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RILA now offering 20% buffers including dual direction options

05/01/2024

We’re committed to finding solutions for your clients’ investment needs. That’s why we’re happy to announce some exciting enhancements to our registered index-linked annuity (RILA) that may interest your most risk-averse clients.

Effective May 1, we’ll be offering four new segments with a 20% buffer.

Traditional buffer options:

  • 6-year S&P 500® 20% traditional buffer
  • 1-year S&P 500® 20% traditional buffer

Dual direction crediting options:

  • 6- year S&P 500® 20% peak buffer
  • 1-year S&P 500® 20% peak buffer

These investment segments are available on new Principal® Strategic Outcomes contracts signed May 1 or after, and on existing contracts when clients renew into a new segment. Check with your broker dealer on the ability to offer these options. State approvals are shown below.

 

Introducing our peak buffer segments

A peak buffer segment is a dual direction crediting option. In positive performing markets, clients receive the applied participation rates for their index credits. There are no caps to limit your clients’ potential gains.  And when the market performs poorly? Your clients will still receive positive credits as long as the index performance is within the protection of the buffer. That means investors will receive index credits for the first 20% of losses.

This resource helps explain how our peak buffer segments work.  

Change to 1-year segment
We will no longer offer both capped and uncapped options on our S&P 500® 1-year segment. We will offer capped or uncapped at our discretion. You can check all segments currently available at principal.com/strategicoutcomes.

 

Additional details

State approvals

  • Principal Strategic Outcomes is approved in all states except New York and Oregon. This includes the new 20% traditional buffer segments.
     
  • The peak buffer segments are approved in all states with the following exceptions:
    District of Columbia (DC), Indiana, Louisiana, Maryland, Missouri, Nebraska, Vermont, New York, and Oregon

 

Product support
Illustrations, applications, and servicing forms have been updated to reflect these enhancements.

Product training
The National Association of Investment Companies (NAIC) requires carrier-specific product training before you can sell a Principal Strategic Outcomes contract. 

  • If you have already completed product training for Principal Strategic Outcomes, no new training is required to sell the enhanced product.
     
  • If you haven’t yet completed training, you may access the required training course through these links:

Principal Financial Network 

Independent firm relationships 

 

Marketing resources

These materials have been updated to include information on our peak segment and other enhancements, and are available to use with clients:

 

Web-based access to the information you and your clients need

Access current and upcoming rates for all investment segments at principal.com/strategicoutcomes.

Our secure principal.com website also provides 24/7 access for clients to check segment performance, set segment lock-in preferences, initiate transfers, view statements, and much more.

 

Electronic delivery of prospectus

A digital prospectus is available to send to your clients. The following steps must be taken prior to sale:

  1. eConsent form (DD9068) must be signed and returned to you.
     
  2. Once the form has been completed, send your client the digital link to the prospectus.
  3. Submit the form with the application.
     
  4. You must keep evidence in your records that the prospectus was delivered electronically to your client.

A printed prospectus is also available.

 

Give us a call

Principal is happy to help fill the growing need for investment protection, and we’re committed to continuous improvement of our products. Please visit our website to learn more about the investment flexibility this product offers and to access important product resources. We’re eager to answer your questions and help you learn more about Principal Strategic Outcomes.

 

For more information, contact our annuity sales team at 866-309-1623.

 

 

 

For financial professional use only. Not for distribution to the public. 

May not be available in all states or with all broker dealers. Dual direction strategies may not be available in all states or with all broker dealers.

Principal® Strategic Outcomes does not directly participate in any stock, equity investments, or index. It is not possible to invest directly in an index.


IMPORTANT CONSIDERATIONS
Index-linked deferred annuity contracts are complex insurance and investment vehicles. This Contract is a security and there is a risk of substantial loss of principal and earnings. The risk of loss may be greater when early withdrawals are taken due to any charges and adjustments applied to such withdrawals. These charges and adjustments may result in loss even when the value of a segment option has increased. Clients should consult with a financial professional about the appropriateness of this product based on their financial situation and objectives.

There is risk that this segment interim value could be less than the original premium payment even if the applicable Index has been performing positively. The buffer or floor rate provides limited protection. There is a possibility of a significant amount of loss of the total premium payment, credited interest and prior earnings. In the index linked segment options it is possible that the total loss could be 100%. If clients choose to allocate amounts to an index linked segment option subject to a cap rate, that rate limits the positive index change, if any, that may be credited to the annuity for a given segment term. The participation rate limits the positive index change, if any, that may be credited to the annuity for a given segment term. It is possible to receive less than the full protection of the buffer rate or floor rate. Once a segment lock-In is executed, it is irrevocable for that segment term. A lock-in will not be applied retroactively and can only be exercised for the entire segment option. A segment lock-In may only be exercised once per segment term for each index-linked segment option. There is no guarantee that any particular segment option or Index will be available during the entire period.

Withdrawals will reduce the contract value and death benefit. Some withdrawals may be subject to additional charges and adjustments. Withdrawals before age 591/2 may be subject a 10% early withdrawal federal tax penalty in addition to ordinary income taxes.

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

All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. Policy guarantees and benefits are not obligations of, nor backed by, the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

Annuity products and services are offered through Principal Life Insurance Company®. Securities offered through Principal Securities, Inc., member SIPC, and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, Iowa 50392, principal.com.

Annuities have limitations. They are long-term vehicles designed for retirement purposes. Annuities are not intended to fund short-term savings goals.

S&P 500 is a trademark of S&P Global and is used under license. The product is not sponsored, endorsed, sold, or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the product.

Principal®, Principal Financial Group®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and services marks of Principal Financial Services, Inc., in various countries around the world.

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