Page 1 -01/09/03
B/D Name
BROKER-DEALER
MARKETING AND SERVICING AGREEMENT
FOR
VARIABLE LIFE CONTRACTS
This Broker-Dealer Marketing and Servicing Agreement for Variable Life Contracts
(the "Agreement") is dated this ______ day of ________________, 2002, by and
between Princor Financial Services Corporation ("Princor"), and Principal Life
Insurance Company (the "Insurer"), respectively the distributor and issuer for
and of the Policies hereinafter described, and ABC Company ( "Broker-Dealer")
(individually, a "Party" and collectively, the "Parties") The Parties enter into
this Agreement for the purpose of appointing the Broker-Dealer to perform the
services hereunder described, subject to the following provisions:
1. Except as otherwise provided below, Princor hereby appoints the
Broker-Dealer to provide sales assistance with respect to, and to cause
applications to be solicited for the purchase of variable life policies
issued by the Insurer (the "Policies" or "Policy"). Broker-Dealer accepts
such appointment and agrees to use its best efforts to provide sales
assistance to registered representatives of the Broker-Dealer and to cause
applications for the purchase of Policies to be solicited by such
registered representatives. Broker-Dealer agrees to pay a commission to
such registered representatives. Commissions will be paid to the registered
representative's broker-dealer of record.
Insurer represents that the Policies, including any related separate
accounts, shall comply with the registration and other applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the
Investment Company Act of 1940 (the "40 Act") and the rules and regulations
thereunder, including the terms of any order of the Securities and Exchange
Commission (the "SEC") with respect thereto. Insurer further represents
that the Policy prospectuses included in the Insurer's registration
statement, post-effective amendments, and any supplements thereto, as filed
or to be filed with the SEC, as of their respective effective dates,
contain or will contain all statements and information required to be
stated therein by the 1933 Act and in all respects conform or will conform
to the requirements thereof, and no prospectus, nor any supplement thereof,
includes or will include any untrue statement of a material fact, or omits
or will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, provided, however,
that the foregoing representations shall not apply to information contained
in or omitted from any prospectus or supplement in reliance upon and in
conformity with written information furnished to the Insurer by the
Broker-Dealer specifically for use in preparation thereof. The foregoing
representations also shall not apply to information contained in or omitted
from any prospectus or supplement of any underlying mutual fund.
2. The Broker-Dealer will promptly forward to the appropriate office of
Princor, or its authorized designee, all Policy applications along with
other documents, if any, and any payments received with such applications
and will have no rights of set off for any reason. Any Policy application
which is rejected, together with any payment made and other documents
submitted, shall be returned to the Broker-Dealer.
3. Insurer, on behalf of Princor, shall pay compensation to Broker-Dealer as
set out in Exhibits A through F, attached to this Agreement; provided,
however, that Princor and Insurer reserve the right to revise the payments
for services described in the Exhibits to this Agreement at any time upon
the mailing of written notice to Broker-Dealer. Broker-Dealer agrees to
return promptly to Insurer all compensation received for any Policy
returned within the "free look" period as specified in the Policy.
4. In those states where Broker-Dealer cannot obtain an insurance license,
Broker-Dealer represents and warrants that: it will effect the sale of the
Policy through a validly licensed insurance representative ("Compensation
Representative") who has entered into an agreement with Broker-Dealer for
this purpose; it authorizes Insurer to pay any compensation owed to
Broker-Dealer from sales of a Policy to such Compensation Representative;
it remains fully responsible for recordkeeping and supervision of the
solicitation and/or sale of the Policy; all compensation received by
Compensation Representative in accordance with this section will be
distributed by Compensation Representative only to duly licensed and
registered representatives who have been appointed by the Insurer to
solicit for applications for the Policies.
Broker-Dealer represents that it is a registered broker-dealer under the
Securities Exchange Act of 1934, a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD"), and is registered as a
broker-dealer under state law to the extent required in order to provide
the services described in this Agreement. Broker-Dealer agrees to abide by
all rules and regulations of the NASD Regulation, Inc. ("NASDR"), including
its Conduct Rules, and to comply with all applicable state and federal laws
and the rules and regulations of authorized regulatory agencies affecting
the sale of the Policies, including the prospectus delivery requirements
under the 1933 Act for the Policies and any underlying mutual fund. The
Broker-Dealer is responsible for prospectus delivery requirements only on
initial sale. The Insurer and underwriter will be responsible for
prospectus delivery annually after the original sale.
Broker-Dealer agrees to notify Princor promptly of any change, termination,
or suspension of its status as a broker-dealer or NASD member.
