b. | is the accumulated value after the withdrawal benefit payment is deducted, but prior to deducting the amount of the excess withdrawal; and | ||
| c. | is the withdrawal benefit base prior to the adjustment for the excess withdrawal. |
| Effect on remaining withdrawal benefit base.Excess withdrawals will reduce each of the remaining withdrawal benefit bases according to the same formula as describe above, except that “c.” is the remaining withdrawal benefit base prior to the adjustment for the excess withdrawal. |
| NOTE 1 | : All withdrawals taken prior to the date that the oldest owner (oldest annuitant, if applicable) has met the For Life age eligibility requirement are excess withdrawals. | ||
| NOTE 2 | For riders purchased prior to March 25, 2008, on qualified contracts, withdrawals made for purposes of satisfying the required minimum distribution for a Contract that exceed the applicable withdrawal benefit payment will be deemed excess withdrawals. (See Required Minimum Distribution, below.) |
| RMD Program.Eligibility in the RMD Program for GMWB Riders is determined by satisfaction of the following requirements: |
| • | your Contract was issued on or after March 25, 2008; | ||
| • | your Contract may not have the Enhanced Death Benefit Rider; | ||
| • | the amount required to be distributed each calendar year for purposes of satisfying the RMD rules of the Internal Revenue Code is based only on this Contract (the “RMD amount”); and | ||
| • | you have elected scheduled withdrawal payments. | ||
| NOTE | : Although enrollment in the RMD Program for GMWB Riders does not prevent you from making an unscheduled withdrawal, an unscheduled withdrawal will cause you to lose the RMD Program protections for the remainder of the contract year. This means that any withdrawals (scheduled or unscheduled) that exceed applicable withdrawal benefit payments will be treated as excess withdrawals, even if the purpose is to take the RMD amount. You will automatically be re-enrolled in the RMD Program for GMWB Riders on your next contract anniversary. |
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| • | the Investment Back withdrawal option (only available if the Investment Back remaining withdrawal benefit base is greater than zero). | |
| • | the For Life withdrawal option (only available if the For Life withdrawal benefit base is greater than zero). |
| • | If you elect the Investment Back withdrawal option, you will receive fixed scheduled payments each year in the amount of the Investment Back withdrawal benefit payment until the Investment Back remaining withdrawal benefit base is zero. If there is any Investment Back remaining withdrawal benefit base at the time of your death, we will continue payments as described in GMWB Death Provision below. | |
| • | If you elect the For Life withdrawal option, you will receive fixed scheduled payments each year in the amount of the For Life withdrawal benefit payment, until the later of |
| – | the date the For Life remaining withdrawal benefit base is zero; or | ||
| – | the date of your death (annuitant’s death if the owner is not a natural person). |
NOTE: | In the event that the Contract accumulated value reduces to zero, the withdrawal benefit payments elected above will continue, but all other rights and benefits under this rider and the Contract (including the death benefits) will terminate, and no additional premium payments will be accepted. |
| • | Payments resulting from applying the accumulated value to an annuity benefit payment option. |
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| • | Payment of the accumulated value as a single payment. |
| • | You may elect the Investment Back withdrawal option and receive fixed scheduled payments each year in the amount of the Investment Back withdrawal benefit payment, until the Investment Back remaining withdrawal benefit base is zero. If there is any Investment Back remaining withdrawal benefit base at the time of your death (death of the first annuitant to die if the owner is not a natural person), we will continue payments as described in GMWB Death Provision below. |
| • | You may elect the For Life withdrawal option and receive fixed scheduled payments each year in the amount of the For Life withdrawal benefit payment, until the later of |
| – | the date the For Life remaining withdrawal benefit base is zero; or | ||
| – | the date of your death (the death of the first annuitant to die if the owner is not a natural person). |
| • | the fifth contract anniversary following the rider effective date; or | |
| • | the date you take a withdrawal following the rider effective date. |
NOTE: | The GMWB Bonus is used only for purposes of calculating the withdrawal benefit bases and the remaining withdrawal benefit bases. It is not added to your Contract accumulated value. |
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| If you die and | And | Then | ||
| You are the sole owner | Your spouse is not | The primary beneficiary(ies) must elect one of the following: | ||
| named as a primary | a. receive the death benefit under the Contract*; or | |||
| beneficiary | b. receive the Investment Back remaining withdrawal benefit base as a series of payments.** | |||
| Upon your death, only your beneficiary(ies)’s right to the above-selected payments will continue; all other rights and benefits under the rider and Contract will terminate. | ||||
| You are the sole owner | Your spouse is | Your spouse must | ||
| named as a primary beneficiary | a. continue the contract with or without this rider as set forth below in “Spousal Continuation”; or | |||
| b. elect one of the following: | ||||
| • receive the death benefit under the Contract*; | ||||
| • receive the Investment Back remaining withdrawal benefit base as a series of payments.** | ||||
| All other primary beneficiaries must elect one of the options listed above in b. | ||||
| Unless your spouse elects to continue the contract with this rider, only your spouse’s and beneficiary(ies)’s right to the above-selected payments will continue; all other rights and benefits under the rider and Contract will terminate. | ||||
| You are a joint owner | The surviving joint | The surviving owner must elect one of the following: | ||
| owner is not your | a. receive the death benefit under the Contract*; or | |||
| spouse | b. receive the Investment Back remaining withdrawal benefit base as a series of payments.** | |||
| Upon your death, only the surviving owner’s right to the above-selected payments will continue; all other rights and benefits under the rider and Contract will terminate. | ||||
| You are a joint owner | The surviving joint | Your spouse must | ||
| owner is your spouse | a. continue the contract with or without this rider as set forth below in “Spousal Continuation”; or | |||
| b. elect one of the following: | ||||
| • receive the death benefit under the Contract*; | ||||
| • receive the Investment Back remaining withdrawal benefit base as a series of payments.** | ||||
| Unless the surviving spouse owner elects to continue the contract with this rider, upon your death, only your spouse’s right to the above-selected payments will continue; all other rights and benefits under the rider and Contract will terminate. | ||||
| You are the annuitant | The owner is not a | The primary beneficiary(ies) must elect one of the following: | ||
| natural person | a. receive the death benefit under the Contract*; or | |||
| b. receive the Investment Back remaining withdrawal benefit base as a series of payments.** | ||||
| Upon your death, only the beneficiary(ies)’ right to the above-selected payments will continue; all other rights and benefits under the rider and Contract will terminate. |
| * | Please seeTHE CONTRACT — Death Benefitfor an explanation of the Contract’s death benefit and payment options available for the Contract’s death benefit. | |
| ** | We will make payments in an amount and frequency acceptable to us. If a surviving owner or beneficiary chooses a periodic payment, it must be at least $100 per payment until the Investment Back remaining withdrawal benefit base is zero. | |
| The GMWB Death Provision is different under the GMWB 2-SL/JL Rider. Please see the discussion under the GMWB 2 Rider for more information. |
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| If you die and | And | And | Then | |||
| You are the sole owner | — | You elected the For Life withdrawal option* | We will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | |||
| You are the sole owner | — | You elected the Investment Back withdrawal option* | We will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the Investment Back remaining withdrawal benefit base reduces to zero. | |||
| You are a joint owner | — | You elected the For Life withdrawal option* | We will continue payments to the surviving joint owner according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | |||
| Upon the surviving joint owner’s death, we will continue payments to the beneficiary(ies) according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | ||||||
| You are a joint owner | — | You elected the Investment Back withdrawal option* | We will continue payments to the surviving joint owner according to the schedule established when you made your election until the Investment Back remaining withdrawal benefit base reduces to zero. | |||
| Upon the surviving joint owner’s death, we will continue payments to the beneficiary(ies) according to the schedule established when you made your election until the Investment Back remaining withdrawal benefit base reduces to zero. | ||||||
| You are an annuitant | The owner is not a natural person | The owner elected the For Life withdrawal option* | We will continue payments to the owner’s beneficiary(ies) according to the schedule established when the owner made its election until the For Life remaining withdrawal benefit base reduces to zero. | |||
| You are an annuitant | The owner is not a natural person | The owner elected the Investment Back withdrawal option* | We will continue payments to the owner’s beneficiary(ies) according to the schedule established when the owner made its election until the Investment Back remaining withdrawal benefit base reduces to zero. |
| * | Please seeEffect of the Accumulated Value Reaching Zero,above, for details regarding election of the For Life withdrawal option or the Investment Back withdrawal option. |
| 1. | the Contract accumulated value is greater than zero; | |
| 2. | the Contract and this rider have not been previously continued; and | |
| 3. | your spouse is either |
| a. | your primary beneficiary, if you were the sole owner; or | ||
| b. | the surviving joint owner, if there were joint owners. |
NOTE: | Although spousal continuation may be available under federal tax laws for a subsequent spouse, this rider may be continued one time only. |
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| • | the date you send us notice to terminate the rider (after the 5th contract anniversary following the rider effective date). This will terminate the rider, not the Contract. | |
| • | the date you fully annuitize, fully surrender or otherwise terminate the Contract. | |
| • | the date the Investment Back remaining withdrawal benefit base and the For Life withdrawal benefit base are both zero. | |
| • | the date any portion of your Contract accumulated value is invested in investment options not included in the GMWB investment options. | |
| • | the date the contract owner is changed (annuitant is changed if the owner is not a natural person), except a change in owner due to a spousal continuation of the rider as described above in “Spousal Continuation”. | |
| • | the date your surviving spouse elects to continue the Contract without this rider. |
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| Contract Anniversary | ||
| following the | GMWB Bonus | |
| rider effective date | Percentage | |
| 1 | 7.00% | |
| 2 | 6.00% | |
| 3 | 5.00% |
| • | the third contract anniversary following the rider effective date; or | |
| • | the date you take a withdrawal following the rider effective date. |
| NOTE: | The GMWB 2 Bonus is used only for purposes of calculating the withdrawal benefit bases and the remaining withdrawal benefit bases of the withdrawal options. The GMWB 2 Bonus is not added to your accumulated value. |
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| 1. | the contract anniversary occurs before the later of |
| a. | the contract anniversary following the date the oldest owner (oldest annuitant if the owner is not a natural person) attains age 80; or | ||
| b. | ten years after the rider effective date; |
| 2. | you have not declined any increases in the rider charge; | |
| 3. | you have not fully annuitized the Contract; and | |
| 4. | if your rider is GMWB 2-SL/JL, the remaining withdrawal benefit base has not reduced to zero during the life of the rider |
| a. | the owner if there is only one owner; | ||
| b. | the annuitant if the owner is not a natural person; | ||
| c. | the youngest joint owner if there are joint owners; or | ||
| d. | the youngest annuitant if there are joint annuitants and the owner is not a natural person. |
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| a. | if there is only one owner, the owner and the owner’s spouse, provided the spouse is named as a primary beneficiary; or | ||
| b. | the joint owners, provided the joint owners are each other’s spouse. |
| NOTE 1: | For purposes of this rider, “spouse” means the person who is recognized as the owner’s spouse and eligible to make a spousal election under federal tax laws. |
| NOTE 2: | At the time a covered life is designated, that covered life must satisfy this rider’s issue age requirements on the date the covered life is designated. |
| • | If “Single Life” For Life withdrawal benefit payments are elected: |
| Age of Covered Life | For Life Withdrawal | |
| at First Withdrawal | Benefit Payment Percentage | |
| 45-49 | 3.50% | |
| 50-54 | 4.00% | |
| 55-59 | 4.50% | |
| 60-69 | 5.00% | |
| 70-74 | 5.50% | |
| 75-79 | 6.00% | |
| 80+ | 6.50% |
| • | If “Joint Life” For Life withdrawal benefit payments are elected: |
| Age of Younger | ||
| Covered Life | For Life Withdrawal | |
| at First Withdrawal | Benefit Payment Percentage | |
| 45-49 | 3.00% | |
| 50-54 | 3.50% | |
| 55-59 | 4.00% | |
| 60-69 | 4.50% | |
| 70-74 | 5.00% | |
| 75-79 | 5.50% | |
| 80+ | 6.00% |
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| 1. | Spousal continuation of this rider as described below in “Spousal Continuation.” | ||
| 2. | If withdrawals have not been taken and you have not previously elected to continue this rider as provided in “Spousal Continuation,” then |
| a. | you may add a joint owner or primary beneficiary to your Contract as a covered life, provided that the new joint owner or primary beneficiary is an eligible covered life as set forth above. | ||
| b. | you may remove a joint owner or primary beneficiary as a covered life. | ||
| c. | the For Life withdrawal benefit payment percentage will be based on the age of the covered lives and will lock in at the percentage applicable on the date of your first withdrawal. |
| 3. | If withdrawals have been taken and you have locked in “Single Life” For Life withdrawal benefit payments, then |
| a. | you may remove a joint owner as a covered life; | ||
| b. | you may add a primary beneficiary to your Contract; however, you may not add a primary beneficiary as a covered life for purposes of this rider. | ||
| c. | The For Life withdrawal benefit payment percentage will remain locked at the percentage applicable on the date of your first withdrawal and will not be reset to reflect the removal of the covered life. For Life withdrawal benefit payments will cease upon your death. |
| 4. | If withdrawals have been taken and you have locked in “Joint Life” For Life withdrawal benefit payments, then |
| a. | you may remove a joint owner or primary beneficiary as a covered life; | ||
| b. | you may add a primary beneficiary to your Contract; however, you may not add a primary beneficiary as a covered life for purposes of this rider. | ||
| c. | the For Life withdrawal benefit payment percentage will remain locked at the percentage applicable on the date of your first withdrawal and will not be reset to reflect the removal of the covered life. For Life withdrawal benefit payments will cease upon your death. |
| 5. | If you have previously elected to continue this rider as provided in “Spousal Continuation”, then you may add a primary beneficiary to your Contract; however, you may not add a primary beneficiary as a covered life for purposes of this rider. |
| • | If you have taken withdrawal benefit payments prior to the accumulated value reaching zero, your For Life withdrawal option is either “Joint Life” or “Single Life”, depending on your election at the time of your first withdrawal. | |
| • | If you have not taken withdrawal benefit payments prior to the accumulated value reaching zero, you must elect either |
| – | the “Single Life” For Life withdrawal option: you will receive fixed scheduled payments each year in the amount of the For Life withdrawal benefit payment, until the later of |
| • | the date the For Life remaining withdrawal benefit base is zero; or | ||
| • | the date of your death (annuitant’s death if the owner is not a natural person). |
| – | the “Joint Life” For Life withdrawal option; you will receive fixed scheduled payments each year in the amount of the For Life withdrawal benefit payment, until the later of |
| • | the date the For Life remaining withdrawal benefit base is zero; or | ||
| • | the date of the death of the last covered life to die. |
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| If you die and | And | And | Then | |||
| You are the sole owner | — | You elected the “Single Life” For Life withdrawal option* | We will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | |||
| You are the sole owner | — | You elected the “Joint Life” For Life withdrawal option* | We will continue payments to the surviving covered life according to the schedule established when you made your election until the date of the surviving covered life’s death. | |||
| Upon the surviving covered life’s death, we will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | ||||||
| You are the sole owner | — | You elected the Investment Back withdrawal option* | We will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the Investment Back remaining withdrawal benefit base reduces to zero. | |||
| You are a joint owner | — | You elected the “Single Life” For Life withdrawal option* | We will continue payments to the surviving joint owner according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | |||
| Upon the surviving joint owner’s death, we will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | ||||||
| You are a joint owner | — | You elected the “Joint Life” For Life withdrawal option* | We will continue payments to the surviving covered life according to the schedule established when you made your election until the date of the surviving covered life’s death. | |||
