Registration No. 333-65690
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
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PRINCIPAL LIFE INSURANCE COMPANY VARIABLE LIFE SEPARATE ACCOUNT
(Exact Name of Registrant)
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PRINCIPAL LIFE INSURANCE COMPANY
(Name of Depositor)
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711 High Street
Des Moines, Iowa 50309
(Address of Depositor's Principal Executive Offices)
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(515) 247-5111
(Depositor's Telephone Number, Including Area Code)
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Sarah H. Pitts
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50309
(Name and Address of agent for service of process)
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Please send copies of all communications to
J. SUMNER JONES
Jones & Blouch
1025 Thomas Jefferson Street, N.W.
Washington, DC 20007-0805
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Title and Amount of Securities: Principal Variable Universal Life Accumulator
Policy. (Pursuant to Rule 24F-2 under the Investment Company Act of 1940, the
Registrant elects to register an indefinite amount of securities being
registered.)
Approximate date of proposed public offering: As soon as practicable after the
effective date of the Registration Statement. The Registrant hereby amends its
Registration Statement under the Securities Act of 1933 on such date or dates as
may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PRINCIPAL LIFE INSURANCE COMPANY VARIABLE LIFE SEPARATE ACCOUNT
Registration Statement on Form S-6
Cross Reference Sheet
ITEMS OF FORM N-8B-2 CAPTIONS IN PROSPECTUS
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policy
5 Principal Life Insurance Company Variable Life Separate
Account
6(a) Not Applicable
6(b) Not Applicable
7 Not Required
8 Not Required
9 Legal Proceedings
10(a) Ownership, Beneficiary, Assignment
10(b) Calculation of Accumulated Value; Unit Values; Net
Investment Factor; Valuations in Connection with a
Policy; Participating Policy
10(c),10(d) Summary (Transfers; Policy Loans; Loan Accounts;
Surrenders, Charges and Deductions; Death Benefits and
proceeds; Maturity Proceeds)
10(e) Summary (Premiums, Termination and Reinstatement);
Policy Termination and Reinstatement (Policy
Termination; Reinstatement)
10(f) Other Matters (Voting Rights)
10(g)(1),10(g)(2), Principal Life Insurance Company Variable Life Separate
10(h)(1),10(h)(2) Account; General Provisions (Addition, Deletion or
Substitution of Investments)
10(g)(3),10(g)(4), Not Applicable
10(h)(3),10(h)(4)
10(i) Principal Life Insurance Company Variable Life Separate
Account, The Policy (Policy Values); General Provisions
(Addition, Deletion or Substitution of Investments);
General Provisions (Optional Insurance Benefits);
Federal Tax Matters
11 Principal Life Insurance Company Variable Life Separate
Account; General Provisions (Addition, Deletion or
Substitution of Investments)
12(a) Cover page
12(b) Not Applicable
12(c) Principal Life Insurance Company Variable Life Separate
Account; The Funds
12(d) Distribution of the Policy
12(e) Principal Life Insurance Company Variable Life Separate
Account
13(a) Principal Life Insurance Company Variable Life Separate
Account; Charges and Deductions
13(b),13(c), Summary (Charges and Deductions); Charges and
13(d),13(e),13(f),13(g) Deductions
14 The Policy (To buy a Policy); Distribution of the
Policy
15 Summary (Premiums); The Policy (Payment of Premiums;
Premium Limitations; Allocation of Premiums)
16 Summary (The Policy); Principal Life Insurance Company
Variable Life Separate Account; The Policy (Policy
Values); General Provisions (Addition, Deletion or
Substitution of Investments)
17(a),17(b),17(c) Captions referenced under Items 10(c), 10(d), 10(e),
and 10(i) above
18(a) Summary (Policy Value); The Policy (Policy Values)
18(b) Summary (Policy Value); The Policy (Policy Values)
18(c) Summary (Policy Loans); The Policy (Policy Values;
Policy Loans; Loan Account)
18(d) Not Applicable
19 Other Matters (Voting Rights; Statement of Values)
20(a),20(b) Principal Life Insurance Company Variable Life Separate
Account; General Provisions (Addition, Deletion or
Substitution of Investments); Other Matters (Voting
Rights)
20(c),20(d), Not Applicable
20(e),20(f)
21(a),21(b) Summary (Policy Loans); The Policy (Policy Values;
Policy Loans)
21(c) Summary (Policy Value; Policy Loans); The Policy
(Policy Values; Policy Loans)
22 General Provisions (The Contract; Incontestability)
23 Not Applicable
24 Summary
25 The Company
26 Summary (Investment Account); The Policy (Investment
Account Transfers)
27 The Company
28 Officers and Directors of Principal Life Insurance
Company
29 The Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
PRINCIPAL VARIABLE UNIVERSAL LIFE ACCUMULATOR
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
The Principal Variable Universal Life Accumulator Insurance Policy (the
"Policy") is issued by Principal Life Insurance Company (the "Company"). The
Policy provides:
. a death benefit payable on the death of the insured;
. policy loans; and
. a net surrender value which may be accessed by a partial or total surrender of
the Policy.
This prospectus provides information that you should know before buying a
Policy. It is accompanied by a current prospectus for the underlying mutual
funds that are available under the Policy. Please read these prospectuses
carefully and keep them for future reference.
The investment options available under the Policy are:
Principal Variable Contracts AIM V.I. Growth Fund
Fund, Inc.
Asset Allocation Account AIM V.I. Growth and Income Fund
Balanced Account AIM V.I. Value Fund
Bond Account American Century Variable Portfolios,
Inc.
Capital Value Account VP Income & Growth
Equity Growth Account VP Ultra
Government Securities Account Dreyfus Investment Portfolios
Growth Account Founders Discovery Portfolio
International Account Fidelity Variable Insurance Products
Fund II
International SmallCap Account Contrafund/(R)/ Portfolio
LargeCap Growth Account Fidelity Variable Insurance Products
Fund
LargeCap Stock Index Account Equity-Income Portfolio
MicroCap Account High Income Portfolio
MidCap Account INVESCO VIF - Dynamics Fund
MidCap Growth Account INVESCO VIF - Health Sciences Fund
MidCap Growth Equity Account INVESCO VIF - Small Company Growth
MidCap Value Account INVESCO VIF - Technology Fund
Money Market Account Janus Aspen Series
Real Estate Account Aggressive Growth Portfolio
SmallCap Account Putnam Variable Trust
SmallCap Growth Account Global Asset Allocation Fund
SmallCap Value Account Vista Fund
Utilities Account Voyager Fund
This Policy is NOT:
. a bank deposit
. endorsed by a bank or government agency
. federally insured
The Policy involves investment risk, including possible loss of principal.
You should be aware that the Securities and Exchange Commission ("SEC") has not
reviewed the Policy for its investment merit, and does not guarantee that the
information in this prospectus is accurate or complete. It is a criminal offense
to say otherwise.
This prospectus is dated ________________.
The Policy offered by this prospectus may not be available in all states. This
prospectus is not an offer to sell, or solicitation of an offer to buy, the
Policy in states in which the offer or solicitation may not be lawfully made. No
person is authorized to give any information or to make any representation in
connection with this Policy other than those contained in this prospectus.
GLOSSARY
ADJUSTMENT - change to your Policy resulting from an increase or decrease in
policy face amount or a change in: smoking status; death benefit option; rating
or riders.
ADJUSTMENT DATE - the monthly date on or next following the Company's approval
of a requested adjustment.
ATTAINED AGE - the insured's age on the birthday on or preceding the last policy
anniversary.
BUSINESS DAY - any date that the New York Stock Exchange is open for trading and
trading is not restricted.
DIVISION - a part of the Separate Account which invests in shares of a mutual
fund.
EFFECTIVE DATE - the date on which all requirements for issuance of a Policy
have been satisfied.
FIXED ACCOUNT - that part of the dollar amount in the Policy that reflects value
in the General Account of the Company.
GENERAL ACCOUNT - assets of the Company other than those allocated to any of our
Separate Accounts.
INSURED - the person named as the "insured" on the application for the Policy.
The insured may or may not be the owner.
LOAN ACCOUNT - that part of the dollar amount in the Policy that reflects the
value transferred from the division(s) and/ or Fixed Account as collateral for a
policy loan.
MONTHLY DATE - the day of the month which is the same day as the policy date.
Example: If the policy date is September 5, 2002, the first monthly date is
October 5, 2002.
MONTHLY POLICY CHARGE - the amount subtracted from the policy value on each
monthly date equal to the sum of the cost of insurance and of additional
benefits provided by any rider plus the monthly administration charge and asset
based charge in effect on the monthly date.
MUTUAL FUND - a registered open-end investment company, or a separate investment
account or portfolio thereof, in which a division invests.
NET POLICY VALUE - the policy value minus any policy loans and unpaid loan
interest.
NET PREMIUM - the gross premium less the deductions for the premium expense
charge. It is the amount of premium allocated to the divisions and/or Fixed
Account.
NET SURRENDER VALUE - surrender value minus any policy loans and unpaid loan
interest.
NOTICE - any form of communication received in our home office which provides
the information we need which may be in writing or another manner which we
approve in advance.
OWNER - the person, including joint owner, who owns all the rights and
privileges of this Policy.
POLICY DATE - the date from which monthly dates, policy years and policy
anniversaries are determined.
POLICY VALUE - an amount equal to the Fixed Account value plus the division
value(s) plus the Loan Account value.
POLICY YEAR - the one-year period beginning on the policy date and ending one
day before the policy anniversary and any subsequent one year period beginning
on a policy anniversary.
Example: If the policy date is September 5, 2002, the first policy year
ends on September 4, 2003. The first policy anniversary falls on
September 5, 2003.
PREMIUM EXPENSE CHARGE - the charge deducted from premium payments to cover a
sales charge, state and local premium taxes and federal taxes.
PRORATED BASIS - in the proportion that the value of a particular division or
the Fixed Account bears to the total value of all divisions and the Fixed
Account.
SURRENDER VALUE - policy value minus any surrender charge.
TARGET PREMIUM - a premium amount which is used to determine any applicable
surrender charge under a Policy. Target premiums are provided in Appendix B.
TOTAL FACE AMOUNT - policy face amount plus face amount of the supplemental
benefit rider, if any.
UNIT - the accounting measure used to calculate the value of the divisions.
VALUATION DATE - each day the New York Stock Exchange ("NYSE") is open.
VALUATION PERIOD - the period begins at the close of normal trading on the NYSE,
generally 4:00 p.m. E.T. on each valuation date and ends at the close of normal
trading of the NYSE on the next valuation date.
WRITTEN REQUEST - actual delivery to the Company at our office of a written
notice or request, signed and dated, on a form we supply or approve.
Your notices may be mailed to us at:
Principal Life Insurance Company
P O Box 9296
Des Moines, Iowa 50306-9296
SUMMARY
This prospectus describes a flexible variable universal life policy offered by
the Company. This is a brief summary of the Policy's features. More detailed
information follows later in this prospectus.
THE POLICY
The Policy is designed to provide you with:
. Insurance protection;
. a death benefit payable at the death of the insured; and
. flexibility in:
. the amount and frequency of premium payments (subject to certain
limitations); and
. the amount of life insurance proceeds payable under the Policy.
You may allocate your net premium payments to divisions and/or the Fixed
Account. All divisions may not be available in all states. A current list of
divisions available in your state may be obtained from a sales representative or
our home office.
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 underlying mutual funds are NOT available to the general public directly.
The underlying mutual funds are available only as investment options in variable
life insurance policies or variable annuity contracts issued by life insurance
companies and qualified plans. Some of the underlying mutual funds have been
established by investment advisers that manage publicly traded mutual funds
having similar names and investment objectives. While some of the underlying
mutual funds may be similar to, and may in fact be modeled after publicly traded
mutual funds, you should understand that the underlying mutual funds are not
otherwise directly related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and of any underlying
mutual fund may differ substantially.
DIVISION THE DIVISION INVESTS IN:
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Principal Variable Contracts Fund, Inc.
Asset Allocation Asset Allocation Account
Balanced Balanced Account
Capital Value Capital Value Account
Equity Growth Equity Growth Account
Government Securities Government Securities Account
Growth Growth Account
International International Account
International SmallCap International SmallCap Account
LargeCap LargeCap Growth Account
LargeCap Stock Index LargeCap Stock Index Account
MicroCap MicroCap Account
MidCap MidCap Account
MidCap Growth MidCap Growth Account
MidCap Growth Equity MidCap Growth Equity Account
MidCap Value MidCap Value Account
Money Market Money Market Account
Real Estate Real Estate Account
SmallCap SmallCap Account
SmallCap Growth SmallCap Growth Account
SmallCap Value SmallCap Value Account
Utilities Utilities Account
AIM V.I. Growth AIM V.I. Growth Fund
AIM V.I. Growth and Income AIM V.I. Growth and Income Fund
AIM V.I. Value AIM V.I. Value Fund
American Century VP Income & American Century VP Income & Growth Fund -
Growth Investors Class Shares
American Century VP Ultra American Century VP Ultra Fund -
Investor Class Shares
Dreyfus Investment Portfolios - Investor Class
Shares
DIP Founders Discovery Founders Discovery Portfolio
Fidelity Variable Insurance Products Fund II -
Initial Class Shares
Fidelity VIP Contrafund Contrafund Portfolio
Fidelity Variable Insurance Products Fund -
Initial Class Shares
Fidelity VIP Equity - Income Equity Income Portfolio
Fund
Fidelity VIP High Income High Income Portfolio
INVESCO VIF - Dynamics Fund INVESCO VIF - Dynamics Fund -
Investor Class Shares
INVESCO VIF - Health Sciences INVESCO VIF - Health Sciences Fund -
Fund Investor Class Shares
INVESCO VIF - Small Company INVESCO VIF - Small Company Growth -
Growth Fund Investor Class Shares
INVESCO VIF - Technology Fund INVESCO VIF - Technology Fund -
Investor Class Shares
Janus Aspen Series - Service Class Shares
Janus Aspen Aggressive Growth Aggressive Growth Portfolio
Putnam VT Global Asset Putnam VT Global Asset Allocation Fund -
Allocation IB Class Shares
Putnam VT Vista Putnam VT Vista Fund - IB Class Shares
Putnam VT Voyager Putnam VT Voyager Fund - IB Class Shares
PREMIUMS
The Company guarantees that the Policy will stay in force for the first five
policy years if you have paid enough premium to meet the no lapse guarantee
provision (see THE POLICY - Payment of Premiums).
Your initial net premium is allocated to the Money Market division at the end of
the valuation date we receive the premium. Twenty-one days after the effective
date of the Policy, the money is reallocated using your allocation instructions
(see THE POLICY - Allocation of Premiums). Any subsequent net premiums are
allocated to divisions and/or the Fixed Account.
POLICY VALUE
Your Policy value is:
. the value(s) of your division(s)
. plus the value of your Fixed Account
. plus the value of your Loan Account.
It is possible that the investment performance could cause a loss of the entire
amount allocated to the divisions. Without additional premium payments or
investments in the Fixed Account or a death benefit guarantee rider, this could
result in no death benefit upon the insured's death.