Broker-Dealer shall immediately notify Princor with respect to i) the
initiation and disposition of any form of disciplinary action by the NASDR
or any other agency or instrumentality having jurisdiction with respect to
the subject matter hereof against Broker-Dealer or any of its
representatives, employees or agents; ii) the issuance of any form of
deficiency notice made part of the public record by the NASDR or any such
agency regarding Broker-Dealer's training, supervision or sales practices;
and/or iii) the effectuation of any consensual order with respect thereto.
6. In connection with the solicitation of applications for the purchase of
Policies, Broker-Dealer agrees to indemnify and hold harmless Princor and
the Insurer from any damage or expense as a result of (a) the negligence,
misconduct or wrongful act of Broker-Dealer or any employee, representative
or agent of the Broker-Dealer and/or (b) any actual or alleged violation of
any securities or insurance laws, regulations or orders and/or (c) any
actual or alleged obligation of the Compensation Representative under terms
of the agreement between the Broker-Dealer and the Compensation
Representative, including claims by one or more of the Broker-Dealer's
representatives for compensation due or to become due on account of such
representatives' sales of the Policy and any claims or controversy between
Broker-Dealer and Compensation Representative as to rights to compensation.
Any indebtedness or obligation of the Broker-Dealer to Princor or the
Insurer, whether arising hereunder or otherwise, and any liabilities
incurred or moneys paid by Princor or the Insurer to any person as a result
of any misrepresentation, wrongful or unauthorized act or omission,
negligence of or failure of Broker-Dealer or its employees, producers, and
registered representatives to comply with this Agreement, shall be set off
against any compensation payable under this Agreement. Notwithstanding the
foregoing, Broker-Dealer shall not indemnify and hold harmless Princor and
the Insurer from any damage or expense on account of the negligence,
misconduct or wrongful act of Broker-Dealer or any employee, representative
or producer of Broker-Dealer if such negligence, misconduct or wrongful act
arises out of or is based upon any untrue statement or alleged untrue
statement of material fact, or the omission or alleged omission of a
material fact in: (i) any registration statement, including any prospectus
or any post-effective amendment thereto; or (ii) any material prepared
and/or supplied by Princor or the Insurer for use in conjunction with the
offer or sale of Policies, or (iii) any state registration or other
document filed in any state or jurisdiction in order to qualify any
Policies under the securities laws of such state or jurisdiction. The terms
of this provision shall not be impaired by termination of this Agreement.
7. In connection with the solicitation of applications for the purchase of
Policies, Princor and the Insurer agree to indemnify and hold harmless
Broker-Dealer from any damage or expense on account of the negligence,
misconduct or wrongful act of Princor or the Insurer or any employee,
representative or producer of Princor or the Insurer, including but not
limited to, any damage or expense which arises out of or is based upon any
untrue statement or alleged untrue statement of material fact, or the
omission or alleged omission of a material fact in: (i) any registration
statement, including any prospectus or any post-effective amendment
thereto; or (ii) any material prepared and/or supplied by Princor or the
Insurer for use in conjunction with the offer or sale of the Policies; or
(iii) any state registration or other document filed in any state or other
jurisdiction in order to qualify any Policy under the securities laws of
such state or jurisdiction and/or any actual or alleged violation of any
securities or insurance laws, regulations or orders. The terms of this
provision shall not be impaired by termination of this Agreement.
8. The Broker-Dealer will itself be, or will select persons associated with it
who are trained and qualified to solicit applications for purchase of
Policies in conformance with applicable state and federal laws. Any such
persons shall be registered representatives of the Broker-Dealer in
accordance with the rules of the NASDR, be licensed to offer the Policies
in accordance with the insurance laws of any jurisdiction in which such
person solicits applications and be licensed with and appointed by the
Insurer to solicit applications for the Policies. Broker-Dealer will
supervise its representatives to insure that purchase of a Policy is not
recommended to an applicant in the absence of reasonable grounds to believe
that the purchase of a Policy is suitable for that applicant. Broker-Dealer
shall pay the fees to regulatory authorities in connection with obtaining
necessary securities licenses and authorizations for registered
representatives to solicit applications for the purchase of Policies.
Insurer is responsible for fees in connection with the appointment of
registered representatives as producers of the Insurer.
9. The activities of all registered representatives, employees and agents
(the"producers") will be under the direct supervision and control of the
Broker-Dealer. The right of producers to solicit applications for the
purchase of Policies is subject to their continued compliance with the
rules and procedures which may be established by the Broker-Dealer, or the
Insurer, including, but not limited to, those set forth in this Agreement.
10. The Broker-Dealer shall ensure that applications for the purchase of
Policies are solicited only in the states where the Policies are qualified
for sale, and only in accordance with the terms and conditions of the then
current prospectus applicable to the Policies and will make no
representations not included in the prospectus, Statement of Additional
Information, or in any authorized supplemental material supplied by
Princor. With regard to the Policies, the Broker-Dealer shall not use or
permit its producers to use any sales promotion materials or any form of
advertising other than that supplied or approved by Princor. The Insurer
and Princor shall provide only approved supplemental material, advertising
and sales materials, including illustrations, for Broker-Dealer use.