| Upon the surviving covered life’s death, we will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the For Life remaining withdrawal benefit base reduces to zero. | ||||||
| You are a joint owner | — | You elected the Investment Back withdrawal option* | We will continue payments to the surviving joint owner according to the schedule established when you made your election until the Investment Back remaining withdrawal benefit base reduces to zero. | |||
| Upon the surviving joint owner’s death, we will continue payments to your beneficiary(ies) according to the schedule established when you made your election until the Investment Back remaining withdrawal benefit base reduces to zero. | ||||||
| You are an annuitant | The owner is not a natural person | The owner elected the “Single Life”For Life withdrawal option* | We will continue payments to the owner’s beneficiary(ies) according to the schedule established when the owner made its election until the For Life remaining withdrawal benefit base reduces to zero. | |||
| You are an annuitant | The owner is not a natural person | The owner elected the Investment Back withdrawal option* | We will continue payments to the owner’s beneficiary(ies) according to the schedule established when the owner made its election until the Investment Back remaining withdrawal benefit base reduces to zero. |
| * | Please see “GMWB 2-SL/JL Effect of Accumulated Value Reaching Zero” for details regarding election of the For Life withdrawal option or the Investment Back withdrawal option. |
| NOTE: | The “Joint Life” For Life withdrawal option is not available if the owner is a not a natural person. |
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| If you die and | And | And | Then if your spouse continues this rider | |||
| No withdrawals have been taken since the rider effective date | Your spouse meets the minimum issue age requirement | — | Your spouse may take withdrawals under either withdrawal option as follows: a. The For Life withdrawal option will be available until the earlier of the death of your spouse or the For Life withdrawal benefit base reduces to zero. For Life withdrawal benefits will automatically be calculated as “Single Life” and your spouse will be the sole covered life. Your spouse may not add a new covered life or elect “Joint Life”. The For Life withdrawal benefit percentage will be based on your spouse’s age and will lock in at the “Single Life” percentage applicable on the date of your spouse’s first withdrawal. b. The Investment Back withdrawal option will continue to be available until the Investment Back remaining withdrawal benefit base is zero. c. All other provisions of this rider will continue as in effect on the date of your death. | |||
| No withdrawals have been taken since the rider effective date | Your spouse does not meet the minimum issue age requirement | — | The For Life withdrawal option terminates upon your death. Your spouse may take withdrawals under the Investment Back withdrawal option as follows: a. The Investment Back withdrawal option will continue to be available until the Investment Back remaining withdrawal benefit base reduces to zero. b. All other provisions of this rider will continue as in effect on the date of your death. | |||
| Withdrawals have been taken since the rider effective date | You have locked in “Single Life” For Life withdrawal benefits | — | The For Life withdrawal option terminates upon your death. Your spouse may take withdrawals under the Investment Back withdrawal option as follows: a. The Investment Back withdrawal option will continue to be available until the Investment Back remaining withdrawal benefit base reduces to zero. b. All other provisions of this rider will continue as in effect on the date of your death | |||
| Withdrawals have been taken since the rider effective date | You have locked in “Joint Life” For Life withdrawal benefits | Your spouse is the surviving covered life | Your spouse may take withdrawals under either withdrawal option as follows: a. The For Life withdrawal option will continue to be available until the earlier of the death of your spouse or the For Life withdrawal benefit base reduces to zero. For Life withdrawal benefits will continue to be calculated as “Joint Life”. The For Life withdrawal benefit percentage will remain locked in at the “Joint Life” percentage applicable on the date of your first withdrawal and will not be reset to reflect your death. b. The Investment Back withdrawal option will continue to be available until the Investment Back remaining withdrawal benefit base reduces to zero. c. All other provisions of this rider will continue as in effect on the date of your death. | |||
| Withdrawals have been taken since the rider effective date | You have locked in “Joint Life” For Life withdrawal benefits | There is no surviving covered life | The For Life withdrawal option terminates upon your death. Your spouse may take withdrawals under the Investment Back withdrawal option as follows: a. The Investment Back withdrawal option will continue to be available until the Investment Back remaining withdrawal benefit base reduces to zero. b. All other provisions of this rider will continue as in effect on the date of your death. |
| Name of Rider | GMWB 1 | GMWB 2 - SL | GMWB - SL/JL | |||
Marketing Name | Investment Protector Plus Rider | Investment Protector Plus 2 Rider | Investment Protector Plus 2 Rider | |||
Rider Issue Age | 0 – 80 | 45 – 80 | 45 – 80 | |||
| Rider Charge | • Current annual charge is 0.60% of the Investment Back remaining withdrawal benefit base • Maximum annual charge of 0.85% | • Current annual charge is 0.75% of the Investment Back withdrawal benefit base • Maximum annual charge of 1.00% | • Same as GMWB2-SL | |||
Guaranteed Minimum Withdrawal Benefits | • Investment Back • For Life | • Same as GMWB 1 | • Same as GMWB 1 |
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| Name of Rider | GMWB 1 | GMWB 2 - SL | GMWB - SL/JL | |||
Annual Withdrawal Limits | • Investment Back - - 7% of the Investment Back withdrawal benefit base • For Life — 5% of the For Life withdrawal benefit base | • Investment Back - same as GMWB 1 • For Life — tiered percentage based on age at first withdrawal, beginning at 3.50% and capping at a maximum of 6.50% of the For Life withdrawal benefit base | • Investment Back - - Same as GMWB 1 • “Single Life” - same as GMWB 2-SL • “Joint Life” - tiered percentages based on age at first withdrawal, beginning at 3.00% and capping at a maximum of 6.00% of the For Life withdrawal benefit base | |||
For Life Withdrawal Benefit Payments | • Single Life only • Available theontract anniversary following the date the oldest owner turns 591/2 — all withdrawals prior to that contract anniversary are excess withdrawals under the For Life withdrawal option | • Same as GMWB 1 • Same age eligibility restriction as GMWB 1 | • Single Life or Joint Life (your life and the lifetime of your eligible spouse) • For Life withdrawal benefit payments default to “Single Life” unless “Joint Life” is elected • Same age eligibility restriction as GMWB 1 | |||
Termination | • You may terminate this Rider anytime after the 5th contract anniversary following the rider effective date | • Same as GMWB 1 | • Same as GMWB 1 | |||
GMWB Step-Up | • Optional GMWB Step-Up that you may elect beginning with the 5th contract anniversary. Once you have elected a GMWB Step-Up, you must wait at least 5 contract years to elect another GMWB Step-Up. • Rider effective dates on or after June 15, 2008: the remaining withdrawal benefit bases are not eligible for Step-Ups after the Investment Back remaining withdrawal benefit base reduces to zero, even if additional premium payments are made. | • Automatic annual GMWB Step-Up available until the later of (a) the Contract Anniversary prior to age 80 or (b) 10 years after the rider effective date. • There are no restrictions on Step-Ups of the remaining withdrawal benefit bases after reducing to zero. | • Same as GMWB 2-SL • A remaining withdrawal benefit base under a withdrawal option is not eligible for Step-Up after it reduces to zero, even if additional premium payments are made. | |||
GMWB Bonus | • If no withdrawals are taken, a GMWB Bonus of 5% is applied each year on the contract anniversary for the first 5 years. | • If no withdrawals are taken, a GMWB Bonus is applied on each contract anniversary as shown below. • Year 1 — 7.00% of premium payments • Year 2 — 6.00% of premium payments • Year 3 — 5.00% of premium payments | • Same as GMWB 2-SL |
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| Name of Rider | GMWB 1 | GMWB 2 - SL | GMWB - SL/JL | |||
Investment Restrictions | • You must select one of the GMWB investment options; there are no restrictions on allocations to the Fixed Account or DCA Plus Accounts. | • Same as GMWB 1 | • Same as GMWB 1 | |||
Spousal Continuation | • At the death of the first owner to die, a spouse who is a joint owner or primary beneficiary may continue the contract with or without this rider • Only the Investment Back withdrawal option continues; the For Life withdrawal option terminates without value. | • Same as GMWB 1 • Same as GMWB 1 | • Same as GMWB 1 • The Investment Back withdrawal option continues; the For Life withdrawal option continues for eligible spouses. |
| NOTE: | We reserve the right to reduce the Fixed Account interest rate by up to 0.60% if you elect the Premium Payment Credit Rider. |
| • | premium payments or credits allocated to the Fixed Account; | |
| • | plus any transfers to the Fixed Account from the other investment options; |
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| • | plus interest credited to the Fixed Account; | |
| • | minus any surrenders or applicable surrender charges or partial annuitizations from the Fixed Account; | |
| • | minus any transfers to the Separate Account. |
| • | transfer an amount not to exceed 25% of your Fixed Account accumulated value; or | ||
| • | transfer up to 100% of your Fixed Account accumulated value if: |
| – | your Fixed Account accumulated value is less than $1,000; or | ||
| – | (a) minus (b) is greater than 1% where: |
| (a) | is the weighted average of your Fixed Account interest rates for the preceding contract year; and | ||
| (b) | is the renewal interest rate for the Fixed Account. |
| • | You may establish scheduled transfers by sending a written request or by telephoning the home office at 1-800-852-4450. | ||
| • | Transfers occur on a date you specify (other than the 29th, 30th or 31st of any month). | ||
| • | If the selected date is not a valuation date, the transfer is completed on the next valuation date. | ||
| • | Scheduled transfers are only available if the Fixed Account accumulated value is $5,000 or more at the time the scheduled transfers begin. | ||
| • | Scheduled monthly transfers of an amount not to exceed 2% of your Fixed Account accumulated value at the beginning of the contract year or the current Fixed Account accumulated value will continue until the Fixed Account accumulated value is zero or until you notify us to discontinue the transfers. | ||
| • | The minimum transfer amount is $100. | ||
| • | If the Fixed Account accumulated value is less than $100 at the time of transfer, the entire Fixed Account accumulated value will be transferred. | ||
| • | If you stop the transfers, you may not start transfers again without our prior approval. |
| NOTE: | If you elect the Premium Payment Credit Rider, you may not participate in the DCA Plus Program. |
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| • | trading on the NYSE is restricted as determined by the SEC or when the NYSE is closed for other than weekends and holidays; or | |
| • | an emergency exists, as determined by the SEC, as a result of which: |
| – | disposal by a mutual fund of securities owned by it is not reasonably practicable; | ||
| – | it is not reasonably practicable for a mutual fund to fairly determine the value of its net assets; or | ||
| – | the SEC permits suspension for the protection of security holders. |
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| • | we reinstate the Contract effective on the original surrender date; | |
| • | if you had the Premium Payment Credit Rider on the original Contract, the 9-year surrender charge period applies to the reinstated Contract. The remaining surrender charge period, if any, is calculated based on the number of years since the original contract date; | |
| • | we apply the amount received from the other company and the amount of the surrender charge you paid when you surrendered the Contract; | |
| • | these amounts are priced on the valuation date the money from the other company is received by us; | |
| • | commissions are not paid on the reinstatement amounts; and | |
| • | new data pages are sent to your address of record. |
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| NOTE: | Reinstatement is only available if you have surrendered your Contract for your full accumulated value. Any payments you make after a partial surrender of partial annuitization will be deemed new premium payments. |
| • | transfer assets in any division to another division or to the Fixed Account; | |
| • | add, combine or eliminate a division(s); | |
| • | substitute the units of a division for the units of another division; |
| – | if units of a division are no longer available for investment; or | ||
| – | if in our judgment, investment in a division becomes inappropriate considering the purposes of the Separate Account. |
| • | Disrupt the management of the underlying mutual funds by; |
| – | forcing the fund to hold short-term (liquid) assets rather than investing for long term growth, which results in lost investment opportunities for the fund; and | ||
| – | causing unplanned portfolio turnover; |
| • | Hurt the portfolio performance of the underlying mutual funds; and | |
| • | Increase expenses of the underlying mutual fund and separate account due to; |
| – | increased broker-dealer commissions; and | ||
| – | increased recordkeeping and related costs. |
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| • | Rejecting transfer instructions from a Contract owner or other person authorized by the owner to direct transfers; | |
| • | Restricting submission of transfer requests by, for example, allowing transfer requests to be submitted by 1st class U.S. mail only and disallowing requests made via the internet, by facsimile, by overnight courier or by telephone; | |
| • | Limiting the number of unscheduled transfer during a Contract year to no more than 12; | |
| • | Prohibiting you from requesting a transfer among the divisions for a minimum of thirty days where there is evidence of at least one round-trip transaction (exchange or redemption of shares that were purchased within 30 days of the exchange/redemption) by you; and | |
| • | Taking such other action as directed by the underlying mutual fund. |
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| • | Premium payments made under non-qualified Contracts are not excludable or deductible from your gross income or any other person’s gross income. | |
| • | An increase in the accumulated value of a non-qualified Contract owned by a natural person resulting from the investment performance of the Separate Account or interest credited to the DCA Plus Accounts and the Fixed Account is generally not taxable until paid out as surrender proceeds, death benefit proceeds, or otherwise. | |
| • | Generally, owners who are not natural persons are immediately taxed on any increase in the accumulated value. |
| • | Surrenders or partial surrenders are taxed as ordinary income to the extent of the accumulated income or gain under the Contract. | |
| • | The value of the Contract pledged or assigned is taxed as ordinary income to the same extent as a partial surrender. | |
| • | Annuity benefit payments: |
| – | The “investment in the contract” is generally the total of the premium payments made. | ||
| – | The basic rule for taxing annuity benefit payments is that part of each annuity benefit payment is considered a nontaxable return of the investment in the contract and part is considered taxable income. An “exclusion ratio” is applied to each annuity benefit payment to determine how much of the payment is excludable from gross income. The remainder of the annuity benefit payment is includable in gross income for the year received. | ||
| – | After the premium payment(s) in the Contract is paid out, the full amount of any annuity benefit payment is taxable. |
| • | If the person receiving payments dies on or after the annuitization date but prior to the time the entire interest in the Contract has been distributed, the remaining portion of the interest is distributed at least as rapidly as under the method of distribution being used as of the date of that person’s death. | |
| • | If you die prior to the annuitization date, the entire interest in the Contract will be distributed: |
| – | within five years after the date of your death; or | ||
| – | as annuity benefit payments which begin within one year of your death and which are made over the life of your designated beneficiary or over a period not extending beyond the life expectancy of that beneficiary. |
| • | If you take a distribution from the Contract before you are 591/2, you may incur an income tax penalty. |
57
| • | IRA — An Individual Retirement Annuity (IRA) is a retirement savings annuity. Contributions grow tax deferred. | |
| • | SEP-IRA — A SEP is a form of IRA. A SEP allows you, as an employer, to provide retirement benefits for your employees by contributing to their IRAs. | |
| • | SIMPLE-IRA — SIMPLE stands for Savings Incentive Match Plan for Employers. A SIMPLE-IRA allows employees to save for retirement by deferring salary on a pre-tax basis and receiving predetermined company contributions. |
| • | made on or after you reach age 591/2; | |
| • | made to a beneficiary on or after your death; | |
| • | made upon your disability; | |
| • | part of a series of substantially equal periodic payments for the life or life expectancy of you or you and the beneficiary; | |
| • | made to pay certain medical expenses; | |
| • | for health insurance premiums while employed; | |
| • | for first home purchases (up to $10,000); | |
| • | for qualified higher education expenses; | |
| • | for qualified hurricane distributions (up to $100,000); or | |
| • | for qualified reservist distributions. |
58
| • | increase the minimum amount for each premium payment to not more than $1,000; and | |
| • | terminate a Contract and send you the accumulated value if no premiums are paid during two consecutive calendar years and the accumulated value (or total premium payments less partial surrenders and applicable surrender charges) is less than $2,000. The Company will first notify you of its intent to exercise this right and give you 60 days to increase the accumulated value to at least $2,000. |