FIXED ACCOUNT
The Company guarantees that net premiums allocated to the Fixed Account earn
interest at a guaranteed rate. In no event will the guaranteed interest rate be
less than 3%, accrued daily, compounded annually.
TRANSFERS
You may transfer amounts between the divisions and/or the Fixed Account.
POLICY LOANS
You may borrow against your policy value any time the Policy has a net surrender
value. The minimum amount of a loan is $500.
LOAN ACCOUNT
When you take a policy loan, we establish a Loan Account. We charge interest on
your policy loan. An amount equal to the amount of the policy loan is
transferred to the Loan Account from your divisions and/or Fixed Account. The
Loan Account earns interest.
SURRENDERS (TOTAL AND PARTIAL)
Total Surrender
---------------
. You may surrender your Policy and receive the net surrender value.
. We calculate the net surrender value as of the business day we receive your
written request.
. A surrender charge is imposed on total surrenders within ten years of the
policy date (another date may apply if the Policy has been reinstated or the
policy face amount increased).
Partial Surrender
-----------------
. After the first policy year, you may request a partial surrender of the net
surrender value.
. The minimum amount of partial surrender is $500.
. You may make up to two partial surrenders in a policy year the total of which
may not be greater than 75% of the net surrender value (as of the date of the
request for the first partial surrender in that policy year).
. The reduction in total face amount will be made as a last-in, first-out basis.
CHARGES AND DEDUCTIONS
Premium Expense Charge
----------------------
Deductions from premiums during each of the first five years (and with respect
to premiums made because of a policy face amount increase, during the first five
years after the increase) equal:
. sales charge of 3.00% of premiums paid
. plus 2.20% for state and local taxes
. plus 1.25% for federal taxes.
Deductions after the first five policy years (and after five years of a policy
face amount increase) include:
. 2.20% for state and local taxes
. plus 1.25% for federal taxes.
Surrender Charges
-----------------
A surrender charge is imposed on policy termination or total surrender during
the first ten policy years. A policy face amount increase has its own surrender
charge period that begins on the adjustment date. (see CHARGES AND DEDUCTIONS -
Surrender Charge).
The surrender charge is a factor of:
. the Policy's target premiums;
. the policy holder's age and state of residence; and
. the length of time the Policy has been in effect.
Monthly Policy Charges
----------------------
. Administration charge:
. The monthly administrative charge is $25.00 per month during the first
policy year.
. After the first policy year, the current administrative charge is $10.00 per
month. This charge is guaranteed not to exceed $25.00 per month.
. Cost of insurance charge.
. Asset based charge:
. in the first ten policy years, 0.70% of your value(s) in the division(s) and
Fixed Account per year;
. after the tenth policy year, 0.20% of your value(s) in the division(s) and
Fixed Account per year.
. Optional benefit rider(s) charge(s).
Other Charges
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. Policy loan interest of 5.50% annually in policy years 1-10 and 3.8% annually
after policy year 10.
. Investment management fees and other operating expenses for the mutual fund
underlying a division.
. The annual expenses of Underlying Mutual Funds (as a percentage of average net
assets) as of December 31, 2000 were:
MANAGEMENT FEES 12B-1 OTHER TOTAL EXPENSES
UNDERLYING MUTUAL FUNDS AFTER REIMBURSEMENT FEES EXPENSES AFTER REIMBURSEMENT
----------------------- ------------------- ----- -------- -------------------
Principal Variable Contracts Fund
Asset Allocation Account 0.80% N/A 0.04% 0.84%
Balanced Account 0.58 N/A 0.02 0.60
Bond Account 0.49 N/A 0.02 0.51
Capital Value Account 0.59 N/A 0.01 0.60
Equity Growth Account 0.72 N/A 0.01 0.73
Government Securities Account 0.49 N/A 0.02 0.51
Growth Account 0.59 N/A 0.01 0.60
International Account 0.85 N/A 0.05 0.90
International SmallCap Account 1.20 N/A 0.24 1.44
LargeCap Growth Account 1.05 N/A 0.15 1.20/(1)(2)/
LargeCap Stock Index Account 0.29 N/A 0.11 0.40/(1)(2)/
MicroCap Account 0.86 N/A 0.20 1.06/(1)/
MidCap Account 0.60 N/A 0.02 0.62
MidCap Growth Account 0.85 N/A 0.11 0.96/(1)/
MidCap Growth Equity Account 0.75 N/A 0.34 1.09/(1)(2)/
MidCap Value Account 0.96 N/A 0.24 1.20/(1)/
Money Market Accounts 0.50 N/A 0.02 0.52
Real Estate Account 0.90 N/A 0.09 0.99
SmallCap Account 0.85 N/A 0.05 0.90
SmallCap Growth Account 1.00 N/A 0.02 1.02
SmallCap Value Account 0.92 N/A 0.24 1.16/(1)/
Utilities Account 0.60 N/A 0.03 0.63
AIM V.I. Growth Fund 0.61 N/A 0.22 0.83
AIM V.I. Growth and Income Fund 0.60 N/A 0.25 0.85
AIM V.I. Value Fund 0.61 N/A 0.23 0.84
American Century Variable Portfolios, Inc.
VP Income & Growth Fund 0.70 N/A 0.00 0.70
VP Ultra Fund 1.00/(3)/ N/A 0.00 1.00
Dreyfus Investment Portfolios
Founders Discovery Portfolio 0.62 0.25/(4)/ 0.63 1.50/(5)/
Fidelity Variable Insurance Fund II
Fidelity Contrafund 0.57 N/A 0.09 0.66
Fidelity Variable Insurance Fund
Fidelity Equity-Income 0.48 N/A 0.08 0.56
Fidelity High Income 0.58 N/A 0.10 0.68
INVESCO VIF - Dynamics Fund 0.75 N/A/ 0.34 1.09
INVESCO VIF - Health Sciences Fund 0.75 N/A 0.32 1.07
INVESCO VIF - Small Company Growth Fund 0.75 N/A 0.68 1.43
INVESCO VIF - Technology Fund 0.72 N/A 0.30 1.02
Janus Aspen Series
Aggressive Growth 0.65 0.25/(4)/ 0.02 0.92
Putnam Variable Trust
Putnam VT Global Asset Allocation Fund 0.65 0.25/(4)/ 0.12 0.94
Putnam VT Vista Fund 0.65 0.17/(4)/ 0.10 0.82
Putnam VT Voyager Fund 0.51 0.20/(4)/ 0.04 0.71
/(1)/ Principal Management Corporation voluntarily agreed to waive a portion
of its fee. Before the waiver, the total annual expenses through December
31, 2000 were: LargeCap Growth Account, 1.25%; LargeCap Stock Index Account,
0.46%; MicroCap, 1.20%; MidCap Growth, 1.01%; MidCap Growth Equity, 1.34%;
MidCap Value, 1.29%; and SmallCap Value Account, 1.34%.
/(2)/ Principal Management Corporation has voluntarily agreed to reimburse the
total annual expenses (if necessary) through April 30, 2002 so that they
will not exceed 1.20% for the LargeCap Growth Account; 0.40% for the
LargeCap Stock Index Account and 1.10% for the MidCap Growth Equity Account.
/(3)/ The fund has a stepped fee schedule. As a result, the management fee
will decrease as the assets increase, VP Ultra 1.00% of first $20 billion of
average net assets, and 0.95% of average net assets over $20 billion.
/(4)/ The Company and Princor Financial Services Corporation may receive a
portion of the underlying fund expenses for recordkeeping, marketing and
distribution services.
/(5)/ The Dreyfus Corporation has agreed, until December 31, 2001, to waive
receipt of a portion of its fees. Without the waiver, the fee would be
1.78%.
/(6)/ Actual annual class operating expenses were lower because a portion of
the brokerage commissions that the fund paid was used to reduce the fund's
expenses, and/or because through arrangements with the fund's custodian,
credits realized as a result of uninvested cash balances were used to reduce
a portion of the fund's custodian expenses. See the accompanying fund
prospectus for details.
/(7)/ Annual expenses are based upon expenses for the fiscal year ended
December 31, 2000, restated to reflect a reduction in the management fee for
the Janus Aspen Aggressive Growth Portfolio.
DEATH BENEFITS AND PROCEEDS
The death proceeds are paid to the beneficiary(ies) when the insured dies. Death
proceeds are calculated as of the date of death of the insured. The amount of
the death proceeds is:
. the death benefit plus interest (as explained in DEATH BENEFITS AND RIGHTS -
Death Proceeds);
. plus proceeds from any benefit riders on the life of the insured;
. minus policy loans and unpaid loan interest;
. minus any overdue monthly policy charges (if the insured died during a grace
period).
The Policy provides for three death benefit options. You choose an option on
your application. Subject to certain conditions, you may change your option
after the Policy has been issued.
Death proceeds are paid in cash or applied under a benefit payment option. We
pay interest on the death proceeds from the date of death of the insured until
the date of payment or application under a benefit payment option.
MATURITY PROCEEDS
If the insured is living on the maturity date, we will pay you (the owner) an
amount equal to the net surrender value. The Policy then terminates. Maturity
proceeds are paid in cash lump sum or applied under a benefit payment option.
ADJUSTMENT OPTIONS
You may send us a written request to increase or decrease the policy face
amount. No request is approved if the Policy is in a grace period or if monthly
policy charges are being waived under a rider.
The minimum amount of an increase is $50,000 and is subject to our underwriting
guidelines in effect at the time you request the increase.
You may only request a decrease in policy face amount:
. after the first policy anniversary; and
. if the request does not decrease the policy face amount below $100,000.
TERMINATION AND REINSTATEMENT
The Policy terminates when:
. you make a total policy surrender;
. death proceeds are paid;
. maturity proceeds are paid; or
. you do not make additional premium payments (after the expiration of a 61-day
grace period).
Subject to certain conditions, you may reinstate a Policy that terminated
because of insufficient values.
TEN DAY EXAMINATION OFFER (FREE-LOOK PROVISION)
. You may return the Policy during the free-look period that is generally 10
days but may be longer in certain states.
. We return either all premiums paid or the policy value, whichever is required
by applicable state law.
THE COMPANY
The Company is a stock life insurance company with its home office at: Principal
Financial Group, Des Moines, Iowa 50306. It is authorized to transact life and
annuity business in all of the United States and the District of Columbia. The
Company is a wholly owned subsidiary of Principal Financial Services, Inc.
On June 24, 1879, the Company was incorporated under Iowa law as a mutual life
insurance company named Bankers Life Association. It changed its name to Bankers
Life Company in 1911 and then to Principal Mutual Life Insurance Company in
1986. The name change to Principal Life Insurance Company and reorganization
into a mutual holding company structure took place July 1, 1998.
PRINCIPAL LIFE INSURANCE COMPANY VARIABLE LIFE SEPARATE ACCOUNT
The Separate Account was established under Iowa law on November 2, 1987. It was
then registered as a unit investment trust with the Securities and Exchange
Commission ("SEC"). This registration does not involve SEC supervision of the
investments or investment policies of the Separate Account.
The income, gains, and losses, whether or not realized, of the Separate Account
are credited to or charged against the Separate Account without regard to other
income, gains, or losses of the Company. Obligations arising from the Policy,
including the promise to make benefit option payments, are our general corporate
obligations. However, the Policy provides that the portion of the Separate
Account's assets equal to the reserves and other liabilities under the Policy
are not charged with any liabilities arising out of any other business of the
Company.
The assets of each division invest in a corresponding underlying mutual fund.
New divisions may be added and made available. Divisions may also be eliminated
from the Separate Account following SEC approval.
THE FUNDS
The funds are mutual funds registered under the Investment Company Act of 1940
as open-end diversified management investment companies. The funds provide the
investment vehicles for the divisions. A full description of the funds, their
investment objectives, policies and restrictions, charges and expenses and other
operational information is contained in the attached prospectuses (which should
be read carefully before investing). Additional copies of these documents are
available from a sales representative or our home office.
The following is a brief summary of the investment objectives of each division:
ASSET ALLOCATION DIVISION
INVESTS IN: Principal Variable Contracts Fund - Asset Allocation
Account
INVESTMENT ADVISOR: Morgan Stanley Asset Management through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to generate a total investment return
consistent with the preservation of capital. The Account intends
to pursue a flexible investment policy in seeking to achieve
this investment objective.
BALANCED DIVISION
INVESTS IN: Principal Variable Contracts Fund - Balanced Account
INVESTMENT ADVISOR: (equity securities portion) Invista Capital
Management, LLC through a sub-advisory agreement
(fixed-income securities portion) Principal Capital Income
Investors, LLC through a sub-advisory agreement
INVESTMENT OBJECTIVE: to generate a total return consisting of
current income and capital appreciation while assuming
reasonable risks in furtherance of this objective.
BOND DIVISION
INVESTS IN: Principal Variable Contracts Fund - Bond Account
INVESTMENT ADVISOR: Principal Management Corporation
INVESTMENT OBJECTIVE: to provide as high a level of income as is
consistent with preservation of capital and prudent investment
risk.
CAPITAL VALUE DIVISION
INVESTS IN: Principal Variable Contracts Fund - Capital Value
Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to provide long-term capital of 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.
EQUITY GROWTH DIVISION
INVESTS IN: Principal Variable Contracts Fund - Equity Growth
Account
INVESTMENT ADVISOR: Morgan Stanley Asset Management through a
sub-advisory agreement
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.
GOVERNMENT SECURITIES DIVISION
INVESTS IN: Principal Variable Contracts Fund - Government
Securities Account
INVESTMENT ADVISOR: Principal Capital Income Investors, LLC
through a sub-advisory agreement
INVESTMENT OBJECTIVE: to seek a high level of current income,
liquidity and safety of principal. The Account seeks to achieve
its objective through the purchase of obligations issued or
guaranteed by the United States Government or its agencies.
Account shares are not guaranteed by the United States
Government.
GROWTH DIVISION
INVESTS IN: Principal Variable Contracts Fund - Growth Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
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 invest in other securities.
INTERNATIONAL DIVISION
INVESTS IN: Principal Variable Contracts Fund - International
Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
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.
INTERNATIONAL SMALLCAP DIVISION
INVESTS IN: Principal Variable Contracts Fund - International
SmallCap Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
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-United States companies
with comparatively smaller market capitalizations.
LARGECAP GROWTH DIVISION
INVESTS IN: Principal Variable Contracts Fund - LargeCap Growth
Account
INVESTMENT ADVISOR: Janus Capital Corporation through a
sub-advisory agreement
INVESTMENT OBJECTIVE: seeks long-term growth of capital by
investing primarily in equity securities of growth companies
with market capitalization of greater than $10 billion.
LARGECAP STOCK INDEX DIVISION
INVESTS IN: Principal Variable Contracts Fund - LargeCap Stock
Index Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to seek long-term growth of capital. The
Account attempts to mirror the investment results
of the Standard & Poor's 500 Index.
MICROCAP DIVISION
INVESTS IN: Principal Variable Contracts Fund - MicroCap Account
INVESTMENT ADVISOR: Goldman Sachs Asset Management through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to seek long-term growth of capital. The
Account will attempt to achieve its objective by investing
primarily in value and growth oriented companies with small
market capitalizations, generally less than $700 million.
