Retirement, Investments, & Insurance for Individuals Invest & Retire Annuities Principal® Strategic Outcomes

Principal® Strategic Outcomes

Principal® Strategic Outcomes

A registered index-linked annuity

Strategic investing for personalized outcomes
Principal® Strategic Outcomes is a registered index-linked annuity (RILA). It lets you get personal about your investment strategy, giving you control to make decisions that make sense to you. By balancing options that offer growth opportunities and options that can help limit your losses, you can create a strategy that matches your comfort with investing.

What’s a RILA

Like other annuities, RILAs are long-term, tax-deferred investments. They offer investment options—called segments—that are linked to a specific market index for a set period of time. This gives you a level of control over how your assets are invested and for how long. 

  • Growth is based on the performance of the underlying indices you choose, up to a set participation rate or cap.
  • Index credits are what provide growth potential for your investment. Credits are based on the performance of the underlying index from the start date to the end date of your investment period.
  • RILAs also offer you some protection from investment loss. Loss is limited by either a buffer or floor.

Take control of your retirement planning

Invest for growth potential
Designed to keep your money growing in positive markets.

Help protect against loss
Limit some investment losses in down and volatile markets.

Make it personal
Choose between various index allocations, growth strategies, and investment protections. 
Photo of young Asian woman with laptop.

How Principal® Strategic Outcomes works

It’s all about choice. These choices help you personalize your investments to your specific goals.
How do segment lengths work?

Longer investment options may offer a higher participation rate, providing the opportunity for higher account gains. Shorter options give you more investment flexibility by allowing you to move your assets around more frequently.

Chart showing term period and potential return

Strategic Outcomes offers investment options of one, two, and six years. You select the segment term, which is how long you want to invest money in that investment option.

1-year term
Enjoy the highest level of flexibility. You can reset your protection level each year and realize any earnings on an annual basis.

2-year term
You’ll still have investment flexibility with this option and benefit from higher participation rates than the 1-year segments.

6-year term
This option has the highest participation rates which means more growth potential in exchange for less flexibility.
What index or indices do you want to participate in?
Chart showing that you can chose from four different indices (S&P 500, Russell 200 index, MSCI EAFE index, SG Smart Climate)

What index or indices do you want to participate in?
You can choose from three well-known indices or an ESG index. The performance of the index will determine your investment growth.

Each investment option tracks and provides credits – either positive or negative. Crediting is based on the change to the index between your segment start and end dates. Credits are applied when your chosen investment option ends.
 
What’s the difference between a buffer and a floor?
Chart showing the difference between a buffer and floor

Strategic Outcomes offers two protection levels – a buffer and a floor. Both protect you from some investment loss. We also offer two full protection options.

Buffer option
A buffer protects you from losses up to the stated buffer. You absorb any losses beyond the buffer.

Floor option
You absorb losses up to the stated floor but are protected from losses beyond that. We offer a 0% floor which protects you from any loss.

Fixed segment option
We offer a fixed segment investment option that isn't tied to an index. Instead, you receive a fixed rate of return, giving you full protection from market loss but not the growth potential of other segment options.

Amounts allocated to a fixed segment option earn interest at the applicable annual interest rate for the segment term. The annual interest rate declared at the beginning of the segment term is guaranteed until the segment end date.

If you allocate your accumulated value to the fixed segment option, the value of that segment at any time will be equal to the accumulated value allocated on the fixed segment start date, plus interest during the segment term and minus any amount deducted during the segment term.
What’s the difference between a participation rate and a cap?
Graphic showing participation rate or index cap impacting your investments.

You have two different growth strategies available to you—a participation rate or a cap.

A participation rate is used to determine the amount of credit given on an investment. Any positive change in the underlying index is multiplied by the participation rate. The rate may be more or less than 100%.

A cap is the maximum return available to you when the index performs positively. 

Participation and cap rates are included in exchange for the downside protection provided and may limit your investment performance.

Want an extra boost?

If you’d like to boost your gains in positive performing markets, you can choose the optional rate enhancement rider. The rider increases either the participation rate or cap for your investment options. The rate enhancement rider is available on all index-linked segments for an additional fee.

Lock in your investment performance

At any time if you feel your investment objectives have been met and you’d like to lock-in your gains, or remove your investment from market volatility, you can use the segment performance lock-in feature. It comes automatically with your investment for no additional charge.

4 different hypothetical scenarios to help demonstrate how this works

 

10% buffer with a participation rate

Graph showing a 10% buffer with a participation rate

UP MARKET SCENARIO

The index performance is +20% with 100% participation rate. Your return would be +20%.

Your ending value:
$120,000

DOWN MARKET SCENARIO

The index performance is -20% with a 10% buffer. Your return would be -10%.

Your ending value:
$90,000

10% buffer with a cap

Graph showing a 10% buffer with a cap

UP MARKET SCENARIO

The index performance is +20% with a 10% cap. Your return would be +10%.

Your ending value:
$110,000

DOWN MARKET SCENARIO

The index performance is -20%. With a 10% buffer, your return would be -10%.

Your ending value:
$90,000

10% floor with a participation rate

Graphic showing a 10% floor with a participation rate

UP MARKET SCENARIO

The index performance is 20% with a 50% participation rate. Your return would be 10%.

Your ending value:
$110,000

DOWN MARKET SCENARIO

The index performance is -20%. With a 10% floor, your return would be -10%.

Your ending value:
$90,000

0% floor with a participation rate

Graphic showing 0% floor with a participation rate

UP MARKET SCENARIO

The index performance is +20% with a 30% participation rate. Your return would be +6%.

Your ending value:
$106,000

DOWN MARKET SCENARIO

The index performance is -20% with a 0% floor. Your return would be 0%.

