How do buffer accounts fit with my client’s financial goals?
How do buffer accounts fit with my client’s financial goals?
The Principal PVC U.S. LargeCap Buffer Series accounts work in combination with both equity and fixed income holdings to help reinforce your client’s investment objectives and risk tolerance. They have the flexibility to adjust as needs and goals change.
Having a 10% downside buffer on a portion of the portfolio changes the risk profile of a 60/40 equity/bond allocation.
Having a 10% downside buffer on a portion of the portfolio changes the risk profile of a 60/40 equity/bond allocation model. Buffer accounts can allow clients to gain greater equity exposure without taking on as much market risk. This provides more diversification options. Clients don’t need to invest in separate products to achieve this type of diversification – it can all be done within the Principal variable annuity.
Asset allocation and diversification do not ensure a profit or protect against a loss for your clients.
Buffer series not available in New York and may not be available with all broker dealers.
Before investing, carefully consider the investment option objectives, risks, charges, and expenses. Contact a financial professional or visit principal.com for a prospectus or, if available, a summary prospectus containing this and other information. Please read carefully before investing.
The buffer funds have characteristics unlike many other traditional investment products and may not be suitable for all investors. These strategies could limit the upside participation of the buffer fund in rising equity markets relative to other funds. The buffer provides limited protection in the event of a market downturn; the buffer fund does not provide principal protection, and an investment may experience significant losses on its investment, including the loss of its entire investment. The buffer Fund may invest in FLEX Options, which are associated with additional risks. Due to the cost of the options used by the Fund, the correlation of the Fund’s performance to that of the Index is expected to be less than if the Fund invested directly in the Index without using options and could be substantially less.
The potential return an investor can receive is subject to the upside cap and the partial participation beyond the cap. If the index grows beyond the cap, the investor will not experience the full gains. The investor will receive a percentage of any gains beyond the cap. This amount, net of fees and expenses, is the maximum return an investor can achieve over its outcome period.
Buffer and participation rates apply if investment is held from the beginning of the outcome period until the end of the outcome period. Investments can happen at any time during the outcome period; but results will vary. The buffer and participation rate will reset annually. Index returns do not reflect any fees, expenses, or sales charges.
There is no guarantee the investment options will be successful in achieving these outcomes for any outcome period. Returns may only be realized if investors hold the investment options from the beginning to the last day of the outcome period. Those who invest after the outcome period has begun, or sell prior to the end of the outcome period, will experience different returns than if the investment had been held for the full one-year segment. For current rates please visit principal.com/buffer.
Variable annuities are long-term investment products designed for retirement purposes and are subject to market fluctuation, investment risk, and possible loss of principal. Variable annuities contain both investment and insurance components and have fees and charges, including mortality and expense, administration, investment option fees. An annuity's value fluctuates with the market value of the underlying investment options, and all assets accumulate tax-deferred. Withdrawals of earnings are taxable as ordinary income and, if taken prior to age 59½, may be subject to an additional 10% federal tax. Withdrawals will reduce the death benefit and cash surrender value.
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.
Annuity products and services are offered through Principal Life Insurance Company. Principal Variable Contracts Funds are distributed by Principal Funds Distributor, Inc. 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.
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