MIDCAP DIVISION
INVESTS IN: Principal Variable Contracts Fund - MidCap Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to achieve capital appreciation by investing
primarily in securities of emerging and other growth-oriented
companies.
MIDCAP GROWTH DIVISION
INVESTS IN: Principal Variable Contracts Fund - MidCap Growth
Account
INVESTMENT ADVISOR: Dreyfus Corporation through a sub-advisory
agreement
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 GROWTH EQUITY DIVISION
INVESTS IN: Principal Variable Contracts Fund - MidCap Growth
Equity Account
INVESTMENT ADVISOR: Turner Investment Partners, Inc. through a
sub-advisory agreement
INVESTMENT OBJECTIVE: seeks to achieve long-term growth of capital
by investing primarily in medium capitalization U.S. companies
with strong earnings growth potential.
MIDCAP VALUE DIVISION
INVESTS IN: Principal Variable Contracts Fund - MidCap Value
Account
INVESTMENT ADVISOR: Neuberger Berman Management, Inc. through a
sub-advisory agreement.
INVESTMENT OBJECTIVE: seeks long-term growth of capital by
investing primarily in equity securities of companies with value
characteristics and market capitalizations in the $1 billion to
$10 billion range.
MONEY MARKET DIVISION
INVESTS IN: Principal Variable Contracts Fund - Money Market
Account
INVESTMENT ADVISOR: 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.
REAL ESTATE DIVISION
INVESTS IN: Principal Variable Contracts Fund - Real Estate
Account
INVESTMENT ADVISOR: 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.
SMALLCAP DIVISION
INVESTS IN: Principal Variable Contracts Fund - SmallCap Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to seek long-term growth of capital. The
Account will attempt to achieve its objective by investing
primarily in equity securities of both growth and value oriented
companies with comparatively smaller market capitalizations.
SMALLCAP GROWTH DIVISION
INVESTS IN: Principal Variable Contracts Fund - SmallCap Growth
Account
INVESTMENT ADVISOR: Berger LLC through a sub-advisory agreement
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 DIVISION
INVESTS IN: Principal Variable Contracts Fund - SmallCap Value
Account
INVESTMENT ADVISOR: J.P. Morgan Investment Management, Inc.
through a sub-advisory agreement
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.
UTILITIES DIVISION
INVESTS IN: Principal Variable Contracts Fund - Utilities Account
INVESTMENT ADVISOR: Invista Capital Management, LLC through a
sub-advisory agreement
INVESTMENT OBJECTIVE: to seek to provide current income and
long-term growth of income and capital by investing primarily in
equity and fixed- income securities of companies in the public
utilities industry.
AIM V.I. GROWTH DIVISION
INVESTS IN: AIM V.I. Growth Fund
INVESTMENT ADVISOR: A I M Advisors, Inc.
INVESTMENT OBJECTIVE: seeks growth of capital.
AIM V.I. GROWTH AND INCOME DIVISION
INVESTS IN: AIM V.I. Growth and Income Fund
INVESTMENT ADVISOR: A I M Advisors, Inc.
INVESTMENT OBJECTIVE: seeks growth of capital with a secondary
objective of current income.
AIM V.I. VALUE DIVISION
INVESTS IN: AIM V.I. Value Fund
INVESTMENT ADVISOR: A I M Advisors, Inc.
INVESTMENT OBJECTIVE: seeks long-term growth of capital. Income is
a secondary objective.
AMERICAN CENTURY VP INCOME & GROWTH DIVISION
INVESTS IN: American Century Variable Portfolios, Inc. VP Income &
Growth
INVESTMENT ADVISOR: American Century Investment Management, Inc.
INVESTMENT OBJECTIVE: seeks dividend growth, current income and
appreciation. The account will seek to achieve its investment
objective by investing in common stocks.
AMERICAN CENTURY VP ULTRA DIVISION
INVESTS IN: American Century Variable Portfolios, Inc. VP Ultra
INVESTMENT ADVISOR: American Century Investment Management, Inc.
INVESTMENT OBJECTIVE: seeks long-term capital growth.
DIP FOUNDERS DISCOVERY DIVISION
INVESTS IN: Dreyfus Investment Portfolios Founders Discovery
Portfolio
INVESTMENT ADVISOR: Founders Asset Management LLC through a
sub-advisory agreement
INVESTMENT OBJECTIVE: seeks capital appreciation. To pursue this
goal, the portfolio invests primarily in equity securities of
small, U.S. based companies which are characterized as "growth"
companies.
FIDELITY VIP CONTRAFUND DIVISION
INVESTS IN: Fidelity VIP II Contrafund Portfolio
INVESTMENT ADVISOR: Fidelity Management and Research Company
INVESTMENT OBJECTIVE: to seek long-term capital appreciation.
FIDELITY VIP EQUITY - INCOME DIVISION
INVESTS IN: Fidelity VIP Equity - Income Portfolio
INVESTMENT ADVISOR: Fidelity Management and Research Company
INVESTMENT OBJECTIVE: to seek reasonable income by investing
primarily in income-producing equity securities.
FIDELITY VIP HIGH INCOME DIVISION
INVESTS IN: Fidelity VIP High Income Portfolio
INVESTMENT ADVISOR: Fidelity Management and Research Company
INVESTMENT OBJECTIVE: to seek a high level of current income by
investing primarily in high yielding, lower quality, fixed
income securities, while also considering growth of capital.
INVESCO VIF - DYNAMICS DIVISION
INVESTS IN: INVESCO VIF - Dynamics Fund
INVESTMENT ADVISOR: INVESCO Funds Group
INVESTMENT OBJECTIVE: seeks long-term capital growth.
INVESCO VIF - HEALTH SCIENCES DIVISION
INVESTS IN: INVESCO VIF - Health Sciences Fund
INVESTMENT ADVISOR: INVESCO Funds Group
INVESTMENT OBJECTIVE: seeks long-term capital growth.
INVESCO VIF - SMALL COMPANY GROWTH DIVISION
INVESTS IN: INVESCO VIF - Small Company Growth Fund
INVESTMENT ADVISOR: INVESCO Funds Group
INVESTMENT OBJECTIVE: seeks long-term capital growth.
INVESCO VIF - TECHNOLOGY DIVISION
INVESTS IN: INVESCO VIF - Technology Fund
INVESTMENT ADVISOR: INVESCO Funds Group
INVESTMENT OBJECTIVE: seeks long-term capital growth.
JANUS ASPEN AGGRESSIVE GROWTH DIVISION
INVESTS IN: Janus Aspen Series Aggressive Growth Portfolio
INVESTMENT ADVISOR: Janus Capital Corporation
INVESTMENT OBJECTIVE: seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks
selected for their growth potential, and normally invests at
least 50% of its equity assets in medium-sized companies.
PUTNAM VT GLOBAL ASSET ALLOCATION DIVISION
INVESTS IN: Putnam VT Global Asset Allocation Fund
INVESTMENT ADVISOR: Putnam Investment Management, Inc.
INVESTMENT OBJECTIVE: to seek a high level of long-term total
return consistent with preservation of capital.
PUTNAM VT VISTA DIVISION
INVESTS IN: Putnam VT Vista Fund
INVESTMENT ADVISOR: Putnam Investment Management, Inc.
INVESTMENT OBJECTIVE: to seek capital appreciation.
PUTNAM VT VOYAGER DIVISION
INVESTS IN: Putnam VT Voyager Fund
INVESTMENT ADVISOR: Putnam Investment Management, Inc.
INVESTMENT OBJECTIVE: to seek capital appreciation.
An Investment Advisor agrees to provide investment advisory services for a
specific underlying Mutual Fund. For these services, the Investment Advisor is
paid a fee.
The Company purchases and sells fund shares for the Separate Account at their
net asset value without any sales or redemption charge. The Separate Account has
divisions that correspond to interests in the underlying mutual funds. The
assets of each division are separate from the others. A division's performance
has no effect on the investment performance of any other division.
THE POLICY
The descriptions that follow are based on provisions of the Policy offered by
this prospectus.
TO BUY A POLICY
A completed application and required supplements must be submitted to us through
an agent or broker selling the Policy.
The minimum policy face amount when the Policy is originally issued is $100,000.
We reserve the right to increase or decrease the minimum policy face amount. The
increased minimum face amount would apply only to Policies issued after the
effective date of the increase.
To issue a Policy, we require that the insured be age 85 or younger as of the
policy date. Other underwriting restrictions may apply.
An applicant for the Policy must:
. furnish satisfactory evidence of insurability of the insured; and
. meet our insurance underwriting guidelines and suitability rules.
If you want insurance coverage to start at the time the application is
submitted, you must send a payment with your completed application. The amount
is shown on the policy illustration provided to you by your registered
representative. If this amount is submitted with the application, a conditional
receipt is given to you. The receipt acknowledges the initial payment and
details any interim conditional insurance coverage.
We reserve the right to reject any application or related premium if we
determine that our underwriting guidelines, suitability rules or procedures have
not been met.
Policy Date
-----------
If we issue a Policy, a policy date is determined. Policies will not be dated on
the 29th, 30th or 31st of any month. Policies that would otherwise be dated on
these dates are dated on the 28th of the same month. Policies that are issued on
a COD basis and that would otherwise be dated on the 29th, 30th or 31st of a
month will be dated on the first day of the following month. Your policy date is
shown on the current data pages. Current data pages are the most recent policy
specification pages issued to a policy owner and located in the policy.
Upon specific request and our approval, your Policy may be backdated. The policy
date may not be more than six months prior to the date of application (or
shorter period if required by state law). Payment of at least the monthly policy
charges is required for the backdated period. Monthly policy charges are
deducted from the policy value for the backdated period.
Effective Date
--------------
The Policy date and the effective date are the same unless:
. a backdated Policy date is requested; or
. a Policy is applied for on a COD basis (the effective date is the date we
received at least the monthly policy charge); or
. application amendments are required (the effective date is the date we
receive, review and accept amendments).
The insurance coverage does not take effect until you actually receive the
Policy. If the insured was to die before the owner actually receives the Policy,
there is no coverage under the Policy (coverage is determined solely under the
terms of conditional receipt, if any).
PAYMENT OF PREMIUMS
The amount and frequency of your premium payments affects the policy value, the
net surrender value and how long the Policy remains in force. After the initial
premium, you may determine the amount and timing of subsequent premium payments
within certain restrictions. The no lapse guarantee premium is shown on the
current data pages for your Policy. You must pay premiums to us at our home
office, Principal Life Insurance Company, 801 Grand (IDPC), Des Moines, Iowa
50392.
The planned periodic premium schedule reflects the premiums the policy owner
PLANS to pay at the time the contract is issued. Determination of whether the
no-lapse guarantee remains in effect is based on the ACTUAL premiums paid.
The no-lapse guarantee provision provides that, subject to satisfaction of the
no-lapse premium requirement, the policy will not terminate during the first
five policy years even if the policy's net surrender value is insufficient to
cover the monthly policy charge.
The no-lapse premium requirement requires that (a minus b) is greater than equal
to (c) where:
. (a) is the sum of premiums paid;
. (b) is the sum of all existing policy loans, unpaid loan interest and partial
surrenders; and
. (c) is the sum of the no lapse guarantee monthly premiums since the policy
date to the most recent monthly date.
No-lapse guarantee premiums are per $1000 of face amount and vary by issue age,
gender and smoking status. There are no policy charges for the no-lapse
guarantee.
The death benefit guarantee rider provides that, subject to satisfaction of the
death benefit guarantee requirement, the policy will not terminate prior to the
later of the insured attaining age 65 or 5 years from policy issue even if the
policy's net surrender value is insufficient to cover the monthly policy charge.
The death benefit guarantee premium requirement requires that (a minus b) is
greater than equal to (c) where:
. (a) is the sum of premiums paid;
. (b) is the sum of all existing policy loans, unpaid loan interest and partial
surrenders; and
. (c) is the sum of the death benefit guarantee monthly premiums since the
policy date to the most recent monthly date.
Death benefit guarantee premiums are per $1000 of face amount and vary by issue
age and gender. There are no policy charges for the death benefit guarantee. The
death benefit guarantee coverage period is limited to a maximum of 20 years in
New Jersey and Texas.
Preauthorized withdrawals may be set up on a monthly basis (to allow us to
automatically deduct premium payments from your checking or other financial
institution account). We send premium reminder notices to you if you establish
an annual, semiannual or quarterly premium payment schedule. You may also make
unscheduled payments to us at our home office or by payroll deduction (where
permitted by state law and approved by us).
PREMIUM LIMITATIONS
In no event may the total of all premiums paid, both scheduled and unscheduled,
be more than the current maximum premium payments allowed for life insurance
under the Internal Revenue Code (the "Code"). If you make a premium payment that
would result in total premiums exceeding the current maximum limitation, we only
accept that portion of the payment that makes total premiums equal the maximum.
Any excess will be returned and no further premiums are accepted until allowed
by the current maximum premium limitations.
ALLOCATION OF PREMIUMS
Your initial net premium (and other net premiums we receive prior to the
effective date and twenty days after the effective date) is allocated to the
Money Market division at the end of the valuation date we receive the premium.
Twenty-one days after the effective date, the money is reallocated to the
divisions and/or to the Fixed Account according to your instructions. Generally,
the twenty day period corresponds to the maximum free-look period (except for
policies purchased in California by applicants over age 60) (see, Ten Day
Examination Offer (Free-Look Provision)). If the twenty-first day is not a
business day, the transfer will occur on the first business day following the
twenty-first day from the effective date.
Example: The effective date of your Policy is February 1st. Your net
premium is allocated to the Money Market division at the end of the
valuation period we receive the premium. At the close of business on
February 21st, the net premium is reallocated to the division and/or
Fixed Account that you selected.
Net premium payments received after the twenty-day period are allocated to the
divisions or to the Fixed Account according to your instructions. For each
division and the Fixed Account, the allocation percentage must be zero or a
whole number. The total of all the percentages for the divisions and the Fixed
Account must equal 100. The percentage allocation for future premium payments
may be changed, without charge, at any time by:
. sending a written request to us;
. if telephone privileges apply, calling us at 1-800-247-9988; or
. if internet privileges apply visiting www.principal.com.
The allocation changes are effective at the end of the valuation period in which
your new instructions are received.
TEN DAY EXAMINATION OFFER (FREE-LOOK PROVISION)
Under state law, you have the right to return the Policy for any reason during
the free-look period and receive your premiums paid. (If you apply for your
Policy in California, the amount refunded is described below.) Your request to
return the Policy must be in writing. The request and the Policy must be mailed
to us or returned to the agent no later (as determined by the postmark) than the
last day of the free-look period as shown below.
The free-look period is the later of:
. 10 days* after the Policy is delivered to you;
. 10 days* after a written notice is delivered or mailed to you which tells
about the cancellation right; or
. 45 days after you complete the application.
* Different free-look periods apply if your Policy is issued in: California
and you are age 60 and over (30 day free-look period); Colorado (15 day
free-look period); or Idaho or North Dakota (20 day free-look period).
If you applied for your Policy in California, the amount refunded is:
. the policy value as of the date we receive your written request for
cancellation;
. plus the premium expense charge(s) deducted from the premium;
. plus the monthly policy charge(s) deducted from the policy value.