Your ending value:
$100,000

All examples are hypothetical and are not meant to show actual results or predict future results. It’s intended to be educational in nature and is not intended to be taken as a recommendation. Your circumstances and experience will be different than that shown.

Is Principal® Strategic Outcomes right for you?

This could be a good investment for you if:

  • You're interested in keeping money invested for potential growth.
  • You want some loss protection if markets go down.
  • You're looking for tax-deferred growth.
  • You’re comfortable keeping your money in a long-term investment.
  • You want the flexibility to change your investment strategy if your financial goals change.
See how we can help

Talk with your financial professional to learn more and determine if Outcome Protector is right for you.

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.

Before investing in registered index-linked annuities, investors should carefully consider the investment objectives, risks, charges and expenses of the contract and underlying investment options. This and other information is contained in the free prospectus which can be obtained from your local representative or online at principal.com. Please read the prospectus and, if available, the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

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 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 Life Insurance Company. Securities offered through Securities, Inc., member SIPC, and/or independent broker/dealers. Referenced companies are members of the 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.

© 2023 Financial Services, Inc. Principal®, Financial Group®, and and the logomark design are registered trademarks of Financial Services, Inc., a Financial Group company, in the United States and are trademarks and services marks of Financial Services, Inc., in various countries around the world.
711 High Street, Des Moines, Iowa 50392

The SG Smart Climate Index is the exclusive property of SG Americas Securities, LLC (together with its affiliates, “SG”). SG has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) (“S&P”) to maintain and calculate the SG Smart Climate Index. “SG Americas Securities, LLC”, “SGAS”, “Société Générale”, “SG”, “Société Générale Indices”, “SGI”,
“SG Smart Climate Index”, and “SG Climate Transition Risk Index” (collectively, the “SG Marks”) are trademarks or service marks of SG or have been licensed for use by SG from Entelligent, Inc. (“Entelligent”). SG has licensed use of the SG Marks to Life Insurance Company (“Life”) and sub-licensed the use of certain Entelligent marks (the “Entelligent
Marks”) for use in a registered indexed annuity offered by Life (the “Product”). SG’s sole contractual relationship with Life is to license the SG Smart Climate Index and the SG Marks and sub-license the Entelligent Marks to Life. None of SG, S&P, Entelligent or other third party licensor to SG (each individually, an “Index Party” and collectively, the
“Index Parties”) is acting, or has been authorized to act, as an agent of Life or has in any way sponsored, promoted, solicited, negotiated, endorsed, offered, sold, issued, supported, structured or priced any Product or provided investment advice to Life. The Index Parties have no obligation to make payments under the Product. The Index Parties make no representation or warranty, express or implied, to investors in the Product and hereby disclaim all warranties (including, without limitation, those of merchantability or fitness for a particular purpose or use): (a) regarding the advisability of investing in any products linked to the SG Smart Climate Index or (b) the suitability or appropriateness of an exposure to the SG Smart Climate Index in seeking to achieve any particular objective, including meeting its stated target volatility. No Index Party shall have any responsibility or liability for any losses in connection with the Product, including with respect to design, issuance, administration, actions of Life, marketing, trading or performance of the Product. The Index Parties have not prepared any part of this document and no statements made herein can be attributed to the Index Parties. SG does not act as an investment adviser or provide investment advice in respect of the SG Smart Climate Index or the Product and does not accept any fiduciary or other duties in relation to the SG Smart Climate Index, the Licensee, the Product or any investors in the
Product. The Index Parties shall have no liability for any act or failure to act in connection with the determination, adjustment or maintenance of the SG Smart Climate Index. Without limiting the foregoing, the Index Parties shall have no liability for any damages or lost profits, even if notified of the possibility of such damages. In calculating the daily performance of the SG
Smart Climate Index, SG deducts 1.5% of the performance of the SG Smart Climate Index, which corresponds to the synthetic dividend yearly yield embedded in the SG Smart Climate Index. In addition, in calculating the daily performance of the subindex comprising the SG Smart Climate Index, SG deducts fixed replication costs that cover, among other things, replicating the SG Smart Climate Index. The embedded costs will reduce the performance of the SG Smart Climate Index. This index is an “excess return” index. The Index’s return reflects the total return on an investment in the underlying component stocks (including reinvestment of all dividends, interest, and other income), less certain negative adjustments and deductions that reduce the performance of the index. Contract rider descriptions are not intended to cover all restrictions, conditions or limitations. Refer to rider for full details.

ESG Methodology Risk. The Underlying SGI Index is composed of stocks that are selected based on an ESG methodology that includes climate risk scores and ESG exclusion filters. Investors’ views about ESG matters may differ from the Underlying SGI Index’s ESG methodology. As such, the ESG methodology may not reflect the beliefs or values of any particular investor. There is no guarantee that the ESG methodology will ultimately enhance the performance of the Index. The ESG methodology could detract from the performance of the Index, as companies with lower ESG ratings may perform better than companies with higher ESG ratings over the short or long term. Due to the inherent difficulty of forecasting within complex systems and the general unpredictability of future events, there is no guarantee that the predictive climate risk models used by the Underlying SGI Index will identify stocks that will perform well if climate events occur. Amounts invested in a Segment Option that is linked to the Index are not invested in the Index, the Underlying SGI Index, or the underlying stocks. Amounts that clients invest become assets of the Company. The assets in the Company’s General Account and the Separate Account, which the Company invests to support its payment obligations under the Contract, are not invested based on ESG factors. New Index Risk. The Index and the Underlying SGI Index have limited performance histories. Generally, there is less publicly available information about the Index and the Underlying SGI Index compared to more established market indexes. Inquiries regarding the Index or the Underlying SGI Index should be directed to our Administrative Office or a financial intermediary.