59
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| AIM V.I. Basic Value Division | ||
Invests in: | AIM V.I. Basic Value Fund — Series I Shares | |
Investment Advisor: | Invesco Aim Advisors, Inc. | |
Investment Objective: | seeks long-term growth of capital. | |
| AIM V.I. International Growth Division | ||
Invests in: | AIM V.I. International Growth Fund — Series I Shares | |
Investment Advisor: | Invesco Aim Advisors, Inc. | |
Investment Objective: | Seeks to provide long-term growth of capital by investing in a diversified portfolio of international equity securities whose issuers are considered to have strong earnings momentum. | |
| AIM V.I. Small Cap Equity Division | ||
Invests in: | AIM V.I. Small Cap Equity Fund — Series I Shares | |
Investment Advisor: | Invesco Aim Advisors, Inc. | |
Investment Objective: | seeks long-term growth of capital. | |
| AllianceBernstein Small Cap Growth Division | ||
Invests in: | AllianceBernstein Variable Products Series Fund, Inc. — AllianceBernstein Small Cap Growth Portfolio — Class A | |
Investment Advisor: | AllianceBernstein L.P. | |
Investment Objective: | seeks growth of capital by pursuing aggressive investment policies. | |
| American Century VP Inflation Protection Division | ||
Invests in: | American Century VP Inflation Protection — Class II | |
Investment Advisor: | American Century Investment Management, Inc. | |
Investment Objective: | seeks long-term total return using a strategy that seeks to protect against U.S. inflation. | |
| American Century VP Ultra Division | ||
Invests in: | American Century VP Ultra Fund — Class II | |
Investment Advisor: | American Century Investment Management, Inc. | |
Investment Objective: | seeks long-term capital growth by investing primarily in stocks of U.S. companies. | |
| American Century VP Vista Division | ||
Invests in: | American Century VP Vista Fund — Class I | |
Investment Advisor: | American Century Investment Management, Inc. | |
Investment Objective: | seeks long term capital growth. | |
| Dreyfus Investment Portfolio Technology Growth Division | ||
Invests in: | Dreyfus Investment Portfolio Technology Growth — Service Shares | |
Investment Advisor: | The Dreyfus Corporation | |
Investment Objective: | seeks capital appreciation. | |
| Fidelity VIP Contrafund® Division | ||
Invests in: | Fidelity VIP Contrafund® Portfolio — Service Class II | |
Investment Advisor: | Fidelity Management & Research Company | |
Investment Objective: | seeks long-term capital appreciation. | |
61
| Fidelity VIP Equity-Income Division | ||
Invests in: | Fidelity VIP Equity-Income Portfolio — Service Class II | |
Investment Advisor: | Fidelity Management & Research Company | |
Investment Objective: | seeks reasonable income. The fund will also consider the potential for capital appreciation. The fund’s goal is to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor’s 500/SM/ Index (S&P 500®). | |
| Fidelity VIP Growth Division | ||
Invests in: | Fidelity VIP Growth Portfolio – Service Class II | |
Investment Advisor: | Fidelity Management & Research Company | |
Investment Objective: | seeks to achieve capital appreciation. | |
| Fidelity VIP Mid Cap Division | ||
Invests in: | Fidelity VIP Mid Cap Portfolio – Service Class II | |
Investment Advisor: | Fidelity Management & Research Company | |
Investment Objective: | seeks long-term growth of capital. | |
| Fidelity VIP Overseas Division | ||
Invests in: | Fidelity VIP Overseas Fund – Service Class II | |
Investment Advisor: | Fidelity Management & Research Company | |
Investment Objective: | seeks long-term growth of capital. | |
| Goldman Sachs Structured Small Cap Equity Division | ||
Invests in: | Goldman Sachs VIT – Goldman Sachs Structured Small Cap Equity Fund – Institutional Class | |
Investment Advisor: | Goldman Sachs Asset Management, L.P. | |
Investment Objective: | seeks long-term growth of capital. | |
| Goldman Sachs Mid Cap Value Division | ||
Invests in: | Goldman Sachs VIT – Goldman Sachs Mid Cap Value Fund – Institutional Class | |
Investment Advisor: | Goldman Sachs Asset Management, L.P. | |
Investment Objective: | seeks long-term growth of capital. | |
| Lehman Brothers High Income Bond Division | ||
Invests in: | Lehman Brothers High Income Bond Account — S Class | |
Investment Advisor: | Lehman Brothers Asset Management, LLC | |
Investment Objective: | seeks high total returns consistent with capital preservation. | |
| Neuberger Berman AMT Fasciano Division | ||
Invests in: | Neuberger Berman AMT Fasciano Portfolio – S Class | |
Investment Advisor: | Neuberger Berman Management Inc. | |
Investment Objective: | seeks long-term capital growth. | |
| Neuberger Berman AMT Partners Division | ||
Invests in: | Neuberger Berman AMT Partners Portfolio – S Class | |
Investment Advisor: | Neuberger Berman Management Inc. | |
Investment Objective: | seeks growth of capital. | |
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| Neuberger Berman AMT Socially Responsive Division | ||
Invests in: | Neuberger Berman AMT Socially Responsive Portfolio – I Class | |
Investment Advisor: | Neuberger Berman Management Inc. | |
Investment Objective: | seeks long-term growth of capital by investing primarily in securities of companies that meet the fund’s financial criteria and social policy. | |
| Asset Allocation Division | ||
Invests in: | Principal Variable Contract Funds Asset Allocation Account — Class I | |
Investment Advisor: | Morgan Stanley Investment Management, Inc. (doing business as Van Kampen) through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to generate a total investment return consistent with the preservation of capital. The Account intends to pursue flexible investment policy in seeking to achieve this investment objective by investing primarily in equity and flexible-income securities. | |
| Bond & Mortgage Securities Division (f/k/a Bond Division) | ||
Invests in: | Principal Variable Contracts Funds Bond & Mortgage Securities Account – Class I (f/k/a Principal Variable Contracts Fund Bond Account – Class I) | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to provide as high a level of income as is consistent with preservation of capital and prudent investment risk. | |
| Diversified International Division | ||
Invests in: | Principal Variable Contracts Funds Diversified International Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital by investing in a portfolio of equity securities domiciled in any of the nations of the world. | |
| Equity Income Division (f/k/a Equity Income I Division) | ||
Invests in: | Principal Variable Contracts Funds Equity Income Account – Class I (f/k/a Principal Variable Contracts Fund Equity Income I Account – Class I) | |
Investment Advisor: | Edge Asset Management, Inc. through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek to provide a relatively high level of current income and long-term growth of income and capital. | |
| Government & High Quality Bond Division | ||
Invests in: | Principal Variable Contracts Funds Government & High Quality Bond Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek a high level of current income, liquidity and safety of principal. | |
| International Emerging Markets Division | ||
Invests in: | Principal Variable Contracts Funds International Emerging Markets Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks long-term growth of capital by investing in equity securities of issuers in emerging market countries. | |
63
| International SmallCap Division | ||
Invests in: | Principal Variable Contracts Funds International SmallCap Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital. The Account will attempt to achieve its objective by investing primarily in equity securities of non-U.S. companies with comparatively smaller market capitalizations. | |
| LargeCap Blend II Division (f/k/a LargeCap Blend Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap Blend II Account – Class I (f/k/a Principal Variable Contracts Fund LargeCap Blend Account – Class I) | |
Investment Advisor: | T. Rowe Price Associates through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks long-term growth of capital. | |
| LargeCap Growth Division (f/k/a Growth Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap Growth Account – Class I (f/k/a Principal Variable Contracts Fund Growth Account – Class I) | |
Investment Advisor: | Columbus Circle Investors through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek growth of capital. The Account seeks to achieve its objective through the purchase primarily of common stocks, but the Account may also invest in other securities. | |
| LargeCap Growth I Division (f/k/a Equity Growth Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap Growth I Account – Class I (f/k/a Principal Variable Contracts Fund Equity Growth Account – Class I) | |
Investment Advisor: | T. Rowe Price Associates through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to provide long-term capital appreciation by investing primarily in growth-oriented common stocks of medium and large capitalization U.S. corporations and, to a limited extent, foreign corporations. | |
| LargeCap S&P 500 Index Division (f/k/a LargeCap Stock Index Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap S&P 500 Index Account – Class I (f/k/a Principal Variable Contracts Fund LargeCap Stock Index Account – Class I) | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital by investing in stocks of large U.S. companies. The Account attempts to mirror the investment results of the Standard & Poor’s 500 Index. | |
| LargeCap Value Division (f/ka Capital Value Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap Value Account – Class I (f/k/a Principal Variable Contracts Fund Capital Value Account – Class I) | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to provide long-term capital appreciation and secondarily growth investment income. The Account seeks to achieve its investment objectives through the purchase primarily of common stocks, but the Account may invest in other securities. | |
| LargeCap Value II Division (f/ka Equity Value Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap Value II Account – Class I (f/k/a | |
64
| Principal Variable Contracts Fund Equity Value Account – Class I) | ||
Investment Advisor: | American Century Investment Management, Inc. through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek growth of capital. The Account seeks to achieve it objective through the purchase primarily of common stocks, but the Account may invest in other securities. | |
| LargeCap Value III Division (f/k/a LargeCap Value Division) | ||
Invests in: | Principal Variable Contracts Funds LargeCap Value III Account – Class I (f/k/a Principal Variable Contracts Fund LargeCap Value Account – Class I) | |
Investment Advisor: | AllianceBernstein, L.P. through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital | |
| MidCap Blend Division (f/k/a MidCap Division) | ||
Invests in: | Principal Variable Contracts Funds MidCap Blend Account – Class I (f/k/a Principal Variable Contracts Fund MidCap Account – Class I) | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to achieve capital appreciation by investing primarily in securities of emerging and other growth-oriented companies. | |
| MidCap Growth I Division (f/k/a MidCap Growth Division) | ||
Invests in: | Principal Variable Contracts Funds MidCap Growth I Account – Class I (f/k/a Principal Variable Contracts Fund MidCap Growth Account – Class I) | |
Investment Advisor: | Mellon Equity Associates, LLP through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital. The Account will attempt to achieve its objective by investing primarily in growth stocks of medium market capitalization companies. | |
| MidCap Value II Division (f/k/a MidCap Value Division) | ||
Invests in: | Principal Variable Contracts Funds MidCap Value II Account – Class I (f/k/a Principal Variable Contracts Fund MidCap Value Account – Class I) | |
Investment Advisor: | Neuberger Berman Management, Inc. & Jacob Levy Management, Inc. through a sub-advisory agreements with Principal Management Corporation | |
Investment Objective: | seeks long-term growth of capital by investing primarily in equity securities of companies with value characteristics and medium market capitalizations. | |
| Money Market Division | ||
Invests in: | Principal Variable Contracts Funds Money Market Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek as high a level of current income available from short-term securities as is considered consistent with preservation of principal and maintenance of liquidity by investing all of its assets in a portfolio of money market instruments. | |
| LifeTime 2010 Division | ||
Invests in: | Principal Variable Contracts Funds Principal LifeTime 2010 Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks a total return consisting of long-term growth of capital and current income by investing primarily in shares of other Principal Variable Contracts Funds accounts. | |
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| LifeTime 2020 Division | ||
Invests in: | Principal Variable Contracts Funds Principal LifeTime 2020 Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks a total return consisting of long-term growth of capital and current income by investing primarily in shares of other Principal Variable Contracts Funds accounts. | |
| LifeTime 2030 Division | ||
Invests in: | Principal Variable Contracts Funds Principal LifeTime 2030 Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks a total return consisting of long-term growth of capital and current income by investing primarily in shares of other Principal Variable Contracts Funds accounts. | |
| LifeTime 2040 Division | ||
Invests in: | Principal Variable Contracts Funds Principal LifeTime 2040 Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks a total return consisting of long-term growth of capital and current income by investing primarily in shares of other Principal Variable Contracts Funds accounts | |
| LifeTime 2050 Division | ||
Invests in: | Principal Variable Contracts Funds Principal LifeTime 2050 Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks a total return consisting of long-term growth of capital and current income by investing primarily in shares of other Principal Variable Contracts Funds accounts | |
| LifeTime Strategic Income Division | ||
Invests in: | Principal Variable Contracts Funds Principal LifeTime Strategic Income Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks high current income by investing primarily in shares of other Principal Variable Contracts Funds accounts. | |
| Real Estate Securities Division | ||
Invests in: | Principal Variable Contracts Funds Real Estate Securities Account – Class I | |
Investment Advisor: | Principal Real Estate Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek to generate a high total return. The Account will attempt to achieve its objective by investing primarily in equity securities of companies principally engaged in the real estate industry. | |
| Short-Term Bond Division | ||
Invests in: | Principal Variable Contracts Funds Short-Term Bond Account – Class I | |
Investment Advisor: | Principal Global Investors, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to provide current income. | |
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| SmallCap Growth II Division (f/k/a SmallCap Growth Division) | ||
Invests in: | Principal Variable Contracts Funds SmallCap Growth II Account – Class I (f/k/a Principal Variable Contracts Fund SmallCap Growth Account – Class I) | |
Investment Advisor: | Emerald Advisors, Inc. through a sub-advisory agreement; Essex Investment Management Company, LLC through a sub-advisory agreement; UBS Global Asset Management (Americas) Inc. through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital. The Account will attempt to achieve its objective by investing primarily in equity securities of growth companies with comparatively smaller market capitalizations. | |
| SmallCap Value I Division (f/k/a SmallCap Value Division) | ||
Invests in: | Principal Variable Contracts Funds SmallCap Value I Account – Class I (f/k/a Principal Variable Contracts Fund SmallCap Value Account – Class I) | |
Investment Advisor: | J.P. Morgan Investment Management, Inc, through a sub-advisory agreement and Mellon Equity Associates, LLP through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | to seek long-term growth of capital by investing primarily in equity securities of small companies with value characteristics and comparatively smaller market capitalizations. | |
| SAM Balanced Division | ||
Invests in: | Principal Variable Contracts Funds Strategic Asset Management Balanced Portfolio– Class I | |
Investment Advisor: | Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks to provide as high a level of total return (consisting of reinvested income and capital appreciation) as is consistent with reasonable risk | |
| SAM Conservative Balanced Division | ||
Invests in: | Principal Variable Contracts Funds Strategic Asset Management Conservative Balanced Portfolio– Class I | |
Investment Advisor: | Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks to provide a high level of total return (consisting of reinvestment of income and capital appreciation), consistent with a moderate degree of principal risk. | |
| SAM Conservative Growth Division | ||
Invests in: | Principal Variable Contracts Funds Strategic Asset Management Conservative Growth Portfolio– Class I | |
Investment Advisor: | Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks to provide long-term capital appreciation. | |
| SAM Flexible Income Division | ||
Invests in: | Principal Variable Contracts Funds Strategic Asset Management Flexible Income Portfolio– Class I | |
Investment Advisor: | Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks to provide a high level of total return (consisting of reinvestment of income with some capital appreciation). | |
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| SAM Strategic Growth Division | ||
Invests in: | Principal Variable Contracts Funds Strategic Asset Management Strategic Growth Portfolio– Class I | |
Investment Advisor: | Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks to provide long-term capital appreciation. | |
| West Coast Equity Division | ||
Invests in: | Principal Variable Contracts Funds West Coast Equity Account – Class I | |
Investment Advisor: | Edge Asset Management, LLC through a sub-advisory agreement with Principal Management Corporation | |
Investment Objective: | seeks long-term growth of capital and willing to accept the risks of investing in common stocks that may have greater risks than stocks of companies with lower potential for earnings growth. | |
| T. Rowe Price Blue Chip Growth Division | ||
Invests in: | T. Rowe Price Blue Chip Growth Portfolio — II | |
Investment Advisor: | T. Rowe Price Associates Inc. | |