NOTES:
. See GENERAL PROVISIONS - Delay of Payments.
. If the purchase of this Policy is a replacement for another life insurance
policy or an annuity contract, different free-look periods may apply. We
reserve the right to keep the initial premium payment in the Money Market
division longer than 20 days to correspond to the free-look periods of a
particular state's replacement requirements.
POLICY VALUES
Your policy value is equal to the sum of the values in your divisions, Fixed
Account and Loan Account (see THE FIXED ACCOUNT and THE POLICY - Loan Account).
The policy value also reflects your premium payments, partial surrenders, policy
loans and the policy expenses deducted from the divisions and the Fixed Account.
There is no guaranteed minimum division value. Its value reflects the investment
experience of the division that you choose. It is possible that the investment
performance could cause a loss of the entire amount allocated to the
divisions. Without additional premium payments or investments in the Fixed
Account or a death benefit guarantee rider, this could result in no death
benefit upon the insured's death.
At the end of any valuation period, your value in a division is:
. the number of units you have in the division
. multiplied by the value of a unit in the division.
The number of units is the total of units purchased by allocations to the
division from:
. your initial premium payment (less premium expense charges);
. plus subsequent premium payments (less premium expense charges);
. plus transfers from another division or the Fixed Account
minus units sold:
. for partial surrenders from the division;
. as part of a transfer to another division, the Fixed Account or the Loan
Account; and
. to pay monthly policy charges.
Unit values are calculated each valuation date. To calculate the unit value of a
division, the unit value from the previous valuation date is multiplied by the
division's net investment factor for the current valuation period. The number of
units does not change due to a change in unit value.
The net investment factor measures the performance of each division. The net
investment factor for a valuation period is calculated as follows:
[{the share price of the underlying mutual fund at the end of the valuation
period before that day's transactions
plus
the per share amount of the dividend (or other distribution) made by the mutual
fund during the valuation period}
divided by
the share price of the underlying mutual fund at the end of the previous
valuation period after that day's transactions].
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.
DIVISION TRANSFERS
You may request an unscheduled transfer or set up a periodic transfer by:
. sending us a written request;
. calling us if telephone privileges apply (1-800-247-9988); or
. visiting www.principal.com (if internet privileges apply).
You must specify the dollar amount or percentage to transfer from each division.
The transfer is made, and the values determined as of the end of the valuation
period in which we receive your request. In states where allowed, we reserve the
right to reject transfer instructions from someone providing them for multiple
Policies for which he or she is not the owner.
You may not make a transfer to the Fixed Account if:
. a transfer has been made from the Fixed Account to a division within six
months; or
. immediately after the transfer, the Fixed Account value would be more than
$1,000,000 (without our prior approval).
Unscheduled Transfers
---------------------
You may make unscheduled transfers from a division to another division or to the
Fixed Account. The minimum transfer amount is the lesser of $100 or the value of
your division.
Scheduled Transfers (dollar cost averaging (DCA))
-------------------------------------------------
You may elect to have automatic transfers made on a periodic basis without an
additional charge.
. The amount of the transfer is:
. the dollar amount you select (the minimum is the lesser of $100 or the value
of the division); or
. a percentage of the division value as of the date you specify (other than
the 29th, 30th or 31st).
. You select the transfer date (other than the 29th, 30th or 31st) and the
transfer frequency (annually, semi-annually, quarterly or monthly).
. If the selected date is not a valuation date, the transfer is completed on the
next valuation date.
. The value of the division must be equal to or more than $2,500 when your
scheduled transfers begin.
. Transfers continue until your interest in the division has a zero balance or
we receive notice to stop them.
. 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.
FIXED ACCOUNT TRANSFERS
Transfers from your investment in the Fixed Account to your division(s) are
subject to certain limitations. You may transfer amounts by making either a
scheduled or unscheduled Fixed Account transfer. You may not make both a
scheduled and unscheduled Fixed Account transfer in the same policy year. In
states where allowed, we reserve the right to reject transfer instructions from
someone providing them for multiple Policies for which he or she is not the
owner.
Unscheduled Transfers
---------------------
You may make one unscheduled Fixed Account transfer to a division(s) within the
30 day period following each policy anniversary.
. You must specify the dollar amount or percentage to be transferred (not to
exceed 25% of the Fixed Account value as of the most recent policy
anniversary).
. The minimum transfer amount must be at least $100 (or the entire value of your
Fixed Account if less).
. If your Fixed Account value is less than $1,000, you may transfer up to 100%
of your Fixed Account.
Scheduled Transfers (dollar cost averaging (DCA))
-------------------------------------------------
You may make scheduled transfers on a monthly basis from the Fixed Account to
your division(s) without an additional charge as follows:
. The value of your Fixed Account must be equal to or more than $2,500 when your
scheduled transfers begin. We reserve the right to change this amount but it
will never be more than $10,000.
. The amount of the transfer is:
. the dollar amount you select (minimum of $100); or
. a percentage of the Fixed Account value (the maximum amount of the transfer
is 2% of the Fixed Account value as of the specified date) as of the date
you specify which may be:
. the later of the policy date or most recent policy anniversary date; or
. the date the Company receives your request.
. 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 continue until your value in the Fixed Account has a zero
balance or we receive your notice to stop them. You may change the amount of the
transfer once each policy year by:
. sending us a written request;
. calling us if telephone privileges apply (1-800-247-9988); or
. visiting www.principal.com (if internet privileges apply).
If you stop the transfers, you may not start them again until six months after
the last scheduled transfer.
AUTOMATIC PORTFOLIO REBALANCING (APR)
APR allows you to maintain a specific percentage of your policy value in your
divisions over time.
Example: You may choose to rebalance so that 50% of your policy values are
in the Bond division and 50% in the Capital Value division. At the
end of the specified period, market changes may have caused 60% of
your value to be in the Bond division and 40% in the Capital Value
division. By rebalancing, units from the Bond division are sold and
the proceeds are used to purchase units in the Capital Value division
so that 50% of the policy values are once again invested in each
division.
You may elect APR at the time of application or after the Policy has been
issued.
APR transfers:
. do not begin until the expiration of the free-look period;
. are done without charge;
. may be done on the frequency you specify:
. quarterly APR transfers may be done on a calendar year or policy year basis,
. semiannual or annual APR transfers may only be done on a policy year basis.
. may be done:
. if telephone privileges apply, by calling us at 1-800-247-9988;
. mailing us your written request;
. faxing your request to us; or
. if internet privileges apply, by visiting www.principal.com.
. The transfers are made at the end of the next valuation period after we
receive your instruction.
. APR is not available for values in the Fixed Account. If you have scheduled
transfers from divisions, APR is not available for those divisions.
POLICY LOANS
While your Policy is in effect and has a net surrender value, you may borrow
money from us with the Policy as the security for the policy loan.
. The minimum policy loan is $500.
. The maximum amount you may borrow is 90% of the net surrender value as of the
date we process the policy loan.
. If telephone privileges apply, you may request a policy loan of $5,000 or less
by calling us at 1-800-247-9988. If you do not have telephone privileges or
are requesting a policy loan of more than $5,000, your request must be made in
writing.
. Generally, policy loan proceeds are sent within five business days from the
date we receive your request (see GENERAL PROVISIONS - Delay of Payments).
. Requests for policy loans from any joint owner are binding on all joint
owners.
LOAN ACCOUNT
When a policy loan is taken, an amount equal to the loan is transferred from
your division(s) and Fixed Account to your Loan Account. Loan Accounts are part
of our General Account. You may instruct us on the proportions to be taken from
your accounts. If you do not provide such instruction, the loan amount is
withdrawn in the same proportion as the allocation used for the most recent
monthly policy charge. Any loan interest due and unpaid is transferred in the
same manner.
Your Loan Account earns interest from the date of transfer. The loan account
interest rate is 4.00% per year. Interest accrues daily and is paid at the end
of the policy year.
You are charged interest on your policy loan. During the first ten policy years,
the interest rate is 5.50% per year. After policy year ten, the interest rate is
3.80% per year. Interest accrues daily and is due and payable at the end of the
policy year. If interest is not paid when due, it is added to the loan amount.
Adding unpaid interest to the policy loan amount causes additional amounts to be
withdrawn from your Fixed Account and/or division(s) and transferred to the Loan
Account. Withdrawals are made in the same proportions as described above.
Policy loans and unpaid loan interest reduce your net surrender value. If the
net surrender value is less than the monthly policy charges on a monthly date,
the 61-day grace period provision applies (see POLICY TERMINATION AND
REINSTATEMENT - Policy Termination).
While the Policy is in force and before the insured dies, policy loans and loan
interest may be repaid as follows:
. policy loans may be repaid totally or in part;
. repayments are allocated to the division(s) and Fixed Account in the
proportions used for allocation of premium payments; and
. payments that we receive that are not designated as premium payments are
applied as loan repayments if a policy loan is outstanding.
A policy loan generally has a permanent effect on policy values. If a policy
loan had not been made, the policy value would reflect the investment experience
of the division(s) and the interest credited to the Fixed Account. In addition,
policy loans and unpaid loan interest are subtracted from:
. death proceeds at the death of the insured;
. surrender value upon total surrender or termination of a Policy; and
. maturity proceeds payable at maturity.
If the Policy lapses with an outstanding loan balance, there may be tax
consequences. Please consult a competent tax advisor.
SURRENDERS
You must send us a written request for any surrender. The request must be signed
by all owners, irrevocable beneficiary(ies), if any, and any assignees.
Total surrender
---------------
You may surrender the Policy on or before the maturity date while the Policy is
in effect. You receive the net surrender value at the end of the valuation
period during which we receive your surrender request. The net surrender value
is the total of the values of your divisions plus your Fixed Account plus your
Loan Account minus any applicable surrender charge, policy loans and unpaid loan
interest (see CHARGES AND DEDUCTIONS - Surrender Charge).
. We reserve the right to require you to return the Policy to us prior to making
any payment though this does not affect the amount of the cash surrender
value.
. If the total surrender is within ten years of the policy date or a policy face
amount increase, a surrender charge is imposed.
Partial surrender
-----------------
After the first policy anniversary and prior to the maturity date, you may
surrender a part of the Fixed Account and/or division value by sending us a
written request. The surrender is effective as of the end of the valuation
period during which we receive your written request for surrender. You may not
request more than two partial surrenders in each policy year.
The minimum amount of a partial surrender is $500. The total of your two partial
surrenders during a policy year may not be greater than 75% of the net surrender
value (as of the date of the request for the first partial surrender in that
policy year). The partial surrender may not decrease the policy face amount to
less than $100,000.
Your policy value is reduced by the amount of the surrender. We surrender units
from the division and/or values from the Fixed Account to equal the dollar
amount of the surrender request. The surrender is deducted from your Fixed
Account value and/or your division(s) according to the surrender allocation
percentages you specify. If surrender allocation percentages are not specified,
we use your monthly policy charge allocation percentages. Reduction of the total
face amount is made on a last-in, first-out basis. No surrender charge is
imposed on a partial surrender.
If Option 1 death benefit is in effect, the total face amount is reduced by the
amount of the partial surrender. If Option 3 death benefit is in effect, then
the total face amount may be reduced by the amount of the partial surrender if
the total partial surrenders exceed the premiums paid. Any reduction of the
total face amount will be made on a last in, first out basis. Total and partial
surrenders from the Policy are generally paid within five business days of our
receipt of your written request for surrender. Certain delays in payment are
permitted (see GENERAL PROVISIONS - Delay of Payments).
DEATH BENEFITS AND RIGHTS
DEATH PROCEEDS
If the insured dies before the maturity date, we pay death proceeds.
. We must receive proof of the death of the insured and all other required
documents.
. Payments are made to your named beneficiary(ies) under your designated death
benefit option (see GENERAL PROVISIONS - Beneficiary).
The payments are made in cash lump sum or under a benefit payment option
selected by the beneficiary(ies). Death proceeds are calculated as of the date
of the insured's death and include:
. the death benefit described below;
. plus proceeds from any benefit rider on the insured's life;
. minus policy loans and unpaid loan interest;
. minus any overdue monthly policy charges if the insured died during a grace
period;
. plus interest on the death proceeds as required by state law.
DEATH BENEFIT OPTION
You choose death benefit Option 1, Option 2 or Option 3 at the time of
application.
Option 1
--------
The death benefit is the greater of 1) the Policy's current face amount, or 2)
the Policy value on the date of death multiplied by the applicable percentage.
The applicable percentage is 250% for an insured currently age 40 or below. The
percentage declines with increasing ages. The death benefit remains level unless
the applicable percentage of Policy value exceeds the current face amount (in
which case the death benefit varies as the Policy value varies).
Illustration of Option 1
------------------------
Assume that the insured's current age is under age 40, there is no loan amount
and the Policy face amount is $500,000.
Under Option 1, the death benefit must be equal or greater than 250% of the
Policy value. If the Policy value is more than $200,000, the death benefit is
greater than $500,000. Each additional dollar added to the Policy value above
$200,000 increases the death benefit by $2.50. If the Policy value exceeds
$200,000 and increases by $100 because of investment performance or premium
payments, the death benefit increases by $250.
Similarly, if the Policy value exceeds $200,000, each dollar taken out of the
Policy value reduces the death benefit by $2.50. For example, if the Policy
value is reduced from $500,000 to $450,000 because of partial surrenders,
charges or negative investment performance, the death benefit is reduced from
$1,250,000 to $1,125,000. However, if at any time the Policy value multiplied by
the applicable percentage is less than the face amount, the death benefit equals
the current face amount of the Policy.
Option 2
--------
The death benefit is equal to the greater of 1) the current face amount plus the
Policy value on the date of death, or 2) the Policy value on the date of death
multiplied by the applicable percentage.
Illustration of Option 2
------------------------
Assume that the insured's current age is under 40, there is no loan amount and
the Policy face amount is $500,000.
A Policy with a Policy value of $100,000 has a death benefit of $600,000
($500,000 plus $100,000). A Policy value of $300,000 has a death benefit of
$800,000 ($500,000 plus $300,000). The death benefit however must be at least
250% of the Policy value. As a result, if the Policy value exceeds $333,334, the
death benefit is greater than the face amount plus Policy value. Each additional
dollar of Policy value above $333,334 increases the death benefit by $2.50. If
the Policy value exceeds $333,334 and increases by $100 because of investment
performance or premium payments, the death benefit increases by $250.
If the Policy value exceeds $333,334, each dollar taken out of the Policy value
reduces the death benefit by $2.50. For example, the Policy value is reduced
from $400,000 to $340,000 because of partial surrenders, charges or negative
investment performance, the death benefit is reduced from $1,000,000 to
$850,000. However, if the Policy value multiplied by the applicable percentage
is less than the Policy face amount plus the Policy value, then the death
benefit is the current face amount plus the Policy value.
Option 3
--------
The death benefit is equal to the greater of 1) the current face amount plus the
premiums paid minus the withdrawals up to the date of death, or 2) the Policy
value on the date of death multiplied by the applicable percentage.
Illustration of Option 3
------------------------
Assume that the insured's current age is under 40, there is no loan amount and
the Policy face amount is $500,000.