11. Broker-Dealer shall ensure that the prospectus delivery requirements under
the 1933 Act and all other applicable securities and insurance laws, rules
and regulations are met and that delivery of any prospectus for the
Policies will be accompanied by delivery of the prospectus for the
underlying mutual funds, and, where required by state law, the Statement of
Additional Information for the underlying mutual funds. The Insurer or
Princor shall inform the Broker-Dealer of those states which require
delivery of a Statement of Additional Information with the prospectus on
initial sale.
Broker-Dealer understands and agrees that in performing the services
covered by this Agreement, it is acting in the capacity of an independent
contractor and not as an agent or employee of Princor or the Insurer and
that it is not authorized to act for, or make any representation on behalf
of, Princor or the Insurer except as specified herein. Broker-Dealer
understands and agrees that the Insurer shall execute telephone
transactions only in accordance with the terms and conditions of the then
current prospectus applicable to the Policies and agrees that in
consideration for the Broker-Dealer's right to exercise the telephone
transaction services neither Princor nor the Insurer will be liable for any
loss, injury or damage incurred as a result of acting upon, nor will they
be held responsible for the authenticity of any telephone instructions
containing unauthorized, incorrect or incomplete information. Broker-Dealer
agrees to indemnify and hold harmless Princor and the Insurer against any
loss, injury or damage resulting from any telephone transactions
instruction containing unauthorized, incorrect or incomplete information
received from Broker-Dealer or any of its registered representatives.
(Telephone instructions are recorded on tape.)
13. This Agreement may not be assigned by the Broker-Dealer without the prior
written consent of Princor.
14. Any Party hereto may cancel this Agreement at any time upon written notice.
This Agreement shall automatically terminate if Broker-Dealer voluntarily
or involuntarily ceases to be or is suspended from being, a member in good
standing of the NASD. In addition, Princor and Insurer reserve the right to
terminate this Agreement in the event that any registered representative,
employee or agent of Broker-Dealer is suspended, disciplined or found to be
in violation of governing insurance or securities laws, rules or
regulations. Failure of any party to terminate this Agreement for any of
the causes set forth in this Agreement shall not constitute a waiver of the
right to terminate this Agreement at a later time for any such causes.
15. Confidentiality Each Party acknowledges that, in the course of performing
its duties under this Agreement or otherwise, it may receive or learn
information about individuals who have applied for or purchased financial
products or financial services from the other Party, including, but not
limited to, personal, financial and/or health information ("Confidential
Information"). Each Party agrees that it will not use or disclose to any
affiliate or third party, either orally or in writing, any Confidential
Information of the other Party for any purpose other than the purpose for
which the Confidential Information was provided to that Party. Without
limiting any of the foregoing, each Party agrees to take all precautions
that are reasonably necessary to protect the security of the other Party's
Confidential Information. Each Party agrees to restrict access to the other
Party's Confidential Information to those employees who need to know that
information to perform their duties under this Agreement. Each Party
further agrees that, upon request of the other Party, it will return to the
Party making such request all tangible items containing any Confidential
Information of the other Party, including all copies, abstractions and
compilations thereof, without retaining any copies of the items required to
be returned. The obligations of this paragraph extend to the employees,
agents, affiliates and contractors of each Party, and each Party shall
inform such persons of their obligations hereunder.
Notification obligation Each Party shall, upon learning of any unauthorized
disclosure or use of any of the other Party's Confidential Information,
notify the other Party promptly and cooperate fully with such Party to
protect such Confidential Information.
Disclosure required by law If Broker-Dealer believes it is required by law
or by a subpoena or court order to disclose any Confidential Information,
Broker-Dealer, prior to any disclosure, shall promptly notify Insurer in
writing attaching a copy of the subpoena, court order or other demand and
shall make all reasonable efforts to allow Insurer an opportunity to seek a
protective order or other judicial relief.
Non-restricted information Except as stated in the final sentence of this
paragraph, nothing in this Agreement shall be construed to restrict
disclosure or use of information that: (a) was in the possession of or
rightfully known by the recipient, without an obligation to maintain its
confidentiality, prior to receipt from the other Party; (b) is or becomes
generally known to the public without violation of this Agreement; (c) is
obtained by the recipient in good faith from a third party having the right
to disclose it without an obligation of confidentiality; (d) is
independently developed by the receiving party without the participation of
individuals who have had access to the other Party's confidential or
proprietary information. The Parties acknowledge that certain laws
governing Confidential Information about individuals are more restrictive
than the foregoing statements and they agree to comply in all respects with
such laws.