Investment Objective: | seeks to provide long-term capital growth. | |
| T. Rowe Price Health Sciences Division | ||
Invests in: | T. Rowe Price Health Sciences Portfolio — II | |
Investment Advisor: | T. Rowe Price Associates Inc. | |
Investment Objective: | seeks long-term capital appreciation. | |
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TABLE OF CONTENTS OF THE SAI | ||||
| General Information and History | 3 | |||
| Independent Registered Public Accounting Firm | 3 | |||
| Principal Underwriter | 3 | |||
| Calculation of Performance Data | 3 | |||
| Taxation Under Certain Retirement Plans | 9 | |||
| Principal Life Insurance Company Separate Account B | ||||
| Report of Independent Registered Public Accounting Firm | 10 | |||
| Financial Statements | 12 | |||
| Principal Life Insurance Company | ||||
| Report of Independent Registered Public Accounting Firm | 10 | |||
| Consolidated Financial Statements | 12 |
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| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| AIM V.I. Basic Value | ||||||||||||||||
| 2007 | $ | 13.118 | $ | 13.154 | 0.28 | % | 69 | |||||||||
| 2006 | 11.733 | 13.118 | 11.80 | 49 | ||||||||||||
| 2005* | 11.307 | 11.733 | 3.76 | 5 | ||||||||||||
| AIM V.I. SmallCap Equity | ||||||||||||||||
| 2007 | 14.212 | 14.762 | 3.87 | 50 | ||||||||||||
| 2006 | 12.253 | 14.212 | 15.99 | 25 | ||||||||||||
| 2005* | 11.498 | 12.253 | 6.57 | 6 | ||||||||||||
| AllianceBernstein Small Cap Growth | ||||||||||||||||
| 2007 | 13.782 | 15.526 | 12.65 | 78 | ||||||||||||
| 2006 | 12.608 | 13.782 | 9.31 | 53 | ||||||||||||
| 2005* | 11.857 | 12.608 | 6.34 | 18 | ||||||||||||
| American Century VP Inflation Protection | ||||||||||||||||
| 2007 | 10.250 | 11.087 | 8.17 | 5,125 | ||||||||||||
| 2006 | 10.216 | 10.250 | 0.33 | 3,389 | ||||||||||||
| 2005* | 10.127 | 10.216 | 0.88 | 1,227 | ||||||||||||
| American Century VP Ultra | ||||||||||||||||
| 2007 | 10.779 | 12.863 | 19.33 | 3,530 | ||||||||||||
| 2006 | 11.297 | 10.779 | -4.58 | 2,714 | ||||||||||||
| 2005* | 10.962 | 11.297 | 3.06 | 911 | ||||||||||||
| American Century VP Vista | ||||||||||||||||
| 2007 | 13.441 | 18.553 | 38.03 | 87 | ||||||||||||
| 2006 | 12.485 | 13.441 | 7.66 | 39 | ||||||||||||
| 2005* | 11.980 | 12.485 | -2.41 | 71 | ||||||||||||
| Dreyfus Investment Portfolio Technology Growth | ||||||||||||||||
| 2007 | 12.176 | 13.760 | 13.01 | 38 | ||||||||||||
| 2006 | 11.851 | 12.176 | 2.75 | 25 | ||||||||||||
| 2005* | 10.954 | 11.851 | 8.18 | 10 | ||||||||||||
Fidelity VIP Contrafund® | ||||||||||||||||
| 2007 | 14.415 | 16.698 | 15.84 | 2,031 | ||||||||||||
| 2006 | 13.098 | 14.415 | 10.05 | 1,240 | ||||||||||||
| 2005* | 11.562 | 13.098 | 13.29 | 427 | ||||||||||||
| Fidelity VIP Equity-Income | ||||||||||||||||
| 2007 | 13.951 | 13.952 | 0.01 | 686 | ||||||||||||
| 2006 | 11.779 | 13.951 | 18.45 | 347 | ||||||||||||
| 2005* | 11.373 | 11.779 | 3.57 | 94 | ||||||||||||
| Fidelity VIP Growth | ||||||||||||||||
| 2007 | 12.048 | 15.069 | 25.08 | 376 | ||||||||||||
| 2006 | 11.447 | 12.048 | 5.26 | 204 | ||||||||||||
| 2005* | 10.809 | 11.447 | 5.90 | 59 | ||||||||||||
| Fidelity VIP Mid Cap | ||||||||||||||||
| 2007 | 15.600 | 17.768 | 13.90 | 321 | ||||||||||||
| 2006 | 14.053 | 15.600 | 11.02 | 198 | ||||||||||||
| 2005* | 12.492 | 14.053 | 12.50 | 36 | ||||||||||||
| Fidelity VIP Overseas | ||||||||||||||||
| 2007 | 16.003 | 18.498 | 15.59 | 2,013 | ||||||||||||
| 2006 | 13.759 | 16.003 | 16.32 | 1,503 | ||||||||||||
| 2005* | 11.951 | 13.759 | 15.13 | 581 | ||||||||||||
| Goldman Sachs VIT Mid Cap Value | ||||||||||||||||
| 2007 | 14.863 | 15.148 | 1.91 | 925 | ||||||||||||
| 2006 | 12.966 | 14.863 | 14.64 | 550 | ||||||||||||
| 2005* | 11.892 | 12.966 | 8.95 | 162 | ||||||||||||
| Goldman Sachs VIT Structured Small Cap Equity | ||||||||||||||||
| 2007 | 13.481 | 11.118 | -17.53 | 287 | ||||||||||||
| 2006 | 12.159 | 13.481 | 10.88 | 189 | ||||||||||||
| 2005* | 11.502 | 12.159 | 5.70 | 63 | ||||||||||||
| Lehman Brothers High Income Bond | ||||||||||||||||
| 2007 | 10.664 | 10.643 | -0.20 | 277 | ||||||||||||
| 2006 | 10.048 | 10.664 | 6.14 | 127 | ||||||||||||
| 2005* | 10.132 | 10.048 | -0.83 | 39 | ||||||||||||
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| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| Neuberger Berman AMT Fasciano | ||||||||||||||||
| 2007 | 11.578 | 11.492 | -0.74 | 163 | ||||||||||||
| 2006 | 11.138 | 11.578 | 3.96 | 104 | ||||||||||||
| 2005* | 10.677 | 11.138 | 4.32 | 35 | ||||||||||||
| Neuberger Berman AMT Partners | ||||||||||||||||
| 2007 | 15.148 | 16.356 | 7.97 | 327 | ||||||||||||
| 2006 | 13.666 | 15.148 | 10.86 | 209 | ||||||||||||
| 2005* | 12.298 | 13.666 | 11.12 | 40 | ||||||||||||
| Neuberger Berman Socially Responsive | ||||||||||||||||
| 2007 | 13.617 | 14.471 | 6.27 | 265 | ||||||||||||
| 2006 | 12.126 | 13.617 | 12.30 | 144 | ||||||||||||
| 2005* | 11.467 | 12.126 | 5.75 | 54 | ||||||||||||
| T. Rowe Price Blue Chip Growth | ||||||||||||||||
| 2007 | 12.494 | 13.879 | 11.08 | 87 | ||||||||||||
| 2006 | 11.571 | 12.494 | 7.98 | 51 | ||||||||||||
| 2005* | 10.774 | 11.571 | 7.40 | 34 | ||||||||||||
| T. Rowe Price Health Sciences | ||||||||||||||||
| 2007 | 13.623 | 15.836 | 16.24 | 181 | ||||||||||||
| 2006 | 12.722 | 13.623 | 7.09 | 113 | ||||||||||||
| 2005* | 10.642 | 12.722 | 19.54 | 34 | ||||||||||||
| Asset Allocation | ||||||||||||||||
| 2007 | 24.140 | 26.647 | 10.38 | 254 | ||||||||||||
| 2006 | 21.674 | 24.140 | 11.38 | 170 | ||||||||||||
| 2005* | 20.667 | 21.674 | 4.87 | 72 | ||||||||||||
| Bond & Mortgage Securities (f/k/a Bond) | ||||||||||||||||
| 2007 | 18.916 | 19.317 | 2.12 | 4,627 | ||||||||||||
| 2006 | 18.302 | 18.916 | 3.36 | 2,822 | ||||||||||||
| 2005* | 18.080 | 18.302 | 1.23 | 1,000 | ||||||||||||
| Diversified International | ||||||||||||||||
| 2007 | 27.066 | 31.029 | 14.64 | 1,077 | ||||||||||||
| 2006 | 21.417 | 27.066 | 26.38 | 612 | ||||||||||||
| 2005* | 18.156 | 21.417 | 17.96 | 184 | ||||||||||||
| Equity Income (f/k/a Equity Income I) | ||||||||||||||||
| 2007** | 10.378 | 11,013 | ||||||||||||||
| Government & High Quality Bond | ||||||||||||||||
| 2007 | 18.413 | 19.074 | 3.59 | 1,697 | ||||||||||||
| 2006 | 17.888 | 18.413 | 2.94 | 1,035 | ||||||||||||
| 2005* | 17.677 | 17.888 | 1.19 | 382 | ||||||||||||
| International Emerging Markets | ||||||||||||||||
| 2007 | 29.657 | 41.619 | 40.34 | 658 | ||||||||||||
| 2006 | 21.709 | 29.657 | 36.61 | 368 | ||||||||||||
| 2005* | 17.761 | 21.709 | 22.23 | 131 | ||||||||||||
| International SmallCap | ||||||||||||||||
| 2007 | 30.833 | 33.257 | 7.86 | 571 | ||||||||||||
| 2006 | 23.945 | 30.833 | 28.76 | 362 | ||||||||||||
| 2005* | 19.894 | 23.945 | 20.36 | 146 | ||||||||||||
| LargeCap Blend II (f/k/a LargeCap Blend) | ||||||||||||||||
| 2007 | 13.010 | 13.506 | 3.81 | 5,847 | ||||||||||||
| 2006 | 11.374 | 13.010 | 14.39 | 3,901 | ||||||||||||
| 2005* | 10.969 | 11.374 | 3.69 | 1,448 | ||||||||||||
| LargeCap Growth (f/k/a Growth) | ||||||||||||||||
| 2007 | 18.462 | 22.461 | 21.66 | 236 | ||||||||||||
| 2006 | 17.007 | 18.462 | 8.56 | 125 | ||||||||||||
| 2005* | 15.349 | 17.007 | 10.80 | 23 | ||||||||||||
| LargeCap Growth I (f/k/a Equity Growth) | ||||||||||||||||
| 2007 | 30.042 | 32.193 | 7.16 | 194 | ||||||||||||
| 2006 | 28.640 | 30.042 | 4.90 | 129 | ||||||||||||
| 2005* | 25.496 | 28.640 | 12.33 | 40 | ||||||||||||
| LargeCap S&P500 Index (f/k/a LargeCap Stock Index) | ||||||||||||||||
| 2007 | 10.573 | 10.978 | 3.83 | 1,455 | ||||||||||||
| 2006 | 9.263 | 10.573 | 14.14 | 891 | ||||||||||||
| 2005* | 8.972 | 9.263 | 3.25 | 350 | ||||||||||||
| LargeCap Value (f/k/a Capital Value) | ||||||||||||||||
| 2007 | 29.384 | 28.988 | -1.35 | 390 | ||||||||||||
| 2006 | 24.803 | 29.384 | 18.47 | 209 | ||||||||||||
| 2005* | 24.041 | 24.803 | 3.17 | 84 | ||||||||||||
71
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| LargeCap Value II (f/k/a Equity Value) | ||||||||||||||||
| 2007 | 13.425 | 13.082 | -2.56 | 299 | ||||||||||||
| 2006 | 11.370 | 13.425 | 18.08 | 194 | ||||||||||||
| 2005* | 11.202 | 11.370 | 1.49 | 92 | ||||||||||||
| LargeCap Value III (f/k/a LargeCap Value) | ||||||||||||||||
| 2007 | 14.699 | 13.977 | -4.92 | 4,943 | ||||||||||||
| 2006 | 12.245 | 14.699 | 20.05 | 3,113 | ||||||||||||
| 2005* | 11.936 | 12.245 | 2.59 | 1,132 | ||||||||||||
| MidCap Blend (f/k/a MidCap) | ||||||||||||||||
| 2007 | 38.425 | 41.530 | 8.08 | 1,220 | ||||||||||||
| 2006 | 34.060 | 38.425 | 12.81 | 815 | ||||||||||||
| 2005* | 31.455 | 34.060 | 8.28 | 319 | ||||||||||||
| MidCap Growth I (f/k/a MidCap Growth) | ||||||||||||||||
| 2007 | 12.513 | 13.689 | 9.40 | 332 | ||||||||||||
| 2006 | 11.555 | 12.513 | 8.29 | 185 | ||||||||||||
| 2005* | 10.382 | 11.555 | 11.30 | 67 | ||||||||||||
| MidCap Value II (f/k/a MidCap Value) | ||||||||||||||||
| 2007 | 16.981 | 16.596 | -2.27 | 2,027 | ||||||||||||
| 2006 | 15.179 | 16.981 | 11.87 | 1,276 | ||||||||||||
| 2005* | 14,153 | 15.179 | 7.25 | 498 | ||||||||||||
| Money Market | ||||||||||||||||
| 2007 | 13.786 | 14.280 | 3.58 | 894 | ||||||||||||
| 2006 | 13.342 | 13.786 | 3.34 | 371 | ||||||||||||
| 2005* | 13.173 | 13.342 | 1.28 | 166 | ||||||||||||
| Principal LifeTime 2010 | ||||||||||||||||
| 2007 | 12.603 | 12.910 | 2.44 | 2,499 | ||||||||||||
| 2006 | 11.363 | 12.603 | 10.91 | 1,605 | ||||||||||||
| 2005* | 10.886 | 11.363 | 4.67 | 904 | ||||||||||||
| Principal LifeTime 2020 | ||||||||||||||||
| 2007 | 13.212 | 13.682 | 3.56 | 8,959 | ||||||||||||
| 2006 | 11.616 | 13.212 | 13.74 | 5,303 | ||||||||||||
| 2005* | 11.020 | 11.616 | 5.41 | 1,657 | ||||||||||||
| Principal LifeTime 2030 | ||||||||||||||||
| 2007 | 13.168 | 13.780 | 4.65 | 1,138 | ||||||||||||
| 2006 | 11.612 | 13.168 | 13.41 | 677 | ||||||||||||
| 2005* | 11.037 | 11.612 | 5.21 | 190 | ||||||||||||
| Principal LifeTime 2040 | ||||||||||||||||
| 2007 | 13.409 | 14.107 | 5.21 | 555 | ||||||||||||
| 2006 | 11.793 | 13.409 | 13.71 | 278 | ||||||||||||
| 2005* | 11.180 | 11.793 | 5.48 | 93 | ||||||||||||
| Principal LifeTime 2050 | ||||||||||||||||
| 2007 | 13.482 | 14.195 | 5.29 | 271 | ||||||||||||
| 2006 | 11.820 | 13.482 | 14.06 | 168 | ||||||||||||
| 2005* | 11.208 | 11.820 | 5.46 | 27 | ||||||||||||
| Principal LifeTime Strategic Income | ||||||||||||||||
| 2007 | 12.101 | 12.204 | 0.85 | 1,246 | ||||||||||||
| 2006 | 11.113 | 12.101 | 8.90 | 851 | ||||||||||||
| 2005* | 10.650 | 11.113 | 4.35 | 446 | ||||||||||||
| Real Estate Securities | ||||||||||||||||
| 2007 | 36.380 | 29.571 | -18.72 | 414 | ||||||||||||
| 2006 | 26.965 | 36.380 | 34.92 | 286 | ||||||||||||
| 2005* | 22.385 | 26.965 | 20.46 | 81 | ||||||||||||
| SAM Balanced | ||||||||||||||||
| For the Period Ended December 31, 2007** | 10.314 | 2,332 | ||||||||||||||
| SAM Conservative Balanced | ||||||||||||||||
| For the Period Ended December 31, 2007** | 10.286 | 599 | ||||||||||||||
| SAM Conservative Growth | ||||||||||||||||
| For the Period Ended December 31, 2007** | 10.314 | 410 | ||||||||||||||
| SAM Flexible Income | ||||||||||||||||
| For the Period Ended December 31, 2007** | 10.222 | 109 | ||||||||||||||
| SAM Strategic Growth | ||||||||||||||||
| For the Period Ended December 31, 2007** | 10.308 | 401 | ||||||||||||||
| Short-Term Bond | ||||||||||||||||
| 2007 | 10.333 | 10.517 | 1.78 | 6,933 | ||||||||||||
| 2006 | 10.017 | 10.333 | 3.15 | 4,270 | ||||||||||||
| 2005* | 9.922 | 10.017 | 0.96 | 1,671 | ||||||||||||
| SmallCap Growth II (f/k/a SmallCap Growth) | ||||||||||||||||
| 2007 | 10.758 | 11.154 | 3.68 | 418 | ||||||||||||
| 2006 | 9.996 | 10.758 | 7.63 | 244 | ||||||||||||
| 2005* | 9.337 | 9.996 | 7.06 | 65 | ||||||||||||
72
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| SmallCap Value I (f/k/a SmallCap Value) | ||||||||||||||||
| 2007 | 25.988 | 23.221 | -10.65 | 1,639 | ||||||||||||
| 2006 | 22.179 | 25.988 | 17.18 | 950 | ||||||||||||
| 2005* | 20.935 | 22.179 | 5.94 | 362 | ||||||||||||
| West Coast Equity For the Period Ended December 31, 2007** | 10.360 | 92,800 | ||||||||||||||
| * | For the period from March 1, 2005, the date the Contract was first available, through December 31, 2005. | |
| ** | Commenced operation on January 12, 2007. |
| For Contracts with the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| AIM V.I. Basic Value | ||||||||||||||||
| 2007 | $ | 12.933 | 12.891 | -0.33 | % | 45 | ||||||||||
| 2006 | 11.638 | 12.933 | 11.14 | 33 | ||||||||||||
| 2005* | 11.272 | 11.638 | 3.25 | 8 | ||||||||||||
| AIM V.I. SmallCap Equity | ||||||||||||||||
| 2007 | 14.012 | 14.467 | 3.25 | 51 | ||||||||||||
| 2006 | 12.154 | 14.012 | 15.30 | 30 | ||||||||||||
| 2005* | 11.462 | 12.154 | 6.04 | 7 | ||||||||||||
| AllianceBernstein Small Cap Growth | ||||||||||||||||
| 2007 | 13.589 | 15.216 | 11.97 | 41 | ||||||||||||
| 2006 | 12.506 | 13.589 | 8.67 | 19 | ||||||||||||
| 2005* | 11.819 | 12.506 | 5.81 | 4 | ||||||||||||
| American Century VP Inflation Protection | ||||||||||||||||
| 2007 | 10.106 | 10.865 | 7.52 | 1,864 | ||||||||||||
| 2006 | 10.133 | 10.106 | -.027 | 1,377 | ||||||||||||
| 2005* | 10.095 | 10.133 | -0.37 | 560 | ||||||||||||
| American Century VP Ultra | ||||||||||||||||
| 2007 | 10.627 | 12.606 | 18.62 | 1,347 | ||||||||||||
| 2006 | 11.205 | 10.627 | -5.15 | 1,128 | ||||||||||||
| 2005* | 10.927 | 11.205 | 2.54 | 468 | ||||||||||||
| American Century VP Vista | ||||||||||||||||
| 2007 | 13.252 | 18.182 | 37.20 | 76 | ||||||||||||
| 2006 | 12.384 | 13.252 | 7.02 | 13 | ||||||||||||
| 2005* | 11.942 | 12.384 | 3.70 | 8 | ||||||||||||
| Dreyfus Investment Portfolio Technology Growth | ||||||||||||||||
| 2007 | 12.005 | 13.486 | 12.33 | 36 | ||||||||||||
| 2006 | 11.754 | 12.005 | 2.14 | 12 | ||||||||||||
| 2005* | 10.920 | 11.754 | 7.64 | 3 | ||||||||||||
Fidelity VIP Contrafund® | ||||||||||||||||
| 2007 | 14.212 | 16.364 | 15.14 | 540 | ||||||||||||
| 2006 | 12.991 | 14.212 | 14.51 | 380 | ||||||||||||
| 2005* | 11.525 | 12.992 | 12.72 | 101 | ||||||||||||
| Fidelity VIP Equity-Income | ||||||||||||||||
| 2007 | 13.570 | 13.489 | -0.59 | 180 | ||||||||||||
| 2006 | 11.526 | 13.570 | 17.74 | 144 | ||||||||||||
| 2005* | 11.184 | 11.526 | 3.06 | 56 | ||||||||||||
| Fidelity VIP Growth | ||||||||||||||||
| 2007 | 11.879 | 14.768 | 24.33 | 230 | ||||||||||||
| 2006 | 11.354 | 11.879 | 4.63 | 160 | ||||||||||||
| 2005* | 10.775 | 11.354 | 5.37 | 56 | ||||||||||||
| Fidelity VIP Mid Cap | ||||||||||||||||
| 2007 | 15.381 | 17.413 | 13.21 | 105 | ||||||||||||
| 2006 | 13.939 | 15.381 | 10.35 | 85 | ||||||||||||
| 2005* | 12.452 | 13.939 | 11.94 | 35 | ||||||||||||
| Fidelity VIP Overseas | ||||||||||||||||
| 2007 | 15.779 | 18.129 | 14.90 | 890 | ||||||||||||
| 2006 | 13.647 | 15.779 | 15.63 | 694 | ||||||||||||
| 2005* | 11.913 | 13.647 | 14.56 | 301 | ||||||||||||
| Goldman Sachs VIT Mid Cap Value | ||||||||||||||||
| 2007 | 14.655 | 14.845 | 1.30 | 416 | ||||||||||||
73
| For Contracts with the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| 2006 | 12.850 | 14.655 | 14.04 | 303 | ||||||||||||
| 2005* | 11.854 | 12.850 | 8.41 | 91 | ||||||||||||
| Goldman Sachs VIT Structured Small Cap Equity | ||||||||||||||||
| 2007 | 13.292 | 10.896 | -18.02 | 132 | ||||||||||||
| 2006 | 12.060 | 13.292 | 10.22 | 110 | ||||||||||||
| 2005* | 11.466 | 12.060 | 5.18 | 31 | ||||||||||||
| Lehman Brothers High Income Bond | ||||||||||||||||
| 2007 | 10.519 | 10.435 | -0.80 | 110 | ||||||||||||
| 2006 | 9.970 | 10.519 | 5.50 | 67 | ||||||||||||
| 2005* | 10.104 | 9.970 | -1.33 | 50 | ||||||||||||
| Neuberger Berman AMT Fasciano | ||||||||||||||||
| 2007 | 11.415 | 11.262 | -1.34 | 109 | ||||||||||||
| 2006 | 11.047 | 11.415 | 3.33 | 71 | ||||||||||||
| 2005* | 10.643 | 11.047 | 3.80 | 22 | ||||||||||||
| Neuberger Berman AMT Partners | ||||||||||||||||
| 2007 | 14.936 | 16.029 | 7.32 | 112 | ||||||||||||
| 2006 | 12.555 | 14.936 | 10.19 | 101 | ||||||||||||
| 2005* | 12.259 | 12.555 | 10.57 | 25 | ||||||||||||
| Neuberger Berman Socially Responsive | ||||||||||||||||
| 2007 | 13.426 | 14.182 | 5.63 | 60 | ||||||||||||
| 2006 | 12.027 | 13.426 | 11.63 | 42 | ||||||||||||
| 2005* | 11.431 | 12.028 | 5.22 | 9 | ||||||||||||
| T. Rowe Price Blue Chip Growth | ||||||||||||||||
| 2007 | 12.319 | 13.602 | 10.42 | 49 | ||||||||||||
| 2006 | 11.477 | 12.319 | 7.33 | 32 | ||||||||||||
| 2005* | 10.740 | 11.477 | 6.86 | 22 | ||||||||||||
| T. Rowe Price Health Sciences | ||||||||||||||||
| 2007 | 13.432 | 15.520 | 15.54 | 63 | ||||||||||||
| 2006 | 12.618 | 13.432 | 6.45 | 49 | ||||||||||||
| 2005* | 11.608 | 12.618 | 18.94 | 9 | ||||||||||||
| Asset Allocation | ||||||||||||||||
| 2007 | 23.273 | 25.535 | 9.72 | 149 | ||||||||||||
| 2006 | 21.021 | 23.273 | 10.72 | 99 | ||||||||||||
| 2005* | 20.145 | 21.021 | 4.35 | 25 | ||||||||||||
| Bond & Mortgage Securities (f/k/a Bond) | ||||||||||||||||
| 2007 | 18.237 | 18.511 | 1.50 | 1,650 | ||||||||||||
| 2006 | 17.751 | 18.237 | 2.74 | 1,157 | ||||||||||||
| 2005* | 17.623 | 17.751 | 0.73 | 474 | ||||||||||||
| Diversified International | ||||||||||||||||
| 2007 | 26.094 | 29.734 | 13.95 | 347 | ||||||||||||
| 2006 | 20.771 | 26.094 | 25.63 | 239 | ||||||||||||
| 2005* | 17.697 | 20.771 | 17.37 | 64 | ||||||||||||
| Equity Income (f/k/a Equity Income I) | ||||||||||||||||
| 2007** | 10.317 | 3,617 | ||||||||||||||
| Government & High Quality Bond | ||||||||||||||||
| 2007 | 17.751 | 18.278 | 2.97 | 576 | ||||||||||||
| 2006 | 17.349 | 17.751 | 2.33 | 349 | ||||||||||||
| 2005* | 17.230 | 17.349 | 0.69 | 133 | ||||||||||||
| International Emerging Markets | ||||||||||||||||
| 2007 | 28.591 | 39.883 | 39.49 | 317 | ||||||||||||
| 2006 | 21.055 | 28.591 | 35.79 | 214 | ||||||||||||
| 2005* | 17.311 | 21.055 | 21.62 | 64 | ||||||||||||
| International SmallCap | ||||||||||||||||
| 2007 | 29.725 | 31.869 | 7.21 | 244 | ||||||||||||
| 2006 | 23.223 | 29.725 | 28.00 | 170 | ||||||||||||
| 2005* | 19.391 | 23.223 | 19.76 | 68 | ||||||||||||
| LargeCap Blend II (f/k/a LargeCap Blend) | ||||||||||||||||
| 2007 | 12.654 | 13.057 | 3.19 | 2,224 | ||||||||||||
| 2006 | 11.129 | 12.654 | 13.70 | 1,642 | ||||||||||||
| 2005* | 10.787 | 11.129 | 3.17 | 664 | ||||||||||||
| LargeCap Growth (f/k/a Growth) | ||||||||||||||||
| 2007 | 17.798 | 21.523 | 20.93 | 113 | ||||||||||||
| 2006 | 16.494 | 17.798 | 7.91 | 77 | ||||||||||||
| 2005* | 14.960 | 16.494 | 10.25 | 11 | ||||||||||||
| LargeCap Growth I (f/k/a Equity Growth) | ||||||||||||||||
| 2007 | 28.962 | 30.849 | 6.52 | 91 | ||||||||||||
| 2006 | 27.776 | 28.962 | 4.27 | 65 | ||||||||||||
74
| For Contracts with the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| 2005* | 24.851 | 27.776 | 11.77 | 18 | ||||||||||||
| LargeCap S&P500 Index (f/k/a LargeCap Stock Index) | ||||||||||||||||
| 2007 | 10.193 | 10.520 | 3.21 | 589 | ||||||||||||
| 2006 | 8.984 | 10.193 | 13.46 | 446 | ||||||||||||
| 2005* | 8.745 | 8.984 | 2.73 | 166 | ||||||||||||
| LargeCap Value (f/k/a Capital Value) | ||||||||||||||||
| 2007 | 28.328 | 27.779 | -1.94 | 201 | ||||||||||||
| 2006 | 24.056 | 28.328 | 17.76 | 130 | ||||||||||||
| 2005* | 23.433 | 24.056 | 2.66 | 31 | ||||||||||||
| LargeCap Value II (f/k/a Equity Value) | ||||||||||||||||