A Policy with a Policy value of $100,000, premiums paid to date of $60,000 and
withdrawals to date of $20,000 has a death benefit of $540,000 ($500,000 plus
$60,000 minus $20,000). A Policy with a Policy value of $300,000, premiums paid
to date of $225,000 and withdrawals to date of $75,000 has a death benefit of
$650,000 ($500,000 plus $225,000 minus $75,000). The death benefit however must
be at least 250% of the Policy value. As a result, if the Policy value exceeds
$260,000, the death benefit is greater than the face amount plus premiums paid
to date minus withdrawals to date. Each additional dollar of Policy value above
$260,000 increases the death benefit by $2.50. If the Policy value exceeds
$260,000 and increases by $100 because of investment performance or premium
payments, the death benefit increases by $250.
If the Policy value exceeds $260,000, each dollar taken out of the Policy value
reduces the death benefit by $2.50. For example, the Policy value is reduced
from $300,000 to $240,000 because of charges or negative investment performance,
the death benefit is reduced from $750,000 to $600,000. However, if the Policy
value multiplied by the applicable percentage is less than the Policy face
amount plus the premiums paid to date minus the withdrawals to date, then the
death benefit is the current face amount plus the premiums paid to date minus
the withdrawals to date.
The applicable percentage lowers as the insured's age increases. If the current
age of the insured in the illustration is 50 (rather than age 40), the
applicable percentage would be 185%.
APPLICABLE PERCENTAGES*
(For ages not shown, the applicable percentages decrease by a pro-rata portion
for each full year.)
INSURED'S ATTAINED AGE PERCENTAGE
---------------------- ----------
40 and under 250
45 215
50 185
55 150
60 130
65 120
70 115
75 through 90 105
95 and older 100
* We reserve the right, where allowed by law, to change or delete the
percentages as required by changes to the Internal Revenue Code.
CHANGE IN DEATH BENEFIT OPTION
You may change the death benefit option on or after the first policy
anniversary. Up to two changes are allowed per policy year. Your request must be
made in writing and approved by us. The effective date of the change will be the
monthly date that coincides with or next follows our approval. Changing the
death benefit option changes the future cost of insurance.
If you change from Option 1 to Option 2, the new total face amount is the old
total face amount decreased by the policy value (as of the effective date of the
change). The change is not allowed if it would result in a policy face amount of
less than $100,000. A change from Option 1 to Option 2 may require evidence of
insurability for the new death benefit if required by our underwriting
guidelines in place at the time of your request.
If you change from Option 2 to Option 1, the new total face amount is the old
total face amount increased by the policy value (as of the effective date of the
change). A change from Option 2 to Option 1 does not require evidence of
insurability.
If you change from Option 3 to Option 1, the new total face amount is the old
total face amount increased by premiums paid less withdrawals made (as of the
effective date of the change). If you change from Option 3 to Option 2, the new
policy face amount is the old policy face amount adjusted by premiums paid (less
withdrawals made) decreased by the policy value (as of the effective date of the
change). A change from Option 3 to Option 2 may require evidence of insurability
for the new death benefit if required by our underwriting guidelines in place at
the time of your request.
You may not change from Option 1 to Option 3 or from Option 2 to Option 3.
ADJUSTMENT OPTIONS
Increase in policy face amount
------------------------------
You may request an increase at any time provided that the Policy is not in a
grace period, and monthly policy charges are not being waived under a rider. The
minimum increase in policy face amount is $50,000. A policy face amount increase
request made in the first 60 policy months will increase the no lapse guarantee
premium for the remainder of the 60 months.
The request must be made on an adjustment application. The application must be
signed by the owner(s) and the insured. If your request is not approved, no
changes are made to your Policy.
We will approve your request if:
. the insured is alive at the time of your request; and
. the attained age of the insured is 85 or less at the time of the request; and
. we receive evidence satisfactory to us that the insured is insurable under our
underwriting guidelines in place at the time of your request.
The increase in policy face amount is in a risk classification determined by us.
The adjustment is effective on the monthly date on or next following our
approval of your request. No free-look period applies to an increase in policy
face amount.
We calculate an "adjustment conditional receipt premium deposit" (payment that
accompanies request) based on your request for an increase. If you make a
payment with your adjustment application of at least as much as the adjustment
conditional receipt premium deposit, we issue a conditional receipt. The
conditional receipt shows receipt of the payment and outlines any interim
insurance coverage.
Any payment made with the adjustment application is held in our General Account
without interest. If we approve the adjustment, on the effective date of the
adjustment, the amount of the premium payment being held minus the premium
expense charge, is moved to the divisions and/or Fixed Account. Your current
premium allocation percentages are used to make this allocation.
The cost of insurance charge will increase in the event of an increase in a
policy's face amount. If there is insufficient value to pay the higher charges
after an increase in face amount, the policy will lapse, unless the no-lapse or
death benefit guarantees are in effect. The entire policy would be at risk of
lapsing, not just the incremental increase in face amount.
Decrease in policy face amount
------------------------------
After the first policy year, you may request a decrease in the policy face
amount. No transaction fee is imposed on decreases in the policy face amount. A
decrease in face amount lowers the cost of insurance charges. A decrease is
requested as follows:
. the request must be made on an adjustment application;
. the application must be signed by the owner(s);
. the policy is not in a grace period;
. monthly policy charges are not being waived under a waiver rider;
. the minimum amount of the decrease is $25,000; and
. the decrease may not reduce the policy face amount below $100,000.
CHARGES AND DEDUCTIONS
We make certain charges and deductions to support operation of the Policy and
the Separate Account. Some charges are deducted from premium payments when they
are received. Other charges are deducted on a monthly basis while others are
deducted at the time a Policy is surrendered or terminated.
PREMIUM EXPENSE CHARGE
When we receive your premium payment, we deduct a premium expense charge.
Deductions from premiums during each of the first five years and with respect to
premiums made because of a policy face amount increase, during the first five
years after the increase, equal:
. sales load of 3.00% of premiums paid
. plus 2.20% for state and local taxes
. plus 1.25% for federal taxes.
Deductions from premiums after the fifth policy year (and after five years of a
policy face amount increase) equal:
. 2.20% for state and local taxes
. plus 1.25% for federal taxes.
The sales load is intended to pay us for distribution expenses. These expenses
include commissions paid to registered representatives, printing of prospectuses
and sales literature, and advertising. Sales loads charged in any policy year
are not necessarily related to actual distribution expenses incurred in that
year. We expect that the majority of these expenses are incurred in the early
years of a Policy and that any deficit is made up during the life of the Policy.
If distribution expenses are more than the sales load (including the sales load
portion of the surrender charge), the deficit is made up from our other assets
or surplus in our General Account.
MONTHLY POLICY CHARGE
The monthly policy charge is intended to cover certain charges and expenses
incurred in connection with the Policy. Deductions are made up of:
. a charge for the cost of insurance;
. a charge for any optional benefit added by rider(s);
. a monthly administration charge; and
. an asset based charge (applies to the divisions, the Fixed Account, and the
Loan Account).
On the policy date and each monthly date thereafter, we deduct the charge from
your policy value in the divisions and/ or Fixed Account (but not your Loan
Account). The deduction is made using your current monthly policy charge
allocation percentages. Your allocation percentages may be:
. the same as allocation percentages for premium payments;
. determined on a prorated basis; or
. determined by any other allocation method which we agree upon.
For each division and/or the Fixed Account, the allocation percentage must be
zero or a whole number. The total of the allocation percentages must equal 100.
Allocation percentages may be changed without charge. A request for an
allocation change is effective on the date we receive the request. If we cannot
follow your instructions because of insufficient value in any Fixed Account
and/or the division, the monthly policy charge is deducted on a prorated basis.
COST OF INSURANCE CHARGE
Your monthly cost of insurance charge is (a) multiplied by (b) minus (c) where:
. (a) is the cost of insurance rate described below divided by 1,000;
. (b) is the death benefit at the beginning of the policy month, divided by
1.0024663 (the sum of one plus the monthly guaranteed fixed account interest
rate); and
. (c) is the policy value at the beginning of the policy month calculated as if
the monthly policy charge was zero.
The cost of insurance rate is based on the gender*, issue age, duration since
issue, smoking status, and risk classification of the insured. We determine the
rate based on our expectation as to investment earnings, expenses, mortality and
persistency experience. Changes in the cost of insurance rates apply to all
individuals of the same age, gender* and risk classification. The rate for the
policy face amount will never exceed the rate shown in the Table of Guaranteed
Maximum Cost of Insurance Rates in the Policy. The guaranteed maximum cost of
insurance rate is based on the gender*, attained age and risk classification of
the insured.
Different cost of insurance rates may apply to policy face amount increases and
to supplemental benefit riders. The cost of insurance for the increase is based
on the insured's gender*, issue age, duration since issue, smoking status, and
risk classification at the time of the increase. The guaranteed maximum cost of
insurance rate for the increase is based on the insured's gender*, attained age
and risk classification at the time of the increase.
* The cost of insurance rate for Policies issued in states which require
unisex pricing or in connection with employment related insurance and
benefit plans is not based on the gender of the insured.
ADMINISTRATION CHARGE
Current charges
---------------
. The current monthly administrative charge is $25.00 per month during the first
policy year.
. After the first policy year, the administrative charge is $10.00 per month.
Guaranteed administration charges
---------------------------------
In all policy years, the guaranteed maximum monthly administration charge is
$25.00 per month.
The monthly administration charge reimburses us for the administrative expenses
of the Policy and the Separate Account. Administration expenses do not include
the cost of selling the Policy. They do include the costs of: processing
applications; conducting medical examinations; determining insurability;
establishing and maintaining records; processing death benefit claims and policy
changes, reporting and overhead. We do not expect to collect more from the
administration charges than our actual accumulated expenses.
For Policies sold in New York, both the current and guaranteed administration
charges are $8.00 per month.
ASSET BASED CHARGE
The expense risk we assume is that expenses incurred in issuing and
administering the policy are greater than we estimated. The Company expects to
make a profit from this charge to the extent it is not needed to provide
benefits and pay expenses under the Policies.
Each month during the first ten policy years, we deduct a charge for these risks
at an annual rate of 0.70% of the value(s) of your division(s) and of the Fixed
Account. Each month thereafter, we deduct a charge at an annual rate of 0.20% of
the value(s) of your division(s) and of the Fixed Account.
We reserve the right to increase the annual rate but guarantee that the maximum
annual rate will not exceed 0.70%. If we increase the annual rate, the increase
will only apply to policies issued on or after the date of the increase.
SURRENDER CHARGE
Surrender charges vary based on the target premium of the policy and the
premiums paid. The charge applies only during the first ten policy years unless
there is a policy face amount increase. A policy face amount increase has its
own surrender charge period that begins on the adjustment date. The total
surrender charge on the policy is the sum of the surrender charges for the
policy face amount at issue and each policy face amount increase. The surrender
charge is not affected by any decrease in policy face amount or any change in
policy face amount resulting from a change of death benefit options.
The surrender charge compensates us for expenses relating to the sale of the
Policy. These include commissions, advertising and printing of prospectuses and
sales literature. The surrender charge also reimburses us for expenses
incurred in issuing the Policy. These expenses include processing the
application (primarily underwriting) and setting up records. This charge is
intended to cover the average anticipated issue expenses for all Policies. There
may not be a direct relationship between the amount of the charge for any given
Policy and the amount of expenses attributable to that Policy.
The surrender charge on an early surrender or Policy lapse is significant. As a
result, you should purchase a Policy only if you have the financial capacity to
keep it in force for a substantial period of time.
Surrender charge percentage
---------------------------
The surrender charge is (a) multiplied by (b) multiplied by (c) where:
. (a) is the target premium shown in Appendix ____;
. (b) is the percentage shown below which varies by issue age (or age at the
time of a face amount increase) and state in which the Policy was issued:
OTHER THAN
ISSUE AGE NEW YORK NEW YORK
--------- -------- --------
0-60 100% 100%
61-65 94 100
66-70 89 100
71-75 84 100
76-80 65 85
81-85 53 70
. (c) is the applicable surrender charge percentage shown below:
SURRENDER CHARGE PERCENTAGE TABLE
---------------------------------
NUMBER OF YEARS SINCE POLICY THE FOLLOWING PERCENTAGE OF
DATE AND/OR THE ADJUSTMENT DATE SURRENDER CHARGE IS PAYABLE
------------------------------- ---------------------------
1 through 5 100.00%
6 95.24
7 85.71
8 71.43
9 52.38
10 28.57
11 and later 00.00
OTHER CHARGES
The assets of each division are used to purchase shares in a corresponding
mutual fund at net asset value. The net asset value of the mutual fund reflects
management fees and operating expenses already deducted from the assets of the
mutual fund. Current management fees and operating expenses for each mutual fund
are shown in the section entitled THE FUNDS.
SPECIAL PROVISIONS FOR GROUP OR SPONSORED ARRANGEMENTS
Where permitted by state law, Policies may be purchased under group or sponsored
arrangements as well as on an individual basis. A group arrangement is a program
under which a trustee, employer or similar entity purchases Policies covering a
group of individuals on a group basis. A sponsored arrangement is a program
under which an employer permits group solicitation of its employees or an
association permits group solicitation of its members for the purchase of
Policies on an individual basis.
Charges and deductions may be reduced for Policies purchased under a group or
sponsored arrangement including waiver of premium sales load and waiver of
surrender charge. Reductions may be available to:
. employees, officers, directors, agents and immediate family members of the
group or sponsored arrangement, and
. employees of agents of the Company and its subsidiaries.
Reductions are made under our rules in effect on the date a Policy application
is approved and are based on certain criteria (size of group, expected number of
participants, anticipated premium payments).
Generally, the sales contacts and effort, administrative costs and mortality
cost per Policy vary based on the size of the arrangement, the purpose for which
the Policies are purchased and certain characteristics of the members. The
amount of the reduction and the criteria for reducing the charges and deductions
reflect: a) our reduced sales effort and administrative costs; and b) the
different mortality experience expected from sales to arrangements.
We may modify, on a uniform basis, both the amounts of reductions and the
criteria for qualification. Reductions in these charges will not discriminate
unfairly against any person, including the affected owners and all other Policy
owners with policies funded with the Separate Account.
In addition, groups and persons buying Policies under a sponsored arrangement
may apply for flexible underwriting. If flexible underwriting is granted, the
cost of insurance charge may increase because of higher anticipated mortality
experience. Flexible underwriting programs currently available include: batch
underwriting, expanded nonmedical underwriting and guaranteed issue
underwriting.
THE FIXED ACCOUNT
You may allocate net premiums and transfers from your division(s) to the Fixed
Account. The Fixed Account is part of our General Account. Because of exemptions
and exclusions contained in the Securities Act of 1933 and the Investment
Company Act of 1940, the Fixed Account has not been registered under these acts.
Neither the Fixed Account nor any interest in it is subject to the provisions of
these acts. As a result the SEC has not reviewed the disclosures in this
prospectus relating to the Fixed Account. However, disclosures relating to the
Fixed Account are subject to generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
prospectuses. You may obtain more information regarding the Fixed Account from
our home office or from a sales representative.
Our obligations with respect to the Fixed Account are supported by our General
Account. Subject to applicable law, we have sole discretion over the investment
of assets in the General Account.