| 2007 | 13.239 | 12.823 | -3.14 | 133 | ||||||||||||
| 2006 | 11.279 | 13.239 | 17.37 | 100 | ||||||||||||
| 2005* | 11.169 | 11.279 | 0.99 | 41 | ||||||||||||
| LargeCap Value III (f/k/a LargeCap Value) | ||||||||||||||||
| 2007 | 14.297 | 13.513 | -5.49 | 1,842 | ||||||||||||
| 2006 | 11.982 | 14.297 | 19.33 | 1,312 | ||||||||||||
| 2005* | 11.737 | 11.982 | 2.08 | 540 | ||||||||||||
| MidCap Blend (f/k/a MidCap) | ||||||||||||||||
| 2007 | 37.044 | 39.797 | 7.43 | 468 | ||||||||||||
| 2006 | 33.034 | 37.044 | 12.14 | 343 | ||||||||||||
| 2005* | 30.660 | 33.034 | 7.74 | 147 | ||||||||||||
| MidCap Growth I (f/k/a MidCap Growth) | ||||||||||||||||
| 2007 | 12.063 | 13.118 | 8.74 | 155 | ||||||||||||
| 2006 | 11.206 | 12.063 | 7.65 | 95 | ||||||||||||
| 2005* | 10.120 | 11.207 | 10.74 | 18 | ||||||||||||
| MidCap Value II (f/k/a MidCap Value) | ||||||||||||||||
| 2007 | 16.419 | 15.949 | -2.86 | 723 | ||||||||||||
| 2006 | 14.764 | 16.419 | 11.21 | 524 | ||||||||||||
| 2005* | 13.835 | 14.764 | 6.72 | 229 | ||||||||||||
| Money Market | ||||||||||||||||
| 2007 | 13.291 | 13.684 | 2.96 | 593 | ||||||||||||
| 2006 | 12.940 | 13.291 | 2.72 | 370 | ||||||||||||
| 2005* | 12.840 | 12.940 | 0.78 | 189 | ||||||||||||
| Principal LifeTime 2010 | ||||||||||||||||
| 2007 | 12.428 | 12.655 | 1.83 | 555 | ||||||||||||
| 2006 | 11.273 | 12.428 | 10.25 | 436 | ||||||||||||
| 2005* | 10.824 | 11.273 | 4.15 | 222 | ||||||||||||
| Principal LifeTime 2020 | ||||||||||||||||
| 2007 | 13.028 | 13.411 | 2.94 | 3,302 | ||||||||||||
| 2006 | 11.524 | 13.028 | 13.06 | 1,978 | ||||||||||||
| 2005* | 10.987 | 11.524 | 4.89 | 602 | ||||||||||||
| Principal LifeTime 2030 | ||||||||||||||||
| 2007 | 12.985 | 13.507 | 4.02 | 415 | ||||||||||||
| 2006 | 11.519 | 12.985 | 12.73 | 234 | ||||||||||||
| 2005* | 11.004 | 11.519 | 4.68 | 90 | ||||||||||||
| Principal LifeTime 2040 | ||||||||||||||||
| 2007 | 13.223 | 13.827 | 4.57 | 197 | ||||||||||||
| 2006 | 11.699 | 13.223 | 13.03 | 103 | ||||||||||||
| 2005* | 11.147 | 11.699 | 4.95 | 30 | ||||||||||||
| Principal LifeTime 2050 | ||||||||||||||||
| 2007 | 13.294 | 13.914 | 4.66 | 134 | ||||||||||||
| 2006 | 11.726 | 13.294 | 13.38 | 92 | ||||||||||||
| 2005* | 11.175 | 11.726 | 4.94 | 39 | ||||||||||||
| Principal LifeTime Strategic Income | ||||||||||||||||
| 2007 | 11.933 | 11.962 | 0.24 | 264 | ||||||||||||
| 2006 | 11.024 | 11.933 | 8.25 | 184 | ||||||||||||
| 2005* | 10.618 | 11.024 | 3.83 | 45 | ||||||||||||
| Real Estate Securities | ||||||||||||||||
| 2007 | 35.074 | 28.337 | -19.21 | 165 | ||||||||||||
| 2006 | 26.153 | 35.074 | 34.12 | 135 | ||||||||||||
| 2005* | 21.819 | 26.153 | 19.86 | 55 | ||||||||||||
| SAM Balanced For the Period Ended December 31, 2007** | 10.272 | 967 | ||||||||||||||
| SAM Conservative Balanced For the Period Ended December 31, 2007** | 10.244 | 184 | ||||||||||||||
| SAM Conservative Growth For the Period Ended December 31, 2007** | 10.273 | 175 | ||||||||||||||
| SAM Flexible Income For the Period Ended December 31, 2007*** | 10.181 | 15 | ||||||||||||||
75
| For Contracts with the Premium Payment Credit Rider | ||||||||||||||||
| Number of | ||||||||||||||||
| Accumulation Unit Value | Accumulation Units | |||||||||||||||
| Percentage | Outstanding | |||||||||||||||
| Beginning of | Change from | End of Period | ||||||||||||||
| Division | Period | End of Period | Prior Period | (in thousands) | ||||||||||||
| SAM Strategic Growth For the Period Ended December 31, 2007** | 10.267 | 207 | ||||||||||||||
| Short-Term Bond | ||||||||||||||||
| 2007 | 10.110 | 10.229 | 1.17 | 2,463 | ||||||||||||
| 2006 | 9.861 | 10.110 | 2.54 | 1,751 | ||||||||||||
| 2005* | 9.816 | 9.861 | 0.46 | 805 | ||||||||||||
| SmallCap Growth II (f/k/a SmallCap Growth) | ||||||||||||||||
| 2007 | 10.371 | 10.688 | 3.06 | 157 | ||||||||||||
| 2006 | 9.694 | 10.371 | 6.98 | 111 | ||||||||||||
| 2005* | 9.100 | 9.694 | 6.53 | 32 | ||||||||||||
| SmallCap Value I (f/k/a SmallCap Value) | ||||||||||||||||
| 2007 | 25.054 | 22.252 | -11.18 | 551 | ||||||||||||
| 2006 | 21.511 | 25.054 | 16.48 | 373 | ||||||||||||
| 2005* | 20.405 | 21.511 | 5.42 | 152 | ||||||||||||
| West Coast Equity For the Period Ended December 31, 2007** | 10.318 | 44 | ||||||||||||||
| * | For the period from March 1, 2005, the date the Contract was first available, through December 31, 2005. | |
| ** | Commenced operation on January 12, 2007. |
76
| NOTE: | For the purpose of the following examples, a partial annuitization has the same effect as a partial surrender and both are referred to as a withdrawal in the following examples. |
| • | the client is age 62. | |
| • | initial premium payment = $100,000. | |
| • | the withdrawal benefit bases prior to partial surrender = $100,000. | |
| • | the remaining withdrawal benefit bases prior to partial surrender = $100,000. | |
| • | Investment Back (7%) withdrawal benefit payment = $7,000. | |
| • | For Life (5%) withdrawal benefit payment = $5,000. |
| • | a 5% GMWB bonus is credited to the withdrawal benefit bases. The credit is $100,000 x 0.05 = $5,000. | ||
| • | there is no GMWB Step-Up because the client is not eligible until the fifth contract anniversary following the rider effective date. | ||
| • | Investment Back: |
| - | the new Investment Back withdrawal benefit base is $100,000 + $5,000 = $105,000; | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 + $5,000 = $105,000; and | ||
| - | the new Investment Back withdrawal benefit payment is $105,000 x 0.07 = $7,350. |
| • | For Life: |
| - | the new For Life withdrawal benefit base is $100,000 + $5,000 = $105,000; | ||
| - | the new For Life remaining withdrawal benefit base is base is $100,000 + $5,000 = $105,000; and | ||
| - | the new For Life withdrawal benefit payment is $105,000 x 0.05 = $5,250. |
| • | no withdrawals are taken. | |
| • | the client makes a premium payment of $50,000. |
| • | a 5% GMWB bonus is credited to the withdrawal benefit bases. The credit is ($100,000 + $50,000) x 0.05 = $7,500. | ||
| • | there is no GMWB Step-Up because the client is not eligible until the fifth contract anniversary following the rider effective date. | ||
| • | Investment Back: |
| - | the new Investment Back withdrawal benefit base is $100,000 + $50,000 + $7,500 = $157,500; | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 + $50,000 + $7,500 = $157,500; and | ||
| - | the new Investment Back withdrawal benefit payment is $157,500 x 0.07 = $11,025. |
| • | For Life: |
| - | the new For Life withdrawal benefit base is $100,000 + $50,000 + $7,500 = $157,500; | ||
| - | the new For Life remaining withdrawal benefit base is $100,000 + $50,000 + $7,500 = $157,500; and | ||
| - | the new For Life withdrawal benefit payment is $157,500 x 0.05 = $7,875. |
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| • | Since a withdrawal was taken in contract year one, no GMWB bonus is credited. | ||
| • | there is no GMWB Step-Up because the client is not eligible until the fifth contract anniversary following the rider effective date. | ||
| • | Investment Back: |
| - | the Investment Back withdrawal benefit base remains the same ($100,000); | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 - $5,000 = $95,000; and | ||
| - | the Investment Back withdrawal benefit payment for the next contract year remains the same ($100,000 x 0.07 = $7,000). |
| • | For Life |
| - | the For Life withdrawal benefit base remains the same ($100,000); | ||
| - | the new For Life remaining withdrawal benefit base is $100,000 - $5,000 = $95,000; and | ||
| - | the For Life withdrawal benefit payment for the next contract year remains the same ($100,000 x 0.05 = $5,000). |
| • | a 5% GMWB bonus is credited to the withdrawal benefit bases. The credit is $100,000 x 0.05 = $5,000. | ||
| • | there is no GMWB Step-Up because the client is not eligible until the fifth contract anniversary following the rider effective date. | ||
| • | Investment Back: |
| - | the new Investment Back withdrawal benefit base is $100,000 + $5,000 = $105,000; | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 + $5,000 = $105,000; and | ||
| - | the new Investment Back withdrawal benefit payment is $105,000 x 0.07 = $7,350. |
| • | For Life: |
| - | the new For Life withdrawal benefit base is $100,000 + $5,000 = $105,000; | ||
| - | the new For Life remaining withdrawal benefit base is base is $100,000 + $5,000 = $105,000; and | ||
| - | the new For Life withdrawal benefit payment is $105,000 x 0.05 = $5,250. |
| • | Since a withdrawal was taken in contract year two, no GMWB bonus is credited. | ||
| • | there is no GMWB Step-Up because the client is not eligible until the fifth contract anniversary following the rider effective date. | ||
| • | Investment Back: |
| - | the Investment Back withdrawal benefit base remains the same ($105,000); | ||
| - | the new Investment Back remaining withdrawal benefit base is $105,000 - $5,000 = $100,000; and | ||
| - | the Investment Back withdrawal benefit payment for the next contract year remains the same ($7,350). |
| • | For Life |
| - | the For Life withdrawal benefit base remains the same ($105,000); | ||
| - | the new For Life remaining withdrawal benefit base is $105,000 - $5,000 = $100,000; and | ||
| - | the For Life withdrawal benefit payment for the next contract year remains the same ($5,250). |
| • | Since a withdrawal was taken in contract year two, no GMWB bonus is credited. | ||
| • | there is no GMWB Step-Up because because the client is not eligible until the fifth contract anniversary following the rider effective date. | ||
| • | Investment Back: |
| - | the Investment Back withdrawal benefit base remains the same ($105,000); | ||
| - | the Investment Back remaining withdrawal benefit base remains the same ($100,000); and | ||
| - | the Investment Back withdrawal benefit payment for the next contract year remains the same ($7,350). |
| • | For Life |
| - | the For Life withdrawal benefit base remains the same ($105,000); | ||
| - | the For Life remaining withdrawal benefit base remains the same ($100,000); and | ||
| - | the For Life withdrawal benefit payment for the next contract year remains the same ($5,250). |
78
| If the accumulated value on the fifth | ||||||
| contract anniversary is: | $90,000 | $110,000 | ||||
| Investment Back | ||||||
| Prior to step-up | ||||||
| Withdrawal Benefit Base | = $100,000 | = $100,00 | ||||
| Withdrawal Benefit Payment | = $100,000 x 0.07 = $7,000 | = $100,000 x 0.07 = $7,000 | ||||
| Remaining Withdrawal Benefit Base | = $75,000 | = $75,000 | ||||
| After step-up | ||||||
| Withdrawal Benefit Base | = $90,000 | = $110,000 | ||||
| Withdrawal Benefit Payment | = $90,000 x 0.07 = $6,300 | = $110,000 x 0.07 = $7,700 | ||||
| Remaining Withdrawal Benefit Base | = $90,000 | = $110,000 | ||||
| For Life | ||||||
| Prior to step-up | ||||||
| Withdrawal Benefit Base | = $100,000 | = $100,000 | ||||
| Withdrawal Benefit Payment | = $100,000 x 0.05 = $5,000 | = $100,000 x 0.05 = $5,000 | ||||
| Remaining withdrawal Benefit Base | = $75,000 | = $75,000 | ||||
| After step-up | ||||||
| Withdrawal Benefit Base | = $90,000 | = $110,000 | ||||
| Withdrawal Benefit Payment | = $90,000 x 0.05 = $4,500 | = $110,000 x 0.05 = $5,500 | ||||
| Remaining Withdrawal Benefit Base | = $90,000 | = $110,000 |
| • | the client is age 62. |
| • | the initial premium payment is $100,000. |
| • | the Investment Back and For Life withdrawal benefit bases prior to partial surrender = $100,000. |
| • | the remaining withdrawal benefit bases prior to withdrawal = $100,000. |
| • | Investment Back (7%) withdrawal benefit payment = $7,000. |
| • | For Life (5%) withdrawal benefit payment = $5,000 |
| • | Withdrawal taken = $8,000. |
| - | excess amount under the Investment Back withdrawal option is $1,000; and | ||
| - | excess amount under the For Life withdrawal option is $3,000. |
| a. | is $1,000 (the amount of the excess withdrawal); and | ||
| b. | is $1,204.82 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| 2. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $7,000); and | ||
| 3. | is the Investment Back withdrawal benefit base prior to the adjustment for the excess amount ($100,000). |
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| a. | is $3,000 (the amount of the excess withdrawal); and | ||
| b. | is $3,529.41 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the For Life withdrawal benefit payment available prior to the withdrawal ($3,000); | ||
| 2. | is the accumulated value after the For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $5,000); and | ||
| 3. | is the For Life withdrawal benefit base prior to the adjustment for the excess amount ($100,000). |
| a. | is $7,000 (the actual amount withdrawn that does not exceed the Investment Back withdrawal benefit payment); and | ||
| b. | is $1,120.48 (a proportionate reduction for the excess withdrawal). The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $1,000 (the amount of the excess withdrawal); and | ||
| 2. | is $1,120.48 (the result of (i. divided by ii.) multiplied by iii.) where; |
| i. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| ii. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $7,000); and | ||
| iii. | is the Investment Back remaining withdrawal benefit base after the Investment Back withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $7,000). |
| a. | is $5,000 (the actual amount withdrawn that does not exceed the For Life withdrawal benefit payment); and | ||
| b. | is $3,352.94 (a proportionate reduction for the excess withdrawal). The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $3,000 (the amount of the excess withdrawal); and | ||
| 2. | is $3,352.94 (the result of (i. divided by ii.) multiplied by iii.) where; |
| i. | is the amount of the withdrawal greater than the For Life withdrawal benefit payment available prior to the withdrawal ($3,000); | ||
| ii. | is the accumulated value after the For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $5,000); and | ||
| iii. | is the For Life remaining withdrawal benefit base after the For Life withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $5,000). |
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| a. | is $1,000 (the amount of the excess withdrawal); and | ||
| b. | is $970.87 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| 2. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 minus $7,000); and | ||
| 3. | is the Investment Back withdrawal benefit base prior to the adjustment for the excess amount ($100,000) |
| a. | is $3,000 (the amount of the excess withdrawal); and | ||
| b. | is $2,857.14 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the For Life withdrawal benefit payment available prior to the withdrawal ($3,000); | ||
| 2. | is the accumulated value after the For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 minus $5,000); and | ||
| 3. | is the For Life withdrawal benefit base prior to the adjustment for the excess amount ($100,000). |
| a. | is $7,000 (the actual amount withdrawn that does not exceed the Investment Back withdrawal benefit payment ); and | ||
| b. | is $1,000 (a proportionate reduction for the excess withdrawal). The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $1,000 (the amount of the excess withdrawal); and | ||
| 2. | is $902.91 (the result of (i. divided by ii.) multiplied by iii.) where: |
| i. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| ii. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 - $7,000); and | ||
| iii. | is the Investment Back remaining withdrawal benefit base after the Investment Back withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $7,000). |
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| a. | is $5,000 — the actual amount withdrawn that does not exceed the For Life withdrawal benefit payment ; and | ||
| b. | is $3,000 — a proportionate reduction for the excess withdrawal. The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $3,000 (the amount of the excess withdrawal); and | ||
| 2. | is $2,714.28 (the result of (i. divided by ii.) multiplied by iii.) where: |
| i. | is the amount of the withdrawal greater than the For Life withdrawal benefit payment available prior to the withdrawal ($3,000); | ||
| ii. | is the accumulated value after the For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 - $5,000); and | ||
| iii. | is the For Life remaining withdrawal benefit base after the For Life withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $5,000). |
82
| NOTE: | For the purpose of the following examples, a partial annuitization has the same effect as a partial surrender and both are referred to as a withdrawal in the following examples. |
| • | the client is age 62 and the client’s spouse is age 60 on the rider effective date. |
| • | initial premium payment = $100,000. |
| • | the withdrawal benefit bases prior to partial surrender = $100,000. |
| • | the remaining withdrawal benefit bases prior to partial surrender = $100,000. |
| • | Investment Back (7%) withdrawal benefit payment = $7,000. |
| • | “Single Life” For Life (5%) withdrawal benefit payment = $5,000, if withdrawals start prior to the client attaining age 70. |
| • | “Joint Life” For Life (4.5%) withdrawal benefit payment = $4,500, if withdrawals start prior to the spouse attaining age 70. |
| • | a 7% GMWB bonus is credited to the withdrawal benefit base. The credit is $100,000 x 0.07 = $7,000. | ||
| • | there is no GMWB Step-Up because the withdrawal benefit bases after the bonus is credited are larger than the Contract’s accumulated value. | ||
| • | Investment Back: |
| - | the new Investment Back withdrawal benefit base is $100,000 + 7,000 = $107,000; | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 + 7,000 = $107,000; and | ||
| - | the new Investment Back withdrawal benefit payment is $107,000 x 0.07 = $7,490. |
| • | For Life: |
| - | the new For Life withdrawal benefit base is $100,000 + 7,000 = $107,000; | ||
| - | the new For Life remaining withdrawal benefit base is base is $100,000 + 7,000 = $107,000; and | ||
| - | the new “Single Life” For Life withdrawal benefit payment is $107,000 x 0.05 = $5,350. |
| • | no withdrawals are taken and no For Life withdrawal benefit payment election has been designated. Because the client has not made a For Life withdrawal benefit payment election, we automatically calculate the For Life withdrawal benefit payment as “Single Life”. | |
| • | the client makes a premium payment of $50,000. |
| • | a 7% GMWB bonus is credited to the withdrawal benefit base. The credit is ($100,000 + $50,000) x 0.07 = $10,500. | ||
| • | there is no GMWB Step-Up because the withdrawal benefit bases after the bonus is credited are larger than the Contract’s accumulated value. | ||
| • | Investment Back: |
| - | the new Investment Back withdrawal benefit base is $100,000 + $50,000 + $10,500 = $160,500; | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 + $50,000 + $10,500 = $160,500; and | ||
| - | the new Investment Back withdrawal benefit payment is $160,500 x 0.07 = $11,235. |