We guarantee that net premiums allocated to the Fixed Account accrue interest
daily at an effective annual rate of 3% compounded annually. We may, in our sole
discretion, credit interest at a higher rate.
The value of your Fixed Account on any valuation day is:
. net premiums allocated to the Fixed Account
. plus transfers from the division(s)
. plus interest credited to the Fixed Account
. minus surrenders, surrender charges and monthly policy charges
. minus transfers to the Loan Account
. minus transfers to the division(s).
We may defer payment of proceeds payable out of the Fixed Account for a period
of up to six months.
POLICY TERMINATION AND REINSTATEMENT
POLICY TERMINATION
No Lapse Guarantee
------------------
If the net surrender value on any monthly date is less than the monthly policy
charge, a 61-day grace period begins. However, during the first 60 policy
months, the Policy will stay in force if (a minus b) is greater than or equal to
(c) where:
. (a) is the sum of the premiums paid;
. (b) is the sum of all existing policy loans, unpaid loan interest, partial
surrenders and transactions charges; and
. (c) is the sum of the no lapse guarantee premiums since the policy date to the
most recent monthly date.
After the first 60 policy months, making premium payments under your planned
periodic premium schedule does not guarantee that your Policy will stay in force
unless:
. your Policy's net surrender value is at least equal to the monthly policy
charge on the current monthly date; or
. the death benefit guarantee rider is in effect.
Grace Period
------------
The grace period begins when we send you a notice of pending lapse. The notice:
. is mailed to your last known post office address;
. shows the minimum payment required to keep the Policy in force; and
. shows the 61-day period during which we will accept the required payment.
During the first 60 policy months, the minimum required payment is the greater
of (a) or (b) where:
. (a) is three monthly policy charges divided by (1 minus the maximum premium
expense charge), and
. (b) is three no lapse guarantee monthly premiums.
The determination of three monthly policy charges is made by taking three times
the "failed" monthly deduction that could not be made due to insufficient policy
value. The maximum premium expense charge is the guaranteed maximum percent of
premium expense charge which is 6.45% in all policy years (3% sales charge, 2.2%
state and local taxes, 1.25% federal taxes).
After the first 60 policy months, the minimum required premium is (a) plus (b)
where:
. (a) is the amount by which the surrender charge is more than the Policy value
on the monthly date on or immediately preceding the start of the grace period,
and
. (b) is three monthly policy charges divided by (1 minus the maximum premium
expense charge).
This payment is intended to a) reimburse us for the monthly policy charges
during the grace period, and b) provide enough policy value to pay the monthly
policy charge on the first monthly date after the grace period. To cover past
due policy charges, if the grace period ends before we receive the minimum
payment, we keep any remaining value in the Policy.
Due to possible adverse market fluctuations, there is no guarantee that the
amount requested at the beginning of the grace period is enough to pay the
monthly policy charges as they are processed. If the net surrender value is not
at least as much as the monthly policy charge on any monthly date, a new 61-day
grace period starts.
The Policy is in force during a grace period. If we do not receive the required
payment, the Policy terminates as of the monthly date on or immediately
preceding the start of the grace period. If the insured dies during a grace
period, policy proceeds are reduced by:
. all monthly policy charges due and unpaid at the death of the insured; and
. any policy loans and unpaid loan interest.
The Policy also terminates when:
. you make a total policy surrender;
. death proceeds are paid; and
. maturity proceeds are paid.
When the Policy terminates, all of the owners' policy rights and privileges end.
REINSTATEMENT
Subject to certain conditions, you may reinstate a Policy that terminated
because of insufficient value. The Policy may only be reinstated:
. prior to the maturity date and while the insured is alive;
. upon our receipt of satisfactory evidence of insurability (according to our
underwriting guidelines then in effect);
. if you make a payment of a reinstatement premium; and
. if the application for reinstatement is mailed to us within three years of the
Policy termination (in some states, we must provide a longer period of time
for Policy reinstatement).
The reinstatement premium is calculated using the formulas found above in POLICY
TERMINATION AND REINSTATEMENT - Policy Termination - Grace Period. If a policy
loan or loan interest was unpaid when the Policy terminated, the policy loan
must be reinstated or repaid (loan interest is not collected for the period the
Policy was terminated).
We do not require payment of monthly policy charges during the period the Policy
was terminated. Reinstatement is effective on the next monthly date following
our approval of the reinstatement application. Premiums received with your
reinstatement application are held without interest until the reinstatement
date. They are allocated to your selected division(s) and/or Fixed Account on
the reinstatement date. We will use the premium allocation percentages in effect
at the time of termination of the Policy unless you provide new allocation
instructions. The reinstated Policy has the same policy date as the original
Policy. Your rights and privileges as owner(s) are restored upon reinstatement.
If you reinstate your Policy and then it is totally surrendered, a surrender
charge may be imposed. The charge, if any, is calculated based on the number of
years the Policy was in force. The period of time during which the Policy was
terminated is not credited toward the number of policy years to make this
calculation.
OTHER MATTERS
VOTING RIGHTS
We vote division shares at shareholder meetings of the underlying mutual funds.
We follow the voting instructions received from people having the voting
interest in the division shares.
You have a voting interest under a Policy. You have one vote for each $100 of
policy value in the division(s). Fractional votes are allocated for amounts less
than $100. The number of votes on which you have the right to instruct us is
determined as of a date established by the mutual fund for setting the
shareholders eligible to vote.
According to procedures adopted by the mutual fund, voting instructions are
solicited by a written proxy statement before a shareholder meeting. We vote
other underlying mutual fund shares, for which no voting instructions are
received, in the same proportion as the shares for which we receive voting
instructions. Underlying mutual fund shares held in our General Account are
voted in proportion to instructions that are received with respect to the
participating contracts.
If we determine, under applicable law, that underlying mutual fund shares need
not be voted according to the instructions received, we may vote underlying
mutual fund shares held in the Separate Account in our own right.
We may, when required by state insurance regulatory authorities, disregard
voting instructions. This may be done if the instructions would require shares
to be voted to:
. change a subclassification or investment objective of the underlying mutual
fund;
. disapprove an investment advisory contract of the underlying mutual fund; or
. approve changes initiated by an owner in the investment policy or investment
advisor of the underlying mutual fund if we reasonably disapprove of the
changes.
The change would be disapproved only if:
. the proposed change is contrary to state law;
. prohibited by state regulatory authorities; or
. we determine the change is inconsistent with the investment objectives of the
mutual fund.
If we disregard voting instructions, a summary of the action and the reason for
the actions will be included in the next semiannual report from the underlying
mutual fund to owners.
STATEMENT OF VALUES
You receive an annual statement at the end of each policy year. The statement
will show:
. current death benefit;
. current policy value and surrender value;
. all premiums paid since the last statement;
. all charges since the last statement;
. any policy loans and unpaid loan interest;
. any partial surrenders since the last statement;
. the number of units and unit value;
. total value of each of your divisions and the Fixed Account;
. designated beneficiary(ies); and
. all riders included in the Policy.
You will also receive a statement as of the end of each calendar quarter. At any
time, you may request a current statement by telephoning 1-800-247-9988.
We also send you the reports required by the Investment Company Act of 1940 (as
amended).
SERVICES AVAILABLE VIA THE INTERNET AND TELEPHONE
If you elect internet and/or telephone privileges, instructions for the
following transactions may be given to us via the internet or telephone:
. change in allocations of future premium payments;
. change in allocation of the monthly policy charge;
. change to your APR instructions;
. change to your DCA instructions;
. unscheduled division and/or Fixed Account transfers; and
. policy loan (not available via the internet) (loan proceeds are mailed to the
owner's address of record).
Your instructions:
. telephone instructions may be given by calling us at 1-800-247-9988 between 7
a.m. and 9 p.m. Central Time on any day that the NYSE is open;
. internet instructions may be given by accessing us at www.principal.com (for
security purposes, you need a personal identification number (PIN) to use any
of the new Internet services, including viewing your policy information
on-line. If you don't have a PIN, you can obtain one at www.principal.com);
. must be received by us before the close of the NYSE (generally 3:00 p.m.
Central Time) to be effective the day you call;
. are effective the next valuation day if not received until after the close of
the NYSE; and
. from one joint owner are binding on all joint owners.
Direct Dial
-----------
You may receive information about your Policy from our Direct Dial system
between 7 a.m. and 9 p.m. Central Time, Monday through Saturday. The Direct Dial
number is 1-800-247-9988. Through this automated system, you can:
. obtain information about unit values and policy values;
. initiate certain changes to your Policy; and
. change your personal identification number.
Instructions from one joint owner are binding on all joint owners.
Although neither the Separate Account nor the Company is responsible for the
authenticity of telephone transaction or internet requests, the Separate Account
and the Company reserve the right to refuse telephone and/or internet orders.
You are liable for a loss resulting from a fraudulent telephone or internet
order that we reasonably believe is genuine. We use reasonable procedures to
assure instructions are genuine. If the procedures are not followed, we may be
liable for loss due to unauthorized or fraudulent transactions. The procedures
for telephone instructions include: recording all telephone instructions,
requesting personal identification information (name, phone number, social
security number, birth date, etc.) and sending written confirmation to the
owner's address of record. The procedures for internet and
Direct Dial include requesting the same personal identification information as
well as your PIN, logging all internet and Direct Dial activity and sending
written transaction confirmations to the owner's address of record.
GENERAL PROVISIONS
THE CONTRACT
The entire contract is made up of applications, amendments, riders and
endorsements attached to the Policy, current data pages, copies of any
supplemental applications, amendments, endorsements and revised Policy or data
pages which are mailed to you. No statement, unless made in an application, is
used to void a Policy (or void an adjustment in the case of an adjustment
application). Only our corporate officers can agree to change or waive any
provisions of a Policy. Any change or waiver must be in writing and signed by an
officer of the Company.
OPTIONAL INSURANCE BENEFITS
Subject to certain conditions, you may add one or more optional insurance
benefits to your Policy. These include:
. supplemental benefit rider (yearly renewable term)
. extended coverage rider
. death benefit guarantee rider (only available at the time the Policy is issued
and is not available in conjunction with the supplemental benefit rider)
Detailed information concerning optional insurance benefits may be obtained from
an authorized agent or our home office. NOT ALL OPTIONAL INSURANCE BENEFITS ARE
AVAILABLE IN ALL STATES. The cost, if any, of an optional insurance benefit is
deducted as part of your monthly policy charge.
Supplemental Benefit Rider
--------------------------
This rider provides an additional face amount and an additional death benefit.
Death Benefit Guarantee Rider
-----------------------------
This rider provides that if the rider premium is paid, the Policy does not lapse
even if the net surrender value is not enough to pay the monthly policy charges
on a monthly date. This rider is automatically made a part of the Policy if the
planned periodic premium is equal to or greater than the death benefit guarantee
premium or if the first year paid premium is large enough to satisfy the death
benefit guarantee premium requirement for one year.
There are no policy charges for the death benefit guarantee rider. Rather, a
required minimum premium level is defined for the rider to remain in effect. The
death benefit guarantee premium requirement is met if:
. the sum of all premiums paid
. minus any partial surrenders
. minus any policy loans and unpaid loan interest
is at least as much as the sum of death benefit guarantee monthly premiums from
the policy date to the most recent monthly date. Your most recent death benefit
guarantee premium is shown on your current data page.
The death benefit guarantee premium is based on the issue age, gender (where
permitted by law) and risk classification of the insured. The monthly death
benefit guarantee premium is considered to be zero for any month that deductions
are being waived. This premium may change if:
. the policy face amount is changed;
. the death benefit option is changed;
. a rider is added or deleted; or
. an adjustment is made to your Policy.
As a result of a change, an additional premium may be required to satisfy the
new death benefit guarantee premium.
If on any monthly date, the death benefit guarantee premium requirement is not
met, we send you a notice stating the premium required to reinstate the rider.
If the premium required to maintain the guarantee is not received in our home
office before the expiration of the 61-day grace period (which begins when the
notice is mailed), the death benefit guarantee is no longer in effect and the
rider is terminated. If the rider terminates, it may not be reinstated.
Extended Coverage Rider
-----------------------
This rider, which is automatically included on each Policy, allows the Policy to
remain in force beyond the maturity date as long as there is cash value in the
Policy. Upon your request, we keep the Policy in force until the death of the
Insured or full surrender. The death benefit will be equal to the amount
described in the "Death Benefit Option" section. There is no charge for this
rider and at maturity the Policy automatically changes to death benefit option 1
and no future death benefit option changes are allowed.
MISSTATEMENT OF AGE OR GENDER
If the age or, where applicable, gender of the insured has been misstated, we
adjust the death benefit payable under your Policy to reflect the amount that
would have been payable at the correct age and gender.
ASSIGNMENT
You may assign your Policy. Each assignment is subject to any payments made or
action taken by the Company prior to our notification of the assignment. We
assume no responsibility for the validity of any assignment.
An assignment must be made in writing and filed with us at our home office. The
irrevocable beneficiary(ies), if any, must authorize any assignment in writing.
Your rights, as well as those of the beneficiary(ies), are subject to any
assignment on file with us.
OWNERSHIP
You may change your ownership designation at any time. Your request must be in
writing and approved by us. After approval, the change is effective as of the
date you signed the request for change. We reserve the right to require that you
send us the Policy so that we can record the change.
Unless changed, the owner(s) is as named in the application. The owner(s) may
exercise every right and privilege of the Policy, subject to the rights of any
irrevocable beneficiary(ies) and any assignee(s).
All rights and privileges of ownership of a Policy end if the Policy is
surrendered, death or maturity proceeds are paid, or if the grace period ends
without our receiving the payment required to keep the Policy in force. The
rights and privileges end as of the monthly date on or immediately preceding the
start of the grace period.
If an owner dies before the Policy terminates, the surviving owner(s), if any,
succeeds to that person's ownership interest, unless otherwise specified. If all
owners die before the Policy terminates, the Policy passes to the estate of the
last surviving owner. With our consent, you may specify a different arrangement
for contingent ownership.
BENEFICIARY
You have the right to name a beneficiary(ies) and contingent beneficiary(ies).
This may be done as part of the application process or by sending us a written
request. Unless you have named an irrevocable beneficiary, you may change your
beneficiary designation by sending us a written request. After approval, the
change is effective as of the date you signed the request for change. We reserve
the right to require that you send us the Policy so that we can record the
change.
If no beneficiary(ies) survives the death of the insured, the death proceeds are
paid to the owner(s) or the estate of the owner(s) in equal percentages unless
otherwise specified.
BENEFIT INSTRUCTIONS
While the insured is alive, you may give us instructions for payment of death
proceeds under one of the benefit options of the Policy. The instructions or
changes to the instructions must be in writing. If you change the
beneficiary(ies), prior benefit instructions are revoked.
BENEFIT PAYMENT OPTIONS
While the insured is alive, you may arrange for death proceeds to be paid in a
lump sum or under one of several fixed benefit payment options. These choices
are also available if the Policy is surrendered or matures.
. Special Benefit Arrangement
A specially designed benefit option may be arranged with our approval.
. Proceeds left at interest
We hold the amount of the benefit on deposit. Interest payments are
made annually, semiannually, quarterly or monthly as selected.