| • | For Life: |
83
| - | the new For Life withdrawal benefit base is $100,000 + $50,000 + $10,500 = $160,500; | ||
| - | the new For Life remaining withdrawal benefit base is $100,000 + $50,000 + $10,500 = $160,500; and | ||
| - | the new “Single Life” For Life withdrawal benefit payment is $160,500 x 0.05 = $8,025. |
| • | Since a withdrawal was taken in contract year one, no GMWB bonus is credited. | ||
| • | there is no GMWB Step-Up because the withdrawal benefit bases after the bonus is credited are larger than the Contract’s accumulated value. | ||
| • | Investment Back: |
| - | the withdrawal benefit base remains the same ($100,000); | ||
| - | the new remaining withdrawal benefit base is $100,000 - $4,500 = $95,500; and | ||
| - | the withdrawal benefit payment for the next contract year remains the same ($100,000 x 0.07 = $7,000). |
| • | For Life |
| - | the For Life withdrawal benefit base remains the same ($100,000); | ||
| - | the new For Life remaining withdrawal benefit base is $100,000 - $4,500 = $95,500; and | ||
| - | the “Joint Life” For Life withdrawal benefit payment for the next contract year remains the same ($100,000 x 0.045 = $4,500). |
| • | a 7% GMWB bonus is credited to the withdrawal benefit bases. The credit is $100,000 x 0.07 = $7,000. | ||
| • | there is no GMWB Step-Up because the withdrawal benefit bases after the bonus is credited are larger than the Contract’s accumulated value. | ||
| • | Investment Back: |
| - | the new Investment Back withdrawal benefit base is $100,000 + 7,000 = $107,000; | ||
| - | the new Investment Back remaining withdrawal benefit base is $100,000 + 7,000 = $107,000; and | ||
| - | the new Investment Back withdrawal benefit payment is $107,000 x 0.07 = $7,490. |
| • | For Life: |
| - | the new For Life withdrawal benefit base is $100,000 + 7,000 = $107,000; | ||
| - | the new For Life remaining withdrawal benefit base is base is $100,000 + 7,000 = $107,000; and | ||
| - | the new “Single Life” For Life withdrawal benefit payment is $107,000 x 0.05 = $5,350. |
| • | Since a withdrawal was taken in contract year two, no GMWB bonus is credited. | ||
| • | there is no GMWB Step-Up because the withdrawal benefit bases are larger than the Contract’s accumulated value. | ||
| • | Investment Back: |
| - | the Investment Back withdrawal benefit base remains the same ($107,000); | ||
| - | the new Investment Back remaining withdrawal benefit base is $107,000 - $4,500 = $102,500; and | ||
| - | the Investment Back withdrawal benefit payment for the next contract year remains the same ($107,000 x 0.07 = $7,490). |
| • | For Life |
| - | the For Life withdrawal benefit base remains the same ($107,000); | ||
| - | the new For Life remaining withdrawal benefit base is $107,000 - $4,500 = $102,500; and | ||
| - | the “Joint Life” For Life withdrawal benefit payment for the next contract year is $107,000 x 0.045 = $4,815. |
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| • | Since a withdrawal was taken in contract year two, no GMWB bonus is credited. | ||
| • | there is no GMWB Step-Up because the withdrawal benefit bases are larger than the Contract’s accumulated value. | ||
| • | Investment Back: |
| - | the Investment Back withdrawal benefit base remains the same ($107,000); | ||
| - | the Investment Back remaining withdrawal benefit base remains the same ($102,500); and | ||
| - | the Investment Back withdrawal benefit for the next contract year remains the same ($107,000 x 0.07 = $7,490). |
| • | For Life |
| - | the For Life withdrawal benefit base remains the same ($107,000); | ||
| - | the For Life remaining withdrawal benefit base remains the same ($102,500); and | ||
| - | the “Joint Life” For Life withdrawal benefit payment for the next contract year remains the same ($107,000 x 0.045 = $4,815). |
| If the accumulated value on the second | ||||||||||
| contract anniversary is: | $95,000 | $110,000 | ||||||||
| Investment Back | ||||||||||
| Prior to step-up | ||||||||||
| Withdrawal Benefit Base | = $100,000 | = $100,00 | ||||||||
| Withdrawal Benefit Payment | = $100,000 x 0.07 = $7,000 | = $100,000 x 0.07 = $7,000 | ||||||||
| Remaining Withdrawal Benefit Base | = $90,000 | = $90,000 | ||||||||
| After step-up | ||||||||||
| Withdrawal Benefit Base | = $100,000 | = $110,000 | ||||||||
| Withdrawal Benefit Payment | = $100,000x0.07 = $7,000 | = $110,000 x 0.07 = $7,700 | ||||||||
| Remaining Withdrawal Benefit Base | = $90,000 | = $110,000 | ||||||||
| For Life (“Single Life”) | ||||||||||
| Prior to step-up | ||||||||||
| Withdrawal Benefit Base | = $100,000 | = $100,000 | ||||||||
| Withdrawal Benefit Payment | = $100,000 x 0.05 = $5,000 | = $100,000 x 0.05 = $5,000 | ||||||||
| Remaining withdrawal Benefit Base | = $90,000 | = $90,000 | ||||||||
| After step-up | ||||||||||
| Withdrawal Benefit Base | = $100,000 | = $110,000 | ||||||||
| Withdrawal Benefit Payment | = $100,000 x 0.05 = $5,000 | = $110,000 x 0.05 = $5,500 | ||||||||
| Remaining Withdrawal Benefit Base | = $95,000 | = $110,000 | ||||||||
| • | the client is age 62 and elected “Single Life” For Life withdrawal benefit payments at the first withdrawal and therefore, locks-in the “Single Life” For Life withdrawal benefit payment percentage at 5%. |
| • | the initial premium payment is $100,000. |
| • | the withdrawal benefit bases prior to partial surrender = $100,000. |
| • | the remaining withdrawal benefit bases prior to partial surrender = $100,000. |
| • | Investment Back (7%) withdrawal benefit payment = $7,000. |
| • | “Single Life” For Life (5%) withdrawal benefit payment = $5,000 |
| • | Withdrawal taken = $8,000. |
| - | excess amount under the Investment Back withdrawal option is $1,000; and | ||
| - | excess amount under the For Life withdrawal option is $3,000. |
85
| a. | is $1,000 (the amount of the excess withdrawal); and | ||
| b. | is $1,204.82 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment remaining prior to the withdrawal ($1,000); | ||
| 2. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $7,000); and | ||
| 3. | is the Investment Back withdrawal benefit base prior to the adjustment for the excess amount ($100,000). |
| a. | is $3,000 (the amount of the excess withdrawal); and | ||
| b. | is $3,529.41 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the “Single Life” For Life withdrawal benefit payment remaining prior to the withdrawal ($3,000); | ||
| 2. | is the accumulated value after the “Single Life” For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $5,000); and | ||
| 3. | is the For Life withdrawal benefit base prior to the adjustment for the excess amount ($100,000). |
| a. | is $7,000 (the actual amount withdrawn that does not exceed the Investment Back withdrawal benefit payment); and | ||
| b. | is $1,120.48 (a proportionate reduction for the excess withdrawal). The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $1,000 (the amount of the excess withdrawal); and | ||
| 2. | is $1,120.48 (the result of (i. divided by ii.) multiplied by iii.) where; |
| i. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| ii. | is the accumulated value after the Investment Back withdrawal benefit payement is deducted but prior to the withdrawal of the excess amount ($90,000 - $7,000); and | ||
| iii. | is the Investment Back remaining withdrawal benefit base after the Investment Back withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $7,000). |
| a. | is $5,000 (the actual amount withdrawn that does not exceed the “Single Life” For Life withdrawal benefit payment); and |
86
| b. | is $3,352.94 (a proportionate reduction for the excess withdrawal). The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $3,000 (the amount of the excess withdrawal); and | ||
| 2. | is $3,352.94 (the result of (i. divided by ii.) multiplied by iii.) where; |
| i. | is the amount of the withdrawal greater than the “Single Life” For Life withdrawal benefit payment remaining prior to the withdrawal ($3,000); | ||
| ii. | is the accumulated value after the “Single Life” For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($90,000 - $5,000); and | ||
| iii. | is the For Life remaining withdrawal benefit base after the “Single Life” For Life withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $5,000). |
| a. | is $1,000 (the amount of the excess withdrawal); and | ||
| b. | is $970.87 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| 2. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 minus $7,000); and | ||
| 3. | is the Investment Back withdrawal benefit base prior to the adjustment for the excess amount ($100,000) |
| a. | is $3,000 (the amount of the excess withdrawal); and | ||
| b. | is $2,857.14 (the result of (1. divided by 2.) multiplied by 3.) where: |
| 1. | is the amount of the withdrawal greater than the “Single Life” For Life withdrawal benefit payment available prior to the withdrawal ($3,000); | ||
| 2. | is the accumulated value after the “Single Life” For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 minus $5,000); and | ||
| 3. | is the For Life withdrawal benefit base prior to the adjustment for the excess amount ($100,000). |
87
| a. | is $7,000 (the actual amount withdrawn that does not exceed the Investment Back withdrawal benefit payment); and | ||
| b. | is $1,000 (a proportionate reduction for the excess withdrawal). The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $1,000 (the amount of the excess withdrawal); and | ||
| 2. | is $902.91 (the result of (i. divided by ii.) multiplied by iii.) where: |
| i. | is the amount of the withdrawal greater than the Investment Back withdrawal benefit payment available prior to the withdrawal ($1,000); | ||
| ii. | is the accumulated value after the Investment Back withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 - $7,000); and | ||
| iii. | is the Investment Back remaining withdrawal benefit base after the Investment Back withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $7,000). |
| a. | is $5,000 - the actual amount withdrawn that does not exceed the “Single Life” For Life withdrawal benefit payment; and | ||
| b. | is $3,000 - a proportionate reduction for the excess withdrawal. The amount of the proportionate reduction is the greater of 1. or 2. where: |
| 1. | is $3,000 (the amount of the excess withdrawal); and | ||
| 2. | is $2,714.28 (the result of (i. divided by ii.) multiplied by iii.) where: |
| i. | is the amount of the withdrawal greater than the “Single Life” For Life withdrawal benefit payment available prior to the withdrawal ($3,000); | ||
| ii. | is the accumulated value after the “Single Life” For Life withdrawal benefit payment is deducted but prior to the withdrawal of the excess amount ($110,000 - $5,000); and | ||
| iii. | is the For Life remaining withdrawal benefit base after the “Single Life” For Life withdrawal benefit payment is deducted but prior to the adjustment for the excess amount ($100,000 - $5,000). |
88
| • | one of the GMWB Select Models as described below; | |
| • | one of the GMWB Self-Build Models as described below; | |
| • | the Principal LifeTime 2010 Account; | |
| • | the Principal LifeTime 2020 Account; | |
| • | the Principal LifeTime Strategic Income Account; | |
| • | Strategic Asset Management Balanced Portfolio; | |
| • | Strategic Asset Management Conservative Balanced Portfolio; or | |
| • | Strategic Asset Management Flexible Income Portfolio. |
| Names | Model A | Model B | Model C | |||||||||
| Short Term Fixed Income | 30 | % | 20 | % | 10 | % | ||||||
| Short-Term Bond | 30 | % | 20 | % | 10 | % | ||||||
| Fixed Income | 40 | % | 30 | % | 20 | % | ||||||
Bond(n/k/a Bond and Mortgage Securities) | 15 | % | 15 | % | 10 | % | ||||||
| Government & High Quality Bond | 15 | % | 10 | % | N/A | |||||||
| American Century VP Inflation Protection | 10 | % | 5 | % | 10 | % | ||||||
| Large US Equity | 20 | % | 25 | % | 30 | % | ||||||
89
| Names | Model A | Model B | Model C | |||||||||
Large Cap Blend | 10 | % | 10 | % | 10 | % | ||||||
LargeCap Blend(n/k/a LargeCap Blend II) | 10 | % | 10 | % | 10 | % | ||||||
Large Cap Value | 0 | % | 5 | % | 10 | % | ||||||
LargeCap Value(n/k/a LargeCap Value III) | N/A | 5 | % | 10 | % | |||||||
Large Cap Growth | 10 | % | 10 | % | 10 | % | ||||||
| American Century Ultra | 10 | % | 10 | % | 10 | % | ||||||
| Small/Mid US Equity | 0 | % | 5 | % | 15 | % | ||||||
MidCap Value | 0 | % | 0 | % | 5 | % | ||||||
MidCap Value(n/k/a MidCap Value II) | NA | NA | 5 | % | ||||||||
MidCap Blend | 0 | % | 5 | % | 5 | % | ||||||
MidCap(n/k/a MidCap Blend) | N/A | 5 | % | 5 | % | |||||||
Small Cap | 0 | % | 0 | % | 5 | % | ||||||
SmallCap Value(n/k/a SmallCap Value I) | N/A | N/A | 5 | % | ||||||||
| Balanced/Asset Allocation | 10 | % | 15 | % | 20 | % | ||||||
Equity Income I(n/k/a Equity Income) | 10 | % | 15 | % | 20 | % | ||||||
| International Equity | 0 | % | 5 | % | 5 | % | ||||||
| Fidelity Overseas | NA | 5 | % | 5 | % | |||||||
| Model | Model | Model | ||||||||||
| Names | A | B | C | |||||||||
| Short Term Fixed Income | 30 | % | 20 | % | 10 | % | ||||||
| Short-Term Bond | ||||||||||||
| Money Market | ||||||||||||
| Fixed Income | 40 | % | 30 | % | 20 | % | ||||||
Bond(n/k/a Bond and Mortgage Securities) | ||||||||||||
| Government & High Quality Bond | ||||||||||||
| American Century VP Inflation Protection | ||||||||||||
| Large US Equity | 20 | % | 25 | % | 30 | % | ||||||
Large Cap Blend | 10 | % | 10 | % | 10 | % | ||||||
90
| Model | Model | Model | ||||||||||
| Names | A | B | C | |||||||||
LargeCap Blend(n/k/a LargeCap Blend II) | ||||||||||||
LargeCap Stock Index(n/k/a LargeCap S&P 500 Index) | ||||||||||||
| Neuberger Berman AMT Socially Responsive | ||||||||||||
Large Cap Value | 0 | % | 5 | % | 10 | % | ||||||
Capital Value(n/k/a LargeCap Value) | ||||||||||||
Equity Value(n/k/a LargeCap Value II) | ||||||||||||
LargeCap Value(n/k/a LargeCap Value III) | ||||||||||||
Large Cap Growth | 10 | % | 10 | % | 10 | % | ||||||
| American Century Ultra | ||||||||||||
Fidelity Contrafund® | ||||||||||||
| T. Rowe Price Health Sciences | ||||||||||||
| Small/Mid US Equity | 0 | % | 5 | % | 15 | % | ||||||
MidCap Value | 0 | % | 0 | % | 5 | % | ||||||
MidCap Value(n/k/a MidCap Value II) | ||||||||||||
MidCap Blend | 0 | % | 5 | % | 5 | % | ||||||
MidCap(n/k/a MidCap Blend) | ||||||||||||
Small Cap | 0 | % | 0 | % | 5 | % | ||||||
SmallCap Value(n/k/a SmallCap Value I) | ||||||||||||
| Balanced/Asset Allocation | 10 | % | 15 | % | 20 | % | ||||||
| Asset Allocation | ||||||||||||
Equity Income I(n/k/a Equity Income) | ||||||||||||
| LifeTime 2010 | ||||||||||||
| LifeTime 2020 | ||||||||||||
| LifeTime Strategic Income | ||||||||||||
| International Equity | 0 | % | 5 | % | 5 | % | ||||||
| Diversified International | ||||||||||||
| Fidelity Overseas | ||||||||||||
91
| 3 | ||||
| 3 | ||||
| 3 | ||||
| 3 | ||||
| 7 | ||||
| 9 |
2
| 2007 | 2006 | 2005 | ||
| received/retained | received/retained | received/retained | ||
| $24,201,879.36/$0 | $22,386,910/$0 | $12,169,228/$0 |
3
| Yield for the Period Ended December 31, 2007 | ||||||||
| For Contracts: | 7-day annualized yield | 7-day effective yield | ||||||
| without a surrender charge or a purchase payment credit rider | 2.87 | % | 2.92 | % | ||||
| with a surrender charge but without a purchase payment credit rider | – | 3.13 | % | – | 3.08 | % | ||
| without a surrender charge but with a purchase payment credit rider | 2.27 | % | 2.33 | % | ||||
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||||
| with Surrender Charge | ||||||||||||||||||
| Division | Effective Date | One Year | Five Years | Ten Years | Since Inception | |||||||||||||
| AIM V.I. Basic Value | September 10, 2001 | -5.75 | 10.44 | 4.39 | ||||||||||||||
| AIM V.I. SmallCap Equity | August 29, 2003 | -2.16 | 10.51 | |||||||||||||||
| AllianceBernstein Small Cap Growth | August 15, 1996 | 6.62 | 15.94 | 2.16 | 3.85 | |||||||||||||
| American Century VP Inflation Protection | December 31, 2002 | 2.14 | 2.77 | 2.77 | ||||||||||||||
| American Century VP Ultra | October 5, 2001 | 32.00 | 20.20 | 12.05 | ||||||||||||||
| American Century VP Vista | May 1, 2001 | 13.30 | 8.58 | 1.50 | ||||||||||||||
| Dreyfus Investment Portfolio Technology Growth | August 31, 1999 | 6.98 | 11.21 | -3.27 | ||||||||||||||
| Fidelity VIP Contrafund® | January 3, 1995 | 9.81 | 15.77 | 8.91 | 12.76 | |||||||||||||
| Fidelity VIP Equity-Income | November 3, 1986 | -6.02 | 11.30 | 5.12 | 9.17 | |||||||||||||
| Fidelity VIP Growth | October 31, 1986 | 19.05 | 12.40 | 5.20 | 9.71 | |||||||||||||
| Fidelity VIP MidCap | December 28, 1998 | 7.87 | 19.55 | 17.19 | ||||||||||||||
| Fidelity VIP Overseas | January 28, 1987 | 9.56 | 19.70 | 6.56 | 6.70 | |||||||||||||
| Goldman Sachs VIT Mid Cap Value | May 1, 1998 | -4.12 | 15.09 | 9.02 | ||||||||||||||
| Goldman Sachs VIT Structured Small Cap Equity | February 13, 1998 | -23.56 | 9.20 | 3.67 | ||||||||||||||
| Lehman Brothers High Income Bond Portfolio | September 15, 2004 | -6.23 | 0.67 | |||||||||||||||
| Neuberger Berman AMT Fasciano | July 12, 2002 | -6.77 | 6.91 | 6.16 | ||||||||||||||
| Neuberger Berman AMT Partners | March 22, 1994 | 1.94 | 16.57 | 5.41 | 9.89 | |||||||||||||
| Neuberger Berman Socially Responsive | February 18, 1999 | 0.24 | 12.91 | 5.83 | ||||||||||||||
| T. Rowe Price Blue Chip Growth | December 29, 2000 | 5.05 | 10.73 | 1.07 | ||||||||||||||
| T. Rowe Price Health Sciences | December 29, 2000 | 10.21 | 15.91 | 4.38 | ||||||||||||||
| Asset Allocation | June 1, 1994 | 4.35 | 10.10 | 5.51 | 7.43 | |||||||||||||
| Bond & Mortgage Securities (f/k/a Bond) | December 18, 1987 | -3.91 | 2.11 | 3.64 | 5.93 | |||||||||||||
| Diversified International | May 2, 1994 | 8.61 | 22.25 | 7.60 | 8.57 | |||||||||||||
| Equity Income (f/k/a Equity Income I) | April 28, 1998 | -2.75 | 14.27 | 8.34 | ||||||||||||||
4
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||||
| with Surrender Charge | ||||||||||||||||||
| Division | Effective Date | One Year | Five Years | Ten Years | Since Inception | |||||||||||||
| Government & High Quality Bond | April 9, 1987 | -2.44 | 1.38 | 3.80 | 5.65 | |||||||||||||
| International Emerging Markets | October 24, 2000 | 34.31 | 37.02 | 20.91 | ||||||||||||||
| International SmallCap | May 1, 1998 | 1.83 | 27.96 | 13.05 | ||||||||||||||
| LargeCap Blend II (f/k/a LargeCap Blend) | May 1, 2002 | -2.22 | 9.88 | 5.39 | ||||||||||||||
| LargeCap Growth (f/k/a Growth) | May 2, 1994 | 15.63 | 14.14 | 2.11 | 6.04 | |||||||||||||
| LargeCap Growth I (f/k/a Equity Growth) | June 1, 1994 | 1.13 | 9.43 | 3.04 | 8.95 | |||||||||||||
| LargeCap S&P 500 Index (f/k/a LargeCap Stock Index) | May 3, 1999 | -2.20 | 10.60 | 0.83 | ||||||||||||||
| LargeCap Value (f/k/a Capital Value) | May 13, 1970 | -7.38 | 10.68 | 3.37 | 10.20 | |||||||||||||
| LargeCap Value II (f/k/a Equity Value) | August 30, 2004 | -8.59 | 7.33 | |||||||||||||||
| LargeCap Value III (f/k/a LargeCap Value) | May 1, 2002 | -10.95 | 10.46 | 6.15 | ||||||||||||||
| MidCap Blend (f/k/a MidCap) | December 18, 1987 | 2.05 | 14.54 | 8.25 | 12.43 | |||||||||||||