. Fixed Income
We pay income of a fixed amount for a fixed period (not exceeding 30
years).
. Life Income
We pay income during a person's lifetime. A minimum guaranteed period
may be used.
. Joint and Survivor Life Income
We pay income during the lifetime of two people and continue until
the death of the survivor. This option includes a minimum guaranteed
period of 10 years.
. Joint and Two-thirds Survivor Life Income
We pay an income during the lifetime of two people and two-thirds of
the original amount during the remaining lifetime of the survivor.
Interest at a rate set by us, but never less than required by state law, will be
applied to calculate the above benefit payment options.
RIGHT TO EXCHANGE POLICY
During the first 24 months after the effective date (except during a grace
period), you have the right to make an irrevocable, onetime election to transfer
all of your division values to the Fixed Account. No charge is imposed on this
transfer.
Your request must be in writing and be signed by the owner(s). The request must
be postmarked or delivered to our home office before the end of the 24-month
period. The transfer is effective when we receive your written request.
NON-PARTICIPATING POLICY
The Policies do not share in any divisible surplus of the Company.
INCONTESTABILITY
We will not contest the insurance coverage provided by the Policy, except for
any increases in face amount, after the Policy has been in force during the
lifetime of the insured for a period of two years from the policy date. Any
policy face amount increase has its own two-year contestability period that
begins on the effective date of the adjustment. In many states, the time limit
in the incontestability period does not apply to fraudulent misrepresentations.
SUICIDE
Death proceeds are not paid if the insured dies by suicide, while sane or
insane, within two years of the policy date (or two years from the date of
policy face amount increase with respect to such increase). In the event of the
suicide of the insured within two years of the policy date, our only liability
is a refund of premiums paid, without interest, minus any policy loans and
unpaid loan interest and partial surrenders. In the event of suicide within two
years of a policy face amount increase, our only liability with respect to that
increase is a refund of the cost of insurance for the increase. This amount will
be paid to the beneficiary(ies).
DELAY OF PAYMENTS
Payment due to exercise of your rights under the free-look provision,
surrenders, policy loans, death or maturity proceeds, and transfers to or from a
division are generally made within five days after we receive your instructions
in a form acceptable to us. This period may be shorter where required by law.
However, payment of any amount upon return of the Policy, total or partial
surrender, policy loan, death, maturity or the transfer to or from a division
may be deferred during any period when the right to sell mutual fund shares is
suspended as permitted under provisions of the Investment Company Act of 1940.
The right to sell shares may be suspended during any period when:
. 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 fund of securities owned by it is not reasonably practicable;
. it is not reasonably practicable for a fund to fairly determine the value of
its net assets; or
. the SEC permits suspension for the protection of security holders.
If payments are delayed and your instruction is not canceled by your written
instruction, the amount of the transaction is determined the first valuation
date following the expiration of the permitted delay. The transaction is made
within five days thereafter.
In addition, payments on surrenders attributable to a premium payment made by
check may be delayed up to 15 days. This permits payment to be collected on the
check.
MARKET TIMING DISCLOSURE
The Policy does not permit excessive trading or market timing. Market timing
activity can disrupt management strategy of the underlying mutual funds and
increase expenses, which are borne by all Policy owners. We reserve the right to
reject excessive exchanges or purchases by market timers if the trade would
disrupt the management of the Separate Account, any division or any underlying
mutual fund. In addition, we may suspend or modify transfer privileges at any
time to prevent market timing efforts that could disadvantage other Policy
owners. These modifications could include, but not be limited to:
. requiring a minimum time period between each transfer;
. not accepting transfer requests from someone providing them for multiple
Policies for which he or she is not the owner; or
. limiting the dollar amount that a Policy owner may transfer at any one time.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
We reserve the right to make certain changes if, in our judgement, they best
serve your interests or are appropriate in carrying out the purpose of the
Policy. Any changes are made only to the extent and in the manner permitted by
applicable laws. Also, when required by law, we will obtain your approval of the
changes and approval from any appropriate regulatory authority. Approvals may
not be required in all cases. Examples of the changes we may make include:
. transfer assets in any division to another division or to the Fixed Account;
. 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 judgement, investment in a division becomes inappropriate
considering the purposes of the division.
If we eliminate or combine existing divisions or transfer assets from one
division to another, you may change allocation percentages and transfer any
value in an affected division to another division(s) and/or the Fixed Account
without charge. You may exercise this exchange privilege until the later of 60
days after a) the effective date of the change, or b) the date you receive
notice of the options available. You may only exercise this right if you have an
interest in the affected division(s).
OFFICERS AND DIRECTORS OF PRINCIPAL MANAGEMENT CORPORATION
The officers and directors of the investment advisor, Principal Management
Corporation, are shown below. This list includes some of the same people
(designated by *), who are serving in the same capacities as officers and
directors of the underwriter, Princor Financial Services Corporation. The
principal business address for each officer and director is: Principal Financial
Group, Des Moines, Iowa 50392.
*JOHN EDWARD ASCHENBRENNER Director
*PATRICIA ANN BARRY Assistant Corporate Secretary
*CRAIG LAWRENCE BASSETT Treasurer
*MICHAEL THOMAS DALEY Director
*RALPH CRAIG EUCHER Director and President
*ARTHUR SIGLIN FILEAN Senior Vice President
*DENNIS PAUL FRANCIS Director
*PAUL NORMAN GERMAIN Vice President - Mutual Fund Operations
*ERNEST HAROLD GILLUM Vice President - Product Development
*JOHN BARRY GRISWELL Chairman of the Board and Director
*JOYCE NIXSON HOFFMAN Senior Vice President and Corporate Secretary
Senior Vice President - Marketing and
*JOHN RANDALL LEPLEY Distribution
Assistant Vice President - Business Systems and
*KELLY ANN PAUL Technology
*RICHARD LEO PREY Director
LAYNE ALLAN RASMUSSEN Controller - Mutual Funds
*MICHAEL DENNIS ROUGHTON Counsel
*JAMES FRANKLIN SAGER Vice President
*JEAN BETSY SCHUSTEK Assistant Vice President - Registered Products
*KAREN ELIZABETH SHAFF Director
Senior Vice President and Chief Financial
*KIRK LLOYD TIBBETTS Officer
*LARRY DONALD ZIMPLEMAN Director
EXECUTIVE OFFICERS OF PRINCIPAL LIFE INSURANCE COMPANY (OTHER THAN DIRECTORS):
JOHN EDWARD ASCHENBRENNER Executive Vice President
PAUL FRANCIS BOGNANNO Senior Vice President
GARY MERLYN CAIN Senior Vice President
MICHAEL THOMAS DALEY Executive Vice President
CHARLES ROBERT DUNCAN Senior Vice President
DENNIS PAUL FRANCIS Senior Vice President
Executive Vice President and Chief Financial
MICHAEL HARRY GERSIE Officer
THOMAS JOHN GRAF Senior Vice President
ROBB BRYAN HILL Senior Vice President
JOYCE NIXSON HOFFMAN Senior Vice President and Corporate Secretary
DANIEL JOSEPH HOUSTON Senior Vice President
ELLEN ZISLIN LAMALE Senior Vice President and Chief Actuary
MARY AGNES O'KEEFE Senior Vice President
RICHARD LEO PREY Executive Vice President
KAREN ELIZABETH SHAFF Senior Vice President and General Counsel
ROBERT ALLEN SLEPICKA Senior Vice President
NORMAN RAUL SORENSEN Senior Vice President
Senior Vice President and Chief Information
CARL CHANSON WILLIAMS Officer
LARRY DONALD ZIMPLEMAN Executive Vice President
DIRECTORS OF PRINCIPAL LIFE INSURANCE COMPANY
Principal Life Insurance Company is managed by a Board of Directors. The
directors of the Company, their positions with the Company, including Board
Committee memberships, and their principal occupation during the last five
years, are as follows:
NAME, POSITIONS AND PRINCIPAL OCCUPATION DURING LAST 5 YEARS
------OFFICES------ ----------------------------------------
-------
President and Chief Executive Officer of AT&T
Consumer since April 2001. Prior thereto,
BETSY JANE BERNARD Executive Vice President - National Mass markets
Director of Quest Communications, formerly US West,
Chair, Nominating 2000-2001; Executive Vice President - Retail
Committee Markets of US West, 1998-2000; President and
Chief Executive Officer of US WEST Long Distance,
1997-1998; President and Chief Operating Officer
of Avirnex July 1997 - December 1997; President
and Chief Executive Officer of Pacific Bell
Communications, Pacific Telesis from 1995-1997
Corporate Vice President and Chief Marketing
Officer, Motorola, Inc. since 1999. Vice
JOCELYN CARTER-MILLER President, 1998-1999; Vice President and General
Director Manager, since 1997. Prior thereto, Vice
Member, Audit Committee President of Latin American and Caribbean
Operations of Motorola.
DAVID JAMES DRURY
Director, Chairman of Chairman, Principal Life Insurance Company since
the Board 2000. Chairman and Chief Executive Officer
Chair, Executive 1995-2000.
Committee
CHARLES DANIEL GELATT,
JR.
Director
Member, Executive President, NMT Corporation since 1986
Committee
Member, Human Resources
Committee
JOHN BARRY GRISWELL President and Chief Executive Officer, Principal
Director Life Insurance Company since 2000. President
Member, Executive 1998-2000; Executive Vice president 1996-1998;
Committee Senior Vice President 1991-1996.
Executive Vice President and Chief Financial
SANDRA LYNN HELTON Officer of Telephone & Data Systems, Inc. since
Director 1998. Vice President and corporate Controller of
Member, Audit Committee Compaq Computer Corporation from 1997-1998. Prior
thereto, Senior Vice President and Treasurer of
Corning Incorporated from 1994-1997.
Retired. Executive Vice President of DuPont
1999-2000. Chairman, President and Chief
CHARLES SAMUEL JOHNSON Executive Officer, Pioneer Hi-Bred International,
Director Inc. 1996-1999; President and Chief Executive
Member, Audit Committee Officer 1995-1996; President and Chief Operating
Officer 1995.
WILLIAM TURNBALL KERR
Director Chairman, President & Chief Executive Officer,
Member, Executive Meredith Corporation since 1998. President and
Committee Chief Executive Officer, 1997-1998; President and
Chair, Human Resources Chief Operating Officer 1994-1997. Prior thereto,
Committee Executive Vice President.
LEE LIU
Director Retired. Chairman Alliant Energy Corporation
Member, Executive 1998-2000. Chairman and Chief Executive Officer,
Committee IES Industries, Inc., 1996-1998. Prior thereto,
Member, Human Resources Chairman, President and Chief Executive Officer.
Committee
VICTOR HENDRIK
LOEWENSTEIN Partner Egon Zehnder International since 1999.
Director Prior thereto, Managing Partner, Egon Zehnder
Member, Nominating International 1979-1999.
Committee
RONALD DALE PEARSON
Director Chief Executive Officer, Chairman and President,
Member, Human Resources Hy-Vee, Inc. since 1989.
Committee
FEDERICO FABIAN PENA Managing Director of Vestar Capital Partners
Director since 2000. Senior Advisor of Vestar Capital
Member, Nominating Partners 1998-2000. Prior thereto, Secretary,
Committee U.S. Department of Energy 1996-1998.
President and Chief Executive Officer of the
Chicago Community Trust since 2000. Senior
DONALD MITCHELL STEWART Program Officer and Special Advisor to the
Director President at the Carnegie Corporation of New York
Member, Nominating 1999-2000. Prior thereto, President, The College
Committee Board, 1986-1999.
President and Chief Executive Officer of Galenor
ELIZABETH EDITH TALLETT Inc. since 1999 and also President & Chief
Director Executive Officer of Dioscor, Inc. since 1996.
Chair, Audit Committee
DISTRIBUTION OF THE POLICY
We intend to sell the Policies in all jurisdictions where we are licensed. The
Policies will be sold by licensed insurance agents who are also registered
representatives of broker-dealers registered with the SEC under the Securities
Exchange Act of 1934 who are members of the National Association of Securities
Dealers, Inc. (NASD).
The Policies will be distributed by the general distributor, Princor Financial
Services Corporation (Princor), which is an affiliate of ours, pursuant to a
contract dated ______________________. The distribution contract may be
terminated by either party upon 60 day notice. Princor was incorporated in the
State of Iowa on May 1, 1968, and is also a securities broker-dealer registered
with the SEC as well as a member of the NASD. The Policies may also be sold
through other broker-dealers authorized by Princor and applicable law to do so.
Registered representatives of such broker-dealers may be paid on a different
basis than described below.
For Policies sold through Princor, commissions generally will be no more than
50% of premium received in the first policy year or the first year following an
adjustment up to the planned periodic premium (not to exceed target premium). In
addition, a commission of up to 3% of premium received in the first policy year
(or first year following an adjustment) may be paid. In the second through fifth
years following the policy date (or adjustment date), commissions range from 0%
to 2% of premiums received. A service fee of up to 10% is paid on premiums
received. An asset based fee of 0.25% is paid in policy years 6 through 20 which
is reduced to 0.15% after policy year 20. Expense allowances may be paid to
agents and brokers based on premiums received.
STATE REGULATION
The Company is subject to the laws of the State of Iowa governing insurance
companies and to regulation by the Insurance Department of the State of Iowa. An
annual statement in a prescribed form must be filed by March 1 in each year
covering our operations for the preceding year and our financial condition on
December 31 of the prior year. Our books and assets are subject to examination
by the Commissioner of Insurance of the State of Iowa or her representatives at
all times. A full examination of our operations is conducted periodically by the
National Association of Insurance Commissioners. Iowa law and regulations also
prescribe permissible investments, but this does not involve supervision of the
investment management or policy of the Company.
In addition, we are subject to the insurance laws and regulations of other
states and jurisdictions where we are licensed to operate. Generally, the
insurance departments of these states and jurisdictions apply the laws of the
state of domicile in determining the field of permissible investments.
FEDERAL TAX MATTERS
The following description is a general summary of the tax rules, primarily
related to federal income taxes, which in our opinion are currently in effect.
These rules are based on laws, regulations and interpretations that are subject
to change at any time. This summary is not comprehensive and is not intended as
tax advice. While we reserve the right to change the Policy to assure it
continues to qualify as life insurance for tax purposes, we cannot make any
guarantee regarding the future tax treatment of any Policy. You should consult a
qualified tax adviser about the tax implications of taking action under a
Policy.
TAX STATUS OF THE COMPANY AND THE SEPARATE ACCOUNT
We are taxed as an insurance company under subchapter L of the Code. The
Separate Account is not a separate taxable entity. Its operations are taken into
account by us in determining our tax liability. All Separate Account investment
income and realized net capital gains are reinvested and taken into account in
determining policy values and are automatically applied to increase the book
reserves associated with the Policies.