| MidCap Growth I (f/k/a MidCap Growth) | May 1, 1998 | 3.37 | 14.93 | 3.16 | ||||||||||||||
| MidCap Value II (f/k/a MidCap Value) | May 3, 1999 | -8.30 | 13.87 | 10.36 | ||||||||||||||
| Money Market | March 18, 1983 | -2.45 | 0.83 | 2.14 | ||||||||||||||
| Principal LifeTime 2010 | August 30, 2004 | -3.59 | 6.89 | |||||||||||||||
| Principal LifeTime 2020 | August 30, 2004 | -2.47 | 8.82 | |||||||||||||||
| Principal LifeTime 2030 | August 30, 2004 | -1.38 | 9.06 | |||||||||||||||
| Principal LifeTime 2040 | August 30, 2004 | -0.82 | 9.86 | |||||||||||||||
| Principal LifeTime 2050 | August 30, 2004 | -0.74 | 10.07 | |||||||||||||||
| Principal LifeTime Strategic Income | August 30, 2004 | -5.18 | 5.04 | |||||||||||||||
| Real Estate Securities | May 1, 1998 | -24.75 | 17.63 | 11.79 | ||||||||||||||
| Short-Term Bond | May 1, 2003 | -4.25 | 0.47 | |||||||||||||||
| SmallCap Growth II (f/k/a SmallCap Growth) | May 1, 1998 | -2.35 | 12.76 | 1.09 | ||||||||||||||
| SmallCap Value I (f/k/a SmallCap Value) | May 1, 1998 | -16.68 | 14.31 | 9.02 | ||||||||||||||
| SAM Balanced | June 3, 1997 | 1.28 | 9.63 | 7.57 | 7.54 | |||||||||||||
| SAM Conservative Balanced | April 23, 1998 | 0.23 | 7.30 | 4.44 | ||||||||||||||
| SAM Conservative Growth | June 3, 1997 | 1.92 | 11.71 | 8.20 | 8.15 | |||||||||||||
| SAM Flexible Income | September 9, 1997 | -1.24 | 5.29 | 5.47 | 5.49 | |||||||||||||
| SAM Strategic Growth | June 3, 1997 | 2.21 | 13.07 | 8.95 | 9.06 | |||||||||||||
| West Coast Equity | April 28, 1998 | 1.35 | 14.61 | 10.17 | ||||||||||||||
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||||
| without Surrender Charge | ||||||||||||||||||
| Division | Effective Date | One Year | Five Years | Ten Years | Since Inception | |||||||||||||
| AIM V.I. Basic Value | September 10, 2001 | 0.25 | 10.84 | 4.39 | ||||||||||||||
| AIM V.I. SmallCap Equity | August 29, 2003 | 3.84 | 11.00 | |||||||||||||||
| AllianceBernstein Small Cap Growth | August 15, 1996 | 12.62 | 16.27 | 2.16 | 3.85 | |||||||||||||
| American Century VP Inflation Protection | December 31, 2002 | 8.14 | 3.30 | 3.30 | ||||||||||||||
| American Century VP Ultra | October 5, 2001 | 38.00 | 20.49 | 12.05 | ||||||||||||||
| American Century VP Vista | May 1, 2001 | 19.30 | 9.01 | 1.50 | ||||||||||||||
| Dreyfus Investment Portfolio Technology Growth | August 31, 1999 | 12.98 | 11.60 | -3.27 | ||||||||||||||
| Fidelity VIP Contrafund® | January 3, 1995 | 15.81 | 16.10 | 8.91 | 12.76 | |||||||||||||
| Fidelity VIP Equity-Income | November 3, 1986 | -0.02 | 11.69 | 5.12 | 9.17 | |||||||||||||
| Fidelity VIP Growth | October 31, 1986 | 25.05 | 12.77 | 5.20 | 9.71 | |||||||||||||
| Fidelity VIP MidCap | December 28, 1998 | 13.87 | 19.84 | 17.19 | ||||||||||||||
| Fidelity VIP Overseas | January 28, 1987 | 15.56 | 20.00 | 6.56 | 6.70 | |||||||||||||
| Goldman Sachs VIT Mid Cap Value | May 1, 1998 | 1.88 | 15.43 | 9.02 | ||||||||||||||
| Goldman Sachs VIT Structured Small Cap Equity | February 13, 1998 | -17.56 | 9.62 | 3.67 | ||||||||||||||
| Lehman Brothers High Income Bond Portfolio | September 15, 2004 | -0.23 | 1.85 | |||||||||||||||
| Neuberger Berman AMT Fasciano | July 12, 2002 | -0.77 | 7.37 | 6.44 | ||||||||||||||
| Neuberger Berman AMT Partners | March 22, 1994 | 7.94 | 16.89 | 5.41 | 9.89 | |||||||||||||
| Neuberger Berman Socially Responsive | February 18, 1999 | 6.24 | 13.28 | 5.83 | ||||||||||||||
| T. Rowe Price Blue Chip Growth | December 29, 2000 | 11.05 | 11.13 | 1.07 | ||||||||||||||
| T. Rowe Price Health Sciences | December 29, 2000 | 16.21 | 16.24 | 4.38 | ||||||||||||||
| Asset Allocation | June 1, 1994 | 10.35 | 10.51 | 5.51 | 7.43 | |||||||||||||
| Bond & Mortgage Securities (f/k/a Bond) | December 18, 1987 | 2.09 | 2.66 | 3.64 | 5.93 | |||||||||||||
| Diversified International | May 2, 1994 | 14.61 | 22.52 | 7.60 | 8.57 | |||||||||||||
| Equity Income (f/k/a Equity Income I) | April 28, 1998 | 3.25 | 14.62 | 8.34 | ||||||||||||||
| Government & High Quality Bond | April 9, 1987 | 3.56 | 1.94 | 3.80 | 5.65 | |||||||||||||
| International Emerging Markets | October 24, 2000 | 40.31 | 37.19 | 20.91 | ||||||||||||||
| International SmallCap | May 1, 1998 | 7.83 | 28.18 | 13.05 | ||||||||||||||
| LargeCap Blend II (f/k/a LargeCap Blend) | May 1, 2002 | 3.78 | 10.29 | 5.66 | ||||||||||||||
| LargeCap Growth (f/k/a Growth) | May 2, 1994 | 21.63 | 14.49 | 2.11 | 6.04 | |||||||||||||
| LargeCap Growth I (f/k/a Equity Growth) | June 1, 1994 | 7.13 | 9.85 | 3.04 | 8.95 | |||||||||||||
| LargeCap S&P 500 Index (f/k/a LargeCap Stock Index) | May 3, 1999 | 3.80 | 11.00 | 0.83 | ||||||||||||||
| LargeCap Value (f/k/a Capital Value) | May 13, 1970 | -1.38 | 11.08 | 3.37 | 10.20 | |||||||||||||
| LargeCap Value II (f/k/a Equity Value) | August 30, 2004 | -2.59 | 8.33 | |||||||||||||||
| LargeCap Value III (f/k/a LargeCap Value) | May 1, 2002 | -4.95 | 10.86 | 6.42 | ||||||||||||||
| MidCap Blend (f/k/a MidCap) | December 18, 1987 | 8.05 | 14.88 | 8.25 | 12.43 | |||||||||||||
| MidCap Growth I (f/k/a MidCap Growth) | May 1, 1998 | 9.37 | 15.27 | 3.16 | ||||||||||||||
5
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||||
| without Surrender Charge | ||||||||||||||||||
| Division | Effective Date | One Year | Five Years | Ten Years | Since Inception | |||||||||||||
| MidCap Value II (f/k/a MidCap Value) | May 3, 1999 | -2.30 | 14.23 | 10.36 | ||||||||||||||
| Money Market | March 18, 1983 | 3.55 | 1.40 | 2.14 | ||||||||||||||
| Principal LifeTime 2010 | August 30, 2004 | 2.41 | 7.90 | |||||||||||||||
| Principal LifeTime 2020 | August 30, 2004 | 3.53 | 9.80 | |||||||||||||||
| Principal LifeTime 2030 | August 30, 2004 | 4.62 | 10.03 | |||||||||||||||
| Principal LifeTime 2040 | August 30, 2004 | 5.18 | 10.81 | |||||||||||||||
| Principal LifeTime 2050 | August 30, 2004 | 5.26 | 11.02 | |||||||||||||||
| Principal LifeTime Strategic Income | August 30, 2004 | 0.82 | 6.10 | |||||||||||||||
| Real Estate Securities | May 1, 1998 | -18.75 | 17.94 | 11.79 | ||||||||||||||
| Short-Term Bond | May 1, 2003 | 1.75 | 1.10 | |||||||||||||||
| SmallCap Growth II (f/k/a SmallCap Growth) | May 1, 1998 | 3.65 | 13.13 | 1.09 | ||||||||||||||
| SmallCap Value I (f/k/a SmallCap Value) | May 1, 1998 | -10.68 | 14.66 | 9.02 | ||||||||||||||
| SAM Balanced | June 3, 1997 | 7.28 | 10.05 | 7.57 | 7.54 | |||||||||||||
| SAM Conservative Balanced | April 23, 1998 | 6.23 | 7.75 | 4.44 | ||||||||||||||
| SAM Conservative Growth | June 3, 1997 | 7.92 | 12.09 | 8.20 | 8.15 | |||||||||||||
| SAM Flexible Income | September 9, 1997 | 4.76 | 5.78 | 5.47 | 5.49 | |||||||||||||
| SAM Strategic Growth | June 3, 1997 | 8.21 | 13.43 | 8.95 | 9.06 | |||||||||||||
| West Coast Equity | April 28, 1998 | 7.35 | 14.96 | 10.17 | ||||||||||||||
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||||
| with Surrender Charge | ||||||||||||||||||
| Division | Effective Date | One Year | Five Years | Ten Years | Since Inception | |||||||||||||
| AIM V.I. Basic Value | September 10, 2001 | -8.36 | 9.63 | 3.50 | ||||||||||||||
| AIM V.I. SmallCap Equity | August 29, 2003 | -4.78 | 9.67 | |||||||||||||||
| AllianceBernstein Small Cap Growth | August 15, 1996 | 3.94 | 15.12 | 1.55 | 3.22 | |||||||||||||
| American Century VP Inflation Protection | December 31, 2002 | -0.51 | 1.95 | 1.95 | ||||||||||||||
| American Century VP Ultra | October 5, 2001 | 29.17 | 19.37 | 11.20 | ||||||||||||||
| American Century VP Vista | May 1, 2001 | 10.59 | 7.77 | 0.61 | ||||||||||||||
| Dreyfus Investment Portfolio Technology Growth | August 31, 1999 | 4.30 | 10.40 | -3.85 | ||||||||||||||
| Fidelity VIP Contrafund® | January 3, 1995 | 7.11 | 14.95 | 8.26 | 12.08 | |||||||||||||
| Fidelity VIP Equity-Income | November 3, 1986 | -8.62 | 10.48 | 4.49 | 8.52 | |||||||||||||
| Fidelity VIP Growth | October 31, 1986 | 16.30 | 11.58 | 4.57 | 9.05 | |||||||||||||
| Fidelity VIP MidCap | December 28, 1998 | 5.18 | 18.72 | 16.48 | ||||||||||||||
| Fidelity VIP Overseas | January 28, 1987 | 6.87 | 18.88 | 5.92 | 6.06 | |||||||||||||
| Goldman Sachs VIT Mid Cap Value | May 1, 1998 | -6.73 | 14.27 | 8.37 | ||||||||||||||
| Goldman Sachs VIT Structured Small Cap Equity | February 13, 1998 | -26.05 | 8.39 | 3.05 | ||||||||||||||
| Lehman Brothers High Income Bond Portfolio | September 15, 2004 | -8.83 | -0.26 | |||||||||||||||
| Neuberger Berman AMT Fasciano | July 12, 2002 | -9.37 | 6.10 | 5.37 | ||||||||||||||
| Neuberger Berman AMT Partners | March 22, 1994 | -0.71 | 15.75 | 4.77 | 9.23 | |||||||||||||
| Neuberger Berman Socially Responsive | February 18, 1999 | -2.40 | 12.10 | 5.19 | ||||||||||||||
| T. Rowe Price Blue Chip Growth | December 29, 2000 | 2.39 | 9.92 | 0.33 | ||||||||||||||
| T. Rowe Price Health Sciences | December 29, 2000 | 7.51 | 15.09 | 3.64 | ||||||||||||||
| Asset Allocation | June 1, 1994 | 1.69 | 9.29 | 4.88 | 6.78 | |||||||||||||
| Bond & Mortgage Securities (f/k/a Bond) | December 18, 1987 | -6.53 | 1.29 | 3.02 | 5.30 | |||||||||||||
| Diversified International | May 2, 1994 | 5.92 | 21.42 | 6.96 | 7.92 | |||||||||||||
| Equity Income (f/k/a Equity Income I) | April 28, 1998 | -5.38 | 13.45 | 7.69 | ||||||||||||||
| Government & High Quality Bond | April 9, 1987 | -5.06 | 0.56 | 3.17 | 5.02 | |||||||||||||
| International Emerging Markets | October 24, 2000 | 31.46 | 36.14 | 20.14 | ||||||||||||||
| International SmallCap | May 1, 1998 | -0.82 | 27.11 | 12.37 | ||||||||||||||
| LargeCap Blend II (f/k/a LargeCap Blend) | May 1, 2002 | -4.84 | 9.07 | 4.60 | ||||||||||||||
| LargeCap Growth (f/k/a Growth) | May 2, 1994 | 12.90 | 13.33 | 1.50 | 5.41 | |||||||||||||
| LargeCap Growth I (f/k/a Equity Growth) | June 1, 1994 | -1.52 | 8.62 | 2.42 | 8.29 | |||||||||||||
| LargeCap S&P 500 Index (f/k/a LargeCap Stock Index) | May 3, 1999 | -4.82 | 9.79 | 0.22 | ||||||||||||||
| LargeCap Value (f/k/a Capital Value) | May 13, 1970 | -9.97 | 9.87 | 2.75 | 9.54 | |||||||||||||
| LargeCap Value II (f/k/a Equity Value) | August 30, 2004 | -11.17 | 6.40 | |||||||||||||||
| LargeCap Value III (f/k/a LargeCap Value) | May 1, 2002 | -13.52 | 9.65 | 5.37 | ||||||||||||||
| MidCap Blend (f/k/a MidCap) | December 18, 1987 | -0.60 | 13.72 | 7.60 | 11.76 | |||||||||||||
| MidCap Growth I (f/k/a MidCap Growth) | May 1, 1998 | 0.71 | 14.11 | 2.54 | ||||||||||||||
| MidCap Value II (f/k/a MidCap Value) | May 3, 1999 | -10.89 | 13.06 | 9.70 | ||||||||||||||
| Money Market | March 18, 1983 | -5.07 | 0.01 | 1.53 | ||||||||||||||
| Principal LifeTime 2010 | August 30, 2004 | -6.20 | 5.97 | |||||||||||||||
| Principal LifeTime 2020 | August 30, 2004 | -5.09 | 7.90 | |||||||||||||||
| Principal LifeTime 2030 | August 30, 2004 | -4.01 | 8.14 | |||||||||||||||
| Principal LifeTime 2040 | August 30, 2004 | -3.46 | 8.93 | |||||||||||||||
| Principal LifeTime 2050 | August 30, 2004 | -3.37 | 9.15 | |||||||||||||||
| Principal LifeTime Strategic Income | August 30, 2004 | -7.79 | 4.12 | |||||||||||||||
| Real Estate Securities | May 1, 1998 | -27.24 | 16.81 | 11.12 | ||||||||||||||
| Short-Term Bond | May 1, 2003 | -6.86 | -0.36 | |||||||||||||||
| SmallCap Growth II (f/k/a SmallCap Growth) | May 1, 1998 | -4.97 | 11.95 | 0.48 | ||||||||||||||
| SmallCap Value I (f/k/a SmallCap Value) | May 1, 1998 | -19.21 | 13.49 | 8.36 | ||||||||||||||
6
| For Contracts without the Premium Payment Credit Rider | ||||||||||||||||||
| with Surrender Charge | ||||||||||||||||||
| Division | Effective Date | One Year | Five Years | Ten Years | Since Inception | |||||||||||||
| SAM Balanced | June 3, 1997 | -1.36 | 8.82 | 6.93 | 6.89 | |||||||||||||
| SAM Conservative Balanced | April 23, 1998 | -2.41 | 6.49 | 3.81 | ||||||||||||||
| SAM Conservative Growth | June 3, 1997 | -0.73 | 10.89 | 7.56 | 7.50 | |||||||||||||
| SAM Flexible Income | September 9, 1997 | -3.87 | 4.48 | 4.84 | 4.86 | |||||||||||||
| SAM Strategic Growth | June 3, 1997 | -0.44 | 12.27 | 8.30 | 8.41 | |||||||||||||
| West Coast Equity | April 28, 1998 | -1.29 | 13.80 | 9.51 | ||||||||||||||
| IRA – Maximum Annual Contribution | ||||
| Year | Individual IRA | Individual IRA + Spousal IRA | ||
| 2007 | $4,000 | $ 8,000 | ||
| 2008 | $5,000 | $10,000 | ||
| Deductibility of Traditional IRA Contributions for Active Participants | ||||||||||||||||||||
| Married Individuals (Filing Jointly) | Single Individual | |||||||||||||||||||
| Limited | No | Limited | No | |||||||||||||||||
| Year | Deduction | Deduction | Year | Deduction | Deduction | |||||||||||||||
| 2007 | $ | 83,000 | $ | 103,000 | 2007 | $ | 52,000 | $ | 62,000 | |||||||||||
| 2008 | $ | 85,000 | $ | 105,000 | 2008 | $ | 53,000 | $ | 63,000 | |||||||||||
| 1) | The lesser of maximum annual contribution or 100% of compensation, over | |
| 2) | The IRA deductible contributions made with respect to the individual. |
7
| Savings Incentive Match Plan for Employees (SIMPLE IRA) | ||||
| Year | Elective Deferral | Catch-up Contribution | ||
| 2007 and beyond | $10,500 | $2,500 | ||
8
| Roth IRA – Maximum Annual Contribution | ||||
| Year | Individual Roth IRA | Catch-up Contribution | ||
| 2007 | $4,000 | $1,000 | ||
| 2008 | $5,000 | $1,000 | ||
| Modified Adjusted Gross Income | ||||
| Single | Married Filing Jointly | Roth IRA Contribution | ||
| $101,000 of less | $159,000 | Full Contribution | ||
| $101,000-$116,000 | $159,000-$169,000 | Partial Contribution* | ||
| $116,000 & over | $169,000 & over | No Contribution | ||
| * | Those entitled to only a partial contribution should check with a tax advisor to determine the allowable contribution. |
9
| (a) | Financial Statements are included in the Registration Statement: |
| (i) | Part A — | ||
| Condensed Financial Information for the three years ended December 31, 2007 and for the period ended December 31, 2004. | |||
| (ii) | Part B — | ||
| Principal Life Insurance Company Separate Account B: |
| – Report of Independent Auditors. | |||
| – Statement of Assets and Liabilities, December 31, 2007 | |||
| – Statement of Operations for the year ended December 31, 2006 Statements of Changes in Net Assets for the years ended December 31, 2007, 2006 and 2005. | |||
| – Notes to Financial Statements | |||
| Principal Life Insurance Company: |
| – Report of Independent Auditors. | |||
| – Consolidated Statements of Financial Position, December 31, 2007, 2006 and 2005. | |||
| – Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005. | |||
| – Consolidated Statements of Financial Position, December 31, 2007, 2006 and 2005. | |||
| – Consolidated Statements of Stockholder’s Equity for the years ended December 31, 2007, 2006 and 2005. | |||
| – Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005. | |||
| – Notes to Consolidated Financial Statements. | |||
| (iii) | Part C — | ||
| Principal Life Insurance Company |
| – Report of Independent Auditors on Schedules | |||
| – Schedule I — Summary of Investments — Other Than Investments in Related Parties As December 31, 2007 | |||
| – Schedule III — Supplementary Insurance Information As of December 31, 2007, 2006 and 2005 and for each of the years then ended | |||
| – Schedule IV — Reinsurance As of December 31, 2007, 2006 and 2005 and for each of the years then ended | |||
| All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. |
| (b) | Exhibits: |
| (1) | Resolution of Board of Directors of the Depositor (filed with the Commission on 06/072004) | ||
| (3a) | Distribution Agreement (filed with the Commission on 01/04/05) | ||
| (3b) | Selling Agreement (filed with the Commission on 06/07/2004) | ||
| (4a) | Form of Variable Annuity Contract (filed with the Commission on 06/07/2004) | ||
| (4b) | Amendment to Enhanced Death Benefit Rider (filed with the Commission on 04/27/2006) | ||
| (4c) | Amendment to Fixed Account Endorsement (filed with the Commission on 04/27/2006) | ||
| (4d) | Amendment to Fixed DCA Account Endorsement (filed with the Commission on 04/27/2006) | ||
| (4e) | Amendment to GMWB Rider (filed with the Commission on 04/27/2006) | ||
| (4f) | Amendment to Contract Data Page (filed with the Commission on 04/27/2006) | ||
| (4g) | Amendment to Partial Annuitization Endorsement (filed with the Commission on 04/27/2006) | ||
| (4h) | Amendment to Premium Payment Credit Rider (filed with the Commission on 04/27/2006) | ||
| (4i) | Form of Specimen Guaranteed Minimum Withdrawal Benefit 2 Rider (filed herewith as Exhibit 99.4I) | ||
| (5) | Form of Variable Annuity Application (filed with the Commission on 06/07/2004) | ||
| (6a) | Articles of Incorporation of the Depositor (filed with the Commission on 06/07/2004) | ||
| (6b) | Bylaws of Depositor (filed with the Commission on 06/07/2004) | ||
| (8a1) | Participation Agreement with AIM Variable Insurance Funds, as amended (filed herewith) | ||
| (8a2) | Distribution Agreement with AIM Variable Insurance Funds (filed herewith) | ||
| (8a3) | Rule 22c-2 Agreement with AIM Variable Insurance Funds (filed herewith) | ||
| (8a4) | Administrative Services Agreement with AIM Variable Insurance Funds (filed herewith) | ||
| (8b1) | Participation Agreement with AllianceBernstein Variable Products Series Fund, as amended (filed herewith) | ||
| (8b3) | Administrative Services Agreement with AllianceBernstein Variable Products Series Fund (filed herewith) | ||
| (8b4) | Rule 22c-2 Agreement with AllianceBernstein Variable Products Series Fund (filed herewith) | ||
| (8c1) | Shareholder Services Agreement with American Century Investment Management, Inc., as amended (filed herewith) | ||
| (8c2) | Rule 22c-2 Agreement with American Century Investment Management, Inc. (filed herewith) | ||
| (8d1) | Participation Agreement with Dreyfus Investment Portfolios, as amended (filed herewith) |
1
| (8d2) | Administrative Services Agreement with Dreyfus Investment Portfolios, as amended (filed herewith) | ||
| (8d3) | Rule 12b-1 Agreement with Dreyfus Investment Portfolios, as amended (filed herewith) | ||
| (8e1) | Amended & Restated Participation Agreement with Fidelity Variable Insurance Products Fund (filed herewith) | ||
| (8e2) | Distribution Agreement with Fidelity Variable Insurance Products Fund (filed herewith) | ||
| (8e3) | Service Agreement dated 8-2-1999 with Fidelity Variable Insurance Products Fund (filed herewith) | ||
| (8e4) | Service Agreement dated 2-29-2000 with Fidelity Variable Insurance Products Fund (filed herewith) | ||
| (8e5) | Service Agreement dated 3-26-2002 with Fidelity Variable Insurance Products Fund (filed herewith) | ||
| (8e6) | Rule 22c-2 Agreement with Fidelity Variable Insurance Products Fund (filed herewith) | ||
| (8f1) | Participation Agreement with Goldman Sachs Variable Insurance Trust (filed herewith) | ||
| (8f2) | Administrative Services Agreement with Goldman Sachs Variable Insurance Trust (filed herewith) | ||
| (8f3) | Rule 22c-2 Agreement with Goldman Sachs Variable Insurance Trust (filed herewith) | ||
| (8g1) | Participation Agreement with Neuberger Berman Advisers Management Trust, as amended (filed herewith) | ||
| (8g2) | Distribution & Administrative Services Agreement with Neuberger Berman Advisers Management Trust (filed herewith) | ||
| (8g3) | Rule 22c-2 Agreement with Neuberger Berman Advisers Management Trust (filed herewith) | ||
| (8h1) | Form of Participation Agreement with Principal Variable Contract Funds, Inc. (filed herewith) | ||
| (8h2) | Form of Rule 22c-2 Agreement with Principal Variable Contract Funds, Inc. (filed herewith) | ||
| (8i1) | Participation Agreement with T. Rowe Equity Series Inc., as amended (filed herewith) | ||
| (8i2) | Rule 12b-1 Agreement with T. Rowe Equity Series Inc. (filed herewith) | ||
| (8i3) | Rule 22c-2 Agreement with T. Rowe Equity Series Inc. (filed herewith) | ||
| (8i4) | Participation Agreement with T. Rowe Equity Series Inc., as amended (filed herewith) | ||
| (9) | Opinion of Counsel (filed with the Commission on 01/04/05) | ||
| (10a) | Consent of E&Y LLP (filed herewith) | ||
| (10b) | Powers of Attorney (filed with the Commission on 04/30/2007) | ||
| (11) | Financial Statement Schedules (filed herewith) |
| Name and Principal Business Address | Positions and Offices | |
| Betsy J. Bernard | Director | |
| 40 Shalebrook Drive | Chair, Nominating and Governance Committee | |
| Morristown, NJ 07960 | ||
| Jocelyn Carter-Miller | Director | |
| Tech Edventures | Member, Nominating and Governance Committee | |
| 3020 NW 33rd Avenue Lauderdale Lakes, FL 33311 | ||
| Gary E. Costley | Director | |
| C & G Capital and Management, LLC | Member, Human Resources Committee | |
| 257 Barefoot Beach Boulevard, Ste 404 Bonita Springs, FL 34134 | ||
| Michael T. Dan | Director | |
| The Brink’s Company | Member, Human Resources Committee | |
| 1801 Bayberry Court Richmond, VA 23226 | ||
| C. Daniel Gelatt, Jr. | Director | |
| NMT Corporation | Member, Executive Committee and Human Resources Committee | |
| 2004 Kramer Street La Crosse, WI 54603 | ||
| J. Barry Griswell | Director | |
| The Principal Financial Group | Chairman of the Board and Chair, Executive Committee | |
| Des Moines, IA 50392 | Principal Life: Chairman and Chief Executive Officer | |
| Sandra L. Helton | Director | |
| 1040 North Lake Shore Drive #26A | Member, Audit Committee | |
| Chicago, IL 60611 | ||
| William T. Kerr | Director | |
| Meredith Corporation | Member, Executive Committee and Chair, Human Resources Committee | |
| 1716 Locust St. Des Moines, IA 50309-3023 | ||
2
| Name and Principal Business Address | Positions and Offices | |
| Richard L. Keyser | Director | |
| W.W. Grainger, Inc. | Member, Nominating and Governance Committee | |
| 100 Grainger Parkway Lake Forest, IL 60045-5201 | ||
| Arjun K. Mathrani | Director | |
| 176 East 71st Street, Apt. 9-F | Member, Audit Committee | |
| New York, NY 10021 | ||
| Elizabeth E. Tallett | Director | |
| Hunter Partners, LLC | Chair, Audit Committee and Member, Executive Committee | |
| 48 Federal Twist Road Stockton, NJ 08559 | ||
| Therese M. Vaughan | Director | |
| Drake University | Member, Audit Committee | |
| 2507 University Avenue Des Moines, Iowa 50311 | ||
| Larry D. Zimpleman | Director | |
| The Principal Financial Group | Principal Life: President and Chief Operating Officer | |
| Des Moines, IA 50392 |
| Name and Principal Business Address | Positions and Offices | |
| John Edward Aschenbrenner | President, Insurance and Financial Services | |
| Craig L. Bassett | Vice President and Treasurer | |
| Ronald L. Danilson | Senior Vice President Retirement and Investor Services | |
| James David DeVries | Senior Vice President Human Resources | |
| Greg B. Elming | Senior Vice President and Controller | |
| Ralph Craig Eucher | Senior Vice President Retirement and Investor Services | |
| Nora Mary Everett | Senior Vice President Mutual Funds | |
| Michael Harry Gersie | Executive Vice President and Chief Financial Officer | |
| Thomas John Graf | Senior Vice President Investor Relations | |
| Joyce Nixson Hoffman | Senior Vice President and Corporate Secretary | |
| Daniel Joseph Houston | Executive Vice President Retirement and Investor Services | |
| Dave Shaver | Senior Vice President Health | |
| Ellen Zislin Lamale | Senior Vice President and Chief Actuary | |
| Julia Marie Lawler | Senior Vice President and Chief Investment Officer | |
| James Patrick McCaughan | President, Global Asset Management | |
| Timothy Jon Minard | Senior Vice President Retirement Distribution | |
| Mary Agnes O’Keefe | Senior Vice President and Chief Marketing Officer | |
| Gary Paul Scholten | Senior Vice President and Chief Information Officer | |
| Karen Elizabeth Shaff | Executive Vice President and General Counsel | |
| Norman Raul Sorensen | Senior Vice President International Asset Accumulation | |
| Deanna Dawnette Strable | Senior Vice President Individual Life and Specialty Benefits |
3
| Jurisdiction of | Percentage of | |||||||
| Incorporation or | Ownership by its | |||||||
| PRINCPAL FINANCIAL GROUP, INCD | Organization | Immediate Parent | ||||||
| Delaware | ||||||||
àPrincipal Financial Services, Inc.§Ñ | Iowa | 100 | ||||||
àPrincor Financial Services Corporation§Ñ | Iowa | 100 | ||||||
àPFG DO Brasil LTDA§Ñ | Brazil | 46 | ||||||
àBrasilprev Seguros E Previdencia S.A.§Ñ | Brazil | 100 | ||||||
àPrincipal International, Inc.§Ñ | Iowa | 100 | ||||||
àPrincipal International (Asia) Limited§Ñ | Hong Kong | 100 | ||||||
àPrincipal Global Investors (Asia) Limited§Ñ | Hong Kong | 100 | ||||||
àPrincipal Nominee Company (Hong Kong) Limited§Ñ | Hong Kong | 100 | ||||||
àPrincipal Asset Management Company (Asia) Limited§Ñ | Hong Kong | 100 | ||||||
à Principal Fund Management (Hong Kong) Limited§Ñ | Hong Kong | 100 | ||||||
àPrincipal Insurance Company (Hong Kong) Limited§Ñ | Hong Kong | 100 | ||||||
àPrincipal Trust Company(Asia) Limited§Ñ | Hong Kong | 100 | ||||||
àPrincipal Mexico Compania de Seguros, S.A. de C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Pensiones, S.A. de C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Afore, S.A. de C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Siefore, S.A. de C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Mexico Servicios, S.A. de C.V.§Ñ | Mexico | 100 | ||||||
àDistribuidora Principal Mexico, S.A. de C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Fondos de Inversion S.A. De C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Consulting (India) Private Limited§Ñ | India | 100 | ||||||
àPrincipal International Mexico Holding, S.A. De C.V.§Ñ | Mexico | 100 | ||||||
àPrincipal Mexico Holdings, S.A. De C.V.§Ñ | Mexico | 100 | ||||||
àJF Molloy & Associates§Ñ | Indiana | 100 | ||||||
àMolloy Medical Management Company, Inc.§Ñ | Indiana | 100 | ||||||
àPrincipal Wellness Company§Ñ | Indiana | 100 | ||||||
àPrincipal Health Insurance Company§Ñ | Iowa | 100 | ||||||
àPrincipal Global Investors Holding Company, Inc.§Ñ | Delaware | 100 | ||||||
àPrincipal Global Investors (Ireland) Limited§Ñ | Ireland | 100 | ||||||
àPrincipal Global Investors (Europe) Limited§Ñ | United Kingdom | 100 | ||||||
àPrincipal Global Investors (Singapore) Limited§Ñ | Singapore | 100 | ||||||
àPrincipal Global Investors (Japan) Limited§Ñ | Japan | 100 | ||||||
àPrincipal Financial Group (Mauritius) Ltd.§Ñ | Mauritius | 100 | ||||||
àPrincipal PNB Asset Management Company Private Limited§Ñ | India | 100 | ||||||
àPrincipal Trustee Company Private Limited§Ñ | India | 100 | ||||||
àPNB Principal Financial Planners Private Limited§Ñ | India | 100 | ||||||
àPNB Principal Insurance Advisory Company Private Limited§Ñ | India | 26 | ||||||
àPrincipal PNB Life Insurance Company Limited§Ñ | India | 26 | ||||||
4
| Jurisdiction of | Percentage of | |||||||
| Incorporation or | Ownership by its | |||||||
| PRINCPAL FINANCIAL GROUP, INCD | Organization | Immediate Parent | ||||||
àPrincipal Life Insurance Company¨Ñ | Iowa | 100 | ||||||
àPrincipal Real Estate Fund Investors, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Global Investors, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Global Columbus Circle, LLC§Ñ© | Delaware | 100 | ||||||
àPost Advisory Group, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Enterprise Capital, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Commercial Acceptance, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Real Estate Investors, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Commercial Funding, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Global Investors Trust§Ñ© | Delaware | 100 | ||||||
àSpectrum Asset Management, Inc.§Ñ© | Connecticut | 100 | ||||||
àCCIP, LLC§Ñ© | Delaware | 70 | ||||||
àColumbus Circle Investors§Ñ© | Connecticut | 100 | ||||||
àPrincipal Reinsurance Company of Vermont§Ñ© | Vermont | 100 | ||||||
àPrincipal Development Investors, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Holding Company§Ñ© | Iowa | 100 | ||||||
àPrincipal Generation Plant, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Bank§Ñ© | OTS | 100 | ||||||
àPetula Associates, Ltd.§Ñ© | Iowa | 100 | ||||||
àEquity FC, Ltd.§Ñ© | Iowa | 100 | ||||||
àPrincipal Health Care, Inc§Ñ© | Iowa | 100 | ||||||
àPrincipal Real Estate Portfolio, Inc.§Ñ© | Delaware | 100 | ||||||
àPetula Prolix Development Company§Ñ© | Iowa | 100 | ||||||
àPrincipal Dental Services, Inc.§Ñ© | Arizona | 100 | ||||||
àEmployers Dental Services, Inc.§Ñ© | Arizona | 100 | ||||||
àDelaware Charter Guarantee & Trust Company§Ñ© | Delaware | 100 | ||||||
àProfessional Pensions, Inc.§Ñ© | Connecticut | 100 | ||||||
àBenefit Fiduciary Corporation§Ñ© | Rhode Island | 100 | ||||||
àBoston Insurance Trust, Inc.§Ñ© | Massachusetts | 100 | ||||||
àPreferred Product Network, Inc.§Ñ© | Delaware | 100 | ||||||
àHealthRisk Resource Group, LLC§Ñ© | Iowa | 100 | ||||||
àPrincipal Real Estate Holding Company, LLC§Ñ© | Delaware | 100 | ||||||
àPrincipal Financial Services (Australia), Inc.§Ñ | Iowa | 100 | ||||||
àPrincipal Global Investors (Australia) Service Company Pty Limited§Ñ | Australia | 100 | ||||||
àPrincipal Global Investors (Australia) Limited§Ñ | Australia | 100 | ||||||
àPrincipal Real Estate Investors (Australia) Limited§Ñ | Australia | 100 | ||||||
àPrincipal Capital Global Investors Limited§Ñ | Australia | 100 | ||||||
àPrincipal Financial Group (Australia) Pty Ltd.§Ñ | Australia | 100 | ||||||
àPrincipal Investments (Australia) Limited§Ñ | Delaware | 100 | ||||||
àPrincipal Australia (Holdings) Pty Limited§Ñ | Australia | 100 | ||||||
àCIMB — Principal Asset Management Berhad§Ñ | Malaysia | 40 | ||||||
àPrincipal International Holding Company, LLC§Ñ | Delaware | 100 | ||||||
àPrincipal Management Corporation§Ñ | Iowa | 100 | ||||||
àPrincipal Financial Advisors, Inc.§Ñ | Iowa | 100 | ||||||
àPrincipal Shareholder Services, Inc.§Ñ | Washington | 100 | ||||||
àEdge Asset Management, Inc.§Ñ | Washington | 100 | ||||||
àPrincipal Funds Distributor, Inc.§Ñ | Washington | 100 | ||||||
àPrincipal Global Services Private Limited§Ñ | India | 100 | ||||||
àCCB Principal Asset Management Company, Ltd.§Ñ | China | 25 | ||||||
àPrincipal International de Chile, S.A.§Ñ | Chile | 100 | ||||||
àPrincipal Compania de Seguros de Vida Chile S.A.§Ñ | Chile | 100 | ||||||
àPrincipal Administradora General De Fondos S.A.§Ñ | Chile | 100 | ||||||
àPrincipal Creditos Hipotecarios, S.A.§Ñ | Chile | 100 | ||||||
àPrincipal Asset Management S.A.§Ñ | Chile | 100 | ||||||
àPrincipal Servicios Corporativos Chile LTDA§Ñ | Chile | 100 | ||||||
| D | Consolidated financial statements are filed with SEC. |
5
| § | Not required to file financial statements with the SEC. | |
| Ñ | Included in the consolidated financial statements of Principal Financial Group, Inc. filed with the SEC. | |
| ¨ | Separate financial statements are filed with SEC. | |
| © | Included in the financial statements of Principal Life Insurance Company filed with the SEC. |
| Title of Class | Number of Plan Participants | Number of Contractowners | ||||||
| BFA Variable Annuity Contracts | 50 | 6 | ||||||
| Pension Builder Contracts | 212 | 140 | ||||||
| Personal Variable Contracts | 1,733 | 28 | ||||||
| Premier Variable Contracts | 6,029 | 66 | ||||||
| Principal Variable Annuity Contract | 47,186 | 47,186 | ||||||
| Freedom Variable Annuity Contract | 1,932 | 1,932 | ||||||
| Freedom 2 Variable Annuity Contract | 283 | 283 | ||||||
| Investment Plus Variable Annuity Contract | 20,961 | 20,961 | ||||||
| (a) | Other Activity | ||
| Princor Financial Services Corporation acts as principal underwriter for variable life insurance contracts issued by Principal Life Insurance Company Variable Life Separate Account, a registered unit investment trust. Princor Financial Services Corporation also acts as principal underwriter for variable annuity contracts participating in Principal Life Insurance Company Separate Account B, a registered unit investment trust, and for Class J shares, Institutional Class shares, Advisors Preferred Class shares, Advisors Select Class shares, Advisors Signature Class shares, Preferred Class shares, and Select Class shares of Principal Investors Fund, Inc. | |||
| (b) | Management |
| (b1) Name and principal business address | (b2) Positions and offices with principal underwriter | |
| Lindsay L. Amadeo | Director - Marketing Communications | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| John E. Aschenbrenner | Director | |
| The Principal Financial Group Des Moines, IA 50392 |
6
| (b1) Name and principal business address | (b2) Positions and offices with principal underwriter | |
| Deborah J. Barnhart | Director - Distribution (PPN) | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Patricia A. Barry | Assistant Corporate Secretary | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Craig L. Bassett | Treasurer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Michael J. Beer | President and Director | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Lisa Bertholf | Director - Marketing | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Tracy W. Bollin | Assistant Controller | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| David J. Brown | Senior Vice President | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Jill R. Brown | Senior Vice President and Chief Financial Officer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Bret J. Bussanmas | Vice President - Distribution | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| P. Scott Cawley | Product Marketing Officer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Ralph C. Eucher | Director | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Stephen G. Gallaher | Assistant General Counsel | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Ernest H. Gillum | Vice President | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Michael Harkin | Marketing Officer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Robyn Hinders | Director - Mutual Fund Operations | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Joyce N. Hoffman Sr. | Vice President and Corporate Secretary | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Ann Hudson | Compliance Officer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Patrick A. Kirchner | Counsel | |
| The Principal Financial Group Des Moines, IA 50392 |
7
| (b1) Name and principal business address | (b2) Positions and offices with principal underwriter | |
| Peter R. Kornweiss | Vice President | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Julie LeClere | Director - Marketing and Recruiting | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Sarah J. Pitts | Counsel | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| David L. Reichart | Senior Vice President | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Martin R. Richardson | Vice President - Broker Dealer Operations | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Michael D. Roughton | Senior Vice President and Associate General Counsel | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Adam U. Shaikh | Counsel | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Norman Sue | Compliance Officer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Traci L. Weldon | Vice President/Chief Compliance Officer | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Beth Wilson | Vice President | |
| The Principal Financial Group Des Moines, IA 50392 | ||
| Larry D. Zimpleman | Chairman of the Board and Director | |
| The Principal Financial Group Des Moines, IA 50392 |
| (c) | Compensation from the Registrant |
| (3) | ||||||||||||||||
| Compensation on | ||||||||||||||||
| (2) | Events Occasioning | (4) | ||||||||||||||
| (1) | Net Underwriting | the Deduction of a | Brokerage | (5) | ||||||||||||
| Name of Principal Underwriter | Discounts & Commissions | Deferred Sales Load | Commissions | Compensation | ||||||||||||
| Princor Financial Services Corporation | $ | 30,652,824.68 | 0 | 0 | 0 | |||||||||||
8
| 1. | Registrant has included appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in its registration statement, including the prospectus, used in connection with the offer of the contract; |
| 2. | Registrant will include appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in any sales literature used in connection with the offer of the contract; |
| 3. | Registrant will instruct sales representatives who solicit Plan Participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b)(11) to the attention of the potential Plan Participants; and |
| 4. | Registrant will obtain from each Plan Participant who purchases a Section 403(b) annuity contract, prior to or at the time of such purchase, a signed statement acknowledging the Plan Participant’s understanding of (a) the restrictions on redemption imposed by Section 403(b)(11), and (b) the investment alternatives available under the employer’s Section 403(b) arrangement, to which the Plan Participant may elect to transfer his contract value. |
| By: | /s/ J. Barry Griswell | |||
| By: | PRINCIPAL LIFE INSURANCE COMPANY (Depositor) | |||
| By | /s/ J. Barry Griswell | |||
| Attest: | ||||
| /s/ Joyce N. Hoffman | ||||
| Joyce N. Hoffman, Senior Vice President and Corporate Secretary | ||||
| Signature | Title | Date | ||
/s/ J. B. Griswell | President, Chairman and Chief Executive Officer | 04/ /2008 | ||
/s/ G. B. Elming | Senior Vice President and Controller (Principal Accounting Officer) | 04/ /2008 | ||
/s/ M. H. Gersie | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | 04/ /2008 | ||
(B. J. Bernard)* | Director | 04/ /2008 | ||
(J. Carter-Miller)* | Director | 04/ /2008 |
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| Signature | Title | Date | ||
G. E. Costley)* | Director | 04/ /2008 | ||
(M. T. Dan)* | Director | 04/ /2008 | ||
(C. D. Gelatt, Jr.)* | Director | 04/ /2008 | ||
(S. L. Helton)* | Director | 04/ /2008 | ||
(W. T. Kerr)* | Director | 04/ /2008 | ||
(R. L. Keyser)* | Director | 04/ /2008 | ||
(A. K. Mathrani)* | Director | 04/ /2008 | ||
(E. E. Tallett)* | Director | 04/ /2008 | ||
(T. M. Vaughan)* | Director | 04/ /2008 | ||
(L. D. Zimpleman)* | Director | 04/ /2008 |
| * | By /s/ J. Barry Griswell J. Barry Griswell, Chairman, President and Chief Executive Officer Pursuant to Powers of Attorney Previously Filed or Included |
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