CHARGES FOR TAXES
We impose a federal tax charge equal to 1.25% of premiums received under the
Policy to compensate us for the federal income tax liability we incur by reason
of receiving those premiums. We believe that this charge is reasonable in
relation to the increased tax burden the Company incurs as a result of Section
848 of the Code. No other charge is currently made to the Separate Account for
federal income taxes of the Company that may be attributable to the Separate
Account. Periodically, we review the appropriateness of charges to the Separate
Account for federal income taxes. In the future, a charge may be made for
federal income taxes incurred by us and attributable to the Separate Account. In
addition, depending on the method of calculating interest on policy values
allocated to the Fixed Account, a charge may be imposed for the Policy's share
of our federal income taxes attributable to the Fixed Account.
Under current law, we may incur state or local taxes (in addition to premium
taxes) in several states. At present, these taxes are not significant. If there
is a material change attributable to state or local taxes, we reserve the right
to charge the Separate Account for the portion of taxes, if any, attributable to
the Separate Account.
DIVERSIFICATION STANDARDS
The Policy should qualify as a life insurance contract as long as the underlying
investments for the Policy satisfy diversification requirements of Section
817(h) of the Code.
IRS DEFINITION OF LIFE INSURANCE
The Policy should qualify as a life insurance contract as long as it satisfies
certain tests under Section 7702 of the Code.
. The Policy qualifies if it satisfies the guideline premium requirement and
falls within a cash value corridor.
. If at any time a premium is paid which would result in total premiums
exceeding the current maximum premium allowed, we only accept that portion of
the premium which would make the total premiums equal the maximum.
MODIFIED ENDOWMENT CONTRACT STATUS
Section 7702A of the Code sets forth a classification of life insurance policies
known as "Modified Endowment Contracts." Policy loans and partial surrenders
from a policy that is classified as a modified endowment contract are taxable as
ordinary income to the owner in an amount equal to the lesser of the amount of
the loan/partial surrender or the excess of policy value over the owner's
investment in the Policy. Additionally, taxable distributions are subject to a
federal income tax penalty of 10% unless the payment is:
. made after the owner attains age 591/2;
. attributable to the taxpayer becoming disabled; or
. part of a series of substantially equal periodic payments (made not less
frequently than annually) made for the life or life expectancy of the
taxpayer.
Modified endowment contract classification may be avoided by limiting the amount
of premiums paid under the Policy. If any premium payment increases the policy's
death benefit by more than it increases the policy value, and in the absence of
your instructions, we will refund the premium payment.
POLICY SURRENDERS AND PARTIAL SURRENDERS
A surrender or lapse of the Policy may have income tax consequences. Upon
surrender, the owner(s) is not taxed on the cash surrender value except for the
amount, if any, that exceeds the gross premiums paid less the untaxed portion of
any prior surrenders. The amount of any policy loan, upon surrender or lapse, is
added to the cash surrender value and treated, for this purpose, as if it had
been received. A loss incurred upon surrender is generally not deductible. The
tax consequences of a surrender may differ if the proceeds are received under
any income payment settlement option.
A total surrender of the Policy will, and a partial surrender may, be included
in your gross income to the extent that the distribution exceeds your investment
in the Policy. Partial surrenders generally are not taxable unless the total of
such surrenders exceeds total premiums paid to the date of partial surrender
less the untaxed portion of any prior partial surrenders. During the first 15
policy years, an amount may be taxable prior to your tax-free recovery of your
investment in the Policy if the partial surrender results in or is necessitated
by a reduction in death benefits. A qualified tax advisor should be consulted
regarding the tax consequences of any partial surrender during the first 15
policy years.
The increase in policy value of the Policy is not included in gross income
unless and until there is a total surrender or partial surrender under the
Policy. A complete surrender of the Policy will, and a partial surrender may, be
included in your gross income to the extent the distribution exceeds your
investment in the Policy. Transfers between the division(s) and/or the Fixed
Account are not considered as distributions from the Policy and would not be
considered taxable income.
POLICY LOANS AND LOAN INTEREST
Loans received under the Policy are generally recognized as loans for tax
purposes and are not considered to be distributions subject to tax. Interest
paid to us as a result of a policy loan may or may not be deductible depending
on a number of factors. Due to the complexity of these factors, you should
consult a competent tax advisor as to the deductibility of interest paid on
policy loans. If the Policy is a modified endowment contract, a policy loan is
taxable to an amount equal to the lesser of the amount of the loan or the excess
of policy value over the owner's investment in the Policy.
If the Policy lapses with an outstanding loan balance, there may be tax
consequences. Please consult a competent tax advisor
CORPORATE ALTERNATIVE MINIMUM TAX
Ownership of a Policy by certain corporations may affect the owner's exposure to
the corporate alternative minimum tax. In determining whether it is subject to
alternative minimum tax, the corporate owner must make two computations. First,
the corporation must take into account a portion of the current year's increase
in the built-in gain in its corporate owned policies. Second, the corporation
must take into account a portion of the amount by which the death benefits
received under any Policy exceed the sum of a) the premiums paid on that Policy
in the year of death, and b) the corporation's basis in the Policy (as measured
for alternative minimum tax purposes) as of the end of the corporation's tax
year immediately preceding the year of death. The corporate alternative minimum
tax does not apply to S Corporations. Such tax also does not apply to "Small
Corporations" as defined by Section 55(c) of the Code. Corporations with gross
receipts of $5,000,000 or less for their first taxable year after 1996, with
gross receipts not exceeding $7,500,000 after the first taxable year, will meet
this definition.
EXCHANGE OR ASSIGNMENT OF POLICIES
A change of policy, or an exchange or assignment of a Policy may have tax
consequences. An assignment or exchange may result in taxable income to the
transferring owner. For complete information with respect to policy assignments
and exchanges, a qualified tax advisor should be consulted.
WITHHOLDING
Withholding is generally required on certain taxable distributions under
insurance contracts. In the case of periodic payments, the withholding is at
graduated rates. With respect to non-periodic distributions, withholding is a
flat rate of 10%. You may elect to have either non-periodic or periodic payments
made without withholding except if your tax identification number has not been
furnished to us or if the IRS has notified us that the number you furnished is
incorrect.
OTHER TAX ISSUES
Federal estate taxes and state and local estate, inheritance and other taxes may
become due depending on applicable law and your circumstances or the
circumstances of the policy beneficiary(ies) if you or the insured dies. Any
person concerned about the estate implications of the Policy should consult a
competent tax advisor.
EMPLOYEE BENEFIT PLANS
The United States Supreme Court has held that optional annuity benefits under a
qualified deferred compensation plan cannot vary on the basis of gender. Polices
are available for use in connection with employment related insurance or benefit
plans which do not vary between male and female insured of a particular age and
underwriting classification. A competent tax advisor should be consulted on
these matters.
LEGAL OPINIONS
Legal matters applicable to the issue and sale of the Policies, including our
right to issue Policies under Iowa Insurance Law, have been passed upon by Karen
E. Shaff, Senior Vice President and General Counsel.
LEGAL PROCEEDINGS
There are no legal proceedings pending to which the Separate Account is a party
or which would materially affect the Separate Account.
REGISTRATION STATEMENT
This prospectus omits some information contained in the registration statement
that we have filed with the SEC. Statements contained in this prospectus are
summaries of the contents of the Policy and other legal documents.
OTHER VARIABLE INSURANCE CONTRACTS
The Company currently offers other variable life contracts that participate in
the Separate Account. In the future, we may designate additional group or
individual variable annuity contracts as participating in the Separate Account.
RESERVATION OF RIGHTS
The Company reserves the right to amend or terminate the special plans described
in this prospectus. Such plans include preauthorized premium payments, dollar
cost averaging (DCA) and automatic portfolio rebalancing (APR). You would be
notified of any such action to the extent required by law.
CUSTOMER INQUIRIES
Your questions should be directed to: The Principal Variable Universal Life
Accumulator, Principal Financial Group, P.O. Box 9296, Des Moines, Iowa
50306-9296, 1-800-247-9988.
INDEPENDENT AUDITORS
The financial statements of the Principal Life Insurance Company Variable Life
Separate Account and the consolidated financial statements of the Principal Life
Insurance Company are included in this prospectus. Those statements have been
audited by Ernst & Young LLP, independent auditors, 801 Grand Avenue, Des
Moines, Iowa 50309, for the periods indicated in their reports.
FINANCIAL STATEMENTS
The consolidated financial statements of Principal Life Insurance Company which
are included in this prospectus should be considered only as it relates to our
ability to meet our obligations under the Policy. They do not relate to
investment performance of the assets held in the Separate Account.
PART II. OTHER INFORMATION
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter adopted under the authority conferred in that
section.
UNDERTAKING PURSUANT TO RULE 484
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter had been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
REPRESENTATION PURSUANT TO SECTION 26 OF THE INVESTMENT COMPANY ACT OF 1940
Principal Mutual Life Insurance Company represents the fees and charges deducted
under the Policy, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by the
Company.
REPRESENTATIONS PURSUANT TO RULE 6e-3(T) This filing is made pursuant to Rules
6c-3 and 6e-3(T) under the Investment Company Act of 1940. Registrant elects to
be governed by Rule 6e-3(T)(b)(13)(i)(A) under the Investment Company Act of
1940, with respect to the Policies described in the prospectus. Registrant makes
the following representations:
1) Section 6e-3(T)(b)(13)(iii)(F) has been relied upon.
2) The level of the mortality and expense risks charge is within the range of
industry practice for comparable contracts.
3) The Registrant has concluded that there is a reasonable likelihood that the
distribution financing arrangement for the Variable Life Separate Account will
benefit the separate account and policyowners, and it will keep and make
available to the Commission on request a memorandum setting forth the basis
for this representation.
4) The Variable Life Separate Account will invest only in management
investment companies which have undertaken to have a board of directors, a
majority of whom are not interested persons of the Company, formulate and
approve any plan under Rule 12b-1 to finance distribution expenses.
The methodology used to support the representation made in paragraph (2) above
is based upon an analysis of the mortality and expense risks charges contained
in other variable life insurance policies, including scheduled and flexible
premium products. Registrant undertakes to keep and make available to the
Commission on request the documents used to support the representation in
paragraph (2) above.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet;
The prospectus, consisting of 49 pages;
The undertaking to file reports;
The undertaking pursuant to Rule 484;
Representations pursuant to Rule 6e-3(T);
The signatures;
Written consents of the following persons:
Ernst & Young LLP
The following exhibits
1. Copies of all exhibits required by paragraph A of the instructions
as to exhibits in Form N-8B-2 are set forth below under
designations based on such instructions
1.A1 Resolution of Executive Committee of Board of Directors of
Principal Mutual Life Insurance Company establishing the Variable
Life Separate Account (filed 7/24/01)
1.A3A.a Distribution Agreement between Princor Financial Services
Corporation and Principal Mutual Life Insurance Company **
1.A3B.a Form of Selling Agreement**
1.A3B.b Registered Representative Agreement (filed 7/24/01)
1.A3C Schedule of sales commissions**
1.A5.a Form of Policy (filed 7/24/01)
1.A5.a.i Accelerated Benefit Rider (filed 7/24/01)
1.A5.a.ii Accidental Death Benefit Rider (filed 7/24/01)
1.A5.a.iii Accounting Benefit Rider
1.A5.a.iv Aviation Exclusion Rider (filed 7/24/01)
1.A5.a.v Change of Insured
1.A5.a.vi Children Term Insurance Rider (filed 7/24/01)
1.A5.a.vii Cost of Living Increase Rider (filed 7/24/01)
1.A5.a.viii Death Benefit Guarantee Rider (filed 7/24/01)
1.A5.a.ix Extended Coverage Rider (filed 7/24/01)
1.A5.a.x Hazardous Sports Rider (filed 7/24/01)
1.A5.a.xi Salary Increase Rider (filed 7/24/01)
1.A5.a.xii Spouse Term Insurance Rider (filed 7/24/01)
1.A5.a.xiii Supplemental Benefit Rider (filed 7/24/01)
1.A5.a.xiv Waiver of Monthly Policy Charge Rider (filed 7/24/01)
1.A5.a.xv Waiver of Specified Premium Rider (filed 7/24/01)
1.A6.a Articles of Incorporation, as Amended of Principal Life Insurance
Company (filed 7/24/01)
1.A6.b By-laws of Principal Life Insurance Company (filed 7/24/01)
1.A10.a Form of Application (filed 7/24/01)
1.A10.b Form of Conversion Application (filed 7/24/01)
1.A10.c Form of Supplemental Application**
2. Opinion and consent of Karen E. Shaff, Senior Vice President and
General Counsel (filed 7/24/01)
3. No financial statements will be omitted from the prospectus
pursuant to Instruction 1(b) or (c) or Part I
4. Not applicable
5. Not applicable
6. Consent of Ernst & Young LLP**
7. Description of Issuance, Transfer and Redemption Procedures
Pursuant to Rule 6e-3(T)(b)(12)(iii)**
8. Powers of Attorney of Directors of Principal Life Insurance
Company (filed 7/24/01)
9. Opinion and Consent of Lisa Butterbaugh (filed 7/24/01)
** To be filed by Amendment.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the city of Des Moines, and the state of Iowa, on the 15th day
of October, 2001.
PRINCIPAL LIFE INSURANCE COMPANY VARIABLE LIFE SEPARATE ACCOUNT
(Registrant)
By: PRINCIPAL LIFE INSURANCE COMPANY
(Depositor)
By: /s/ David J. Drury
------------------
David J. Drury
Chairman and Chief Executive Officer
Attest:
/s/ Joyce N. Hoffman
--------------------
Joyce N. Hoffman
Senior Vice President and
Corporate Secretary
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the date indicated
.
SIGNATURE TITLE DATE
/s/ D. J. Drury
--------------- 10/15/2001
------------
D. J. Drury Chairman and
Chief Executive Officer
/s/ D. C. Cunningham
-------------------- 10/15/2001
------------
D. C. Cunningham Vice President and
Controller (Principal
Accounting Officer)
/s/ M. H. Gersie
---------------- 10/15/2001
------------
M. H. Gersie Senior Vice President
(Principal Financial Officer)
(B. J. Bernard)*
---------------- 10/15/2001
------------
B. J. Bernard Director
(J. Carter-Miller)*
------------------- 10/15/2001
------------
J. Carter-Miller Director
(C. D. Gelatt, Jr.)*
-------------------- 10/15/2001
------------
C. D. Gelatt, Jr. Director
(J. B. Griswell)*
----------------- 10/15/2001
------------
J. B. Griswell Director
(S. L. Helton)*
--------------- 10/15/2001
------------
S. L. Helton Director
(C. S. Johnson)*
---------------- 10/15/2001
------------
C. S. Johnson Director
(W. T. Kerr)*
------------- 10/15/2001
------------
W. T. Kerr Director
(L. Liu)*
-------- 10/15/2001
------------
L. Liu Director
(V. H. Loewenstein)*
-------------------- 10/15/2001
------------
V. H. Loewenstein Director
(R. D. Pearson)*
---------------- 10/15/2001
------------
R. D. Pearson Director
(F. F. Pena)*
------------ 10/15/2001
------------
F. F. Pena Director
(D. M. Stewart)*
---------------- 10/15/2001
------------
D. M. Stewart Director
(E. E. Tallett)*
---------------- 10/15/2001
------------
E. E. Tallett Director
*By /s/ David J. Drury
------------------
David J. Drury
Chairman and Chief Executive Officer
Pursuant to Powers of Attorney
Previously Filed or Included Herein