Compliance with law Each Party agrees, In connection with its performance
under this Agreement, to comply with all applicable laws, including but not
limited to laws protecting the privacy of non-public personal information
about individuals.
Survival The provisions of this Agreement relating to confidentiality shall
survive termination or expiration of this Agreement.
16. This Agreement on the part of the Broker-Dealer runs to Princor and the
Insurer and is for the benefit of and enforceable by each.
17. This Agreement shall be governed by and construed in accordance with the
laws of the State of Iowa.
18. Anti-Money Laundering and Know Your Customer Compliance: Broker-Dealer
represents, covenants and agrees that Broker-Dealer is, and at all times
during the term of this Agreement shall be, in compliance with NASD Rule
3011 and the anti-money laundering and know-your-customer requirements
thereof.
This Broker-Dealer Marketing and Servicing Agreement for Variable Life Contracts
is agreed to as of the date shown on the first page of the Agreement by
Broker Dealer Name
By:
-----------------------------------------
Title:
---------------------------------------
Date:
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Princor Financial Services Corporation
By:
-----------------------------------------
Title:
---------------------------------------
Date:
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Principal Life Insurance Company
By
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Xxxxx X. Xxxxxxxx
Title:SMB Distribution Support Officer
---------------------------------
Date:
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EXHIBIT A - Compensation Schedule
For VUL Accumulator
Principal Life Insurance Company ("Principal" or "we") will pay commissions on
premiums we receive on sales of Policies made pursuant to the Broker-Dealer
Marketing and Servicing Agreement for Variable Life Contracts Agreement (the
"Agreement") according to the schedule below on premiums we receive.
We may, by written notice to Broker-Dealer (1) change this compensation
schedule; (2) discontinue the issuance of any form of Policy; and/or (3) fix or
change the amount of compensation on Policies issued in exchange for previously
issued Policies.
First Year Commissions
a) 50%* of premiums we receive up to the planned periodic premium, but
not to exceed target premium**.
b) 2.5% of premiums we receive that exceed the lesser of planned periodic
premium or target premium.
* See special provisions for Accounting Benefit Rider set out at
the end of this Exhibit.
** The target premium is determined according to a rate per $1,000
of face amount and varies by age and sex of the insured as set
out in the following table.
Target Premiums (Annual per $1,000 face amount)
============ ========== ========== ========== ========= ========== ========== ========== ========= ========== ========== ==========
AGE MALE FEMALE UNISEX AGE MALE FEMALE UNISEX AGE MALE FEMALE UNISEX
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
0-10 2.18 1.74 2.09 35 8.66 6.51 8.23 60 30.89 22.70 29.25
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
11 2.29 1.83 2.20 36 9.29 7.00 8.83 61 32.13 23.98 30.50
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
12 2.40 1.91 2.30 37 9.91 7.48 9.42 62 33.38 25.27 31.76
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
13 2.51 2.00 2.41 38 10.54 7.97 10.03 63 34.62 26.55 33.01
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
14 2.62 2.08 2.51 39 11.16 8.45 10.62 64 35.87 27.84 34.26
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
15 2.73 2.17 2.62 40 11.79 8.94 11.22 65 37.11 29.12 35.51
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
16 2.96 2.36 2.84 41 12.41 9.43 11.81 66 37.47 29.68 35.91
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
17 3.20 2.54 3.07 42 13.04 9.91 12.41 67 37.83 30.25 36.31
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
18 3.43 2.73 3.29 43 13.66 10.40 13.01 68 38.19 30.81 36.71
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
19 3.67 2.91 3.52 44 14.29 10.88 13.61 70 38.91 31.94 37.52
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
20 3.90 3.10 3.74 45 14.91 11.37 14.20 71 39.46 32.50 38.07
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
21 3.92 3.11 3.76 46 15.89 11.86 15.08 72 40.02 33.06 38.63
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
22 3.94 3.13 3.78 47 16.86 12.35 15.96 73 40.58 33.62 39.19
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
23 3.95 3.14 3.79 48 17.84 12.85 16.84 74 41.14 34.19 39.75
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
24 3.97 3.16 3.81 49 18.81 13.34 17.72 75 41.70 34.75 40.31
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
25 3.99 3.17 3.83 50 19.79 13.83 18.60 76 43.93 36.61 42.47
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
26 4.46 3.50 4.27 51 20.77 14.32 19.48 77 46.15 38.46 44.61
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
27 4.93 3.84 4.71 52 21.74 14.81 20.35 78 48.38 40.32 46.77
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
28 5.39 4.17 5.15 53 22.72 15.30 21.24 79 50.60 42.18 48.92
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
29 5.86 4.51 5.59 54 23.69 15.79 22.11 80 52.83 44.04 51.07
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
30 6.33 4.84 6.03 55 24.67 16.28 22.99 81 55.05 45.89 53.22
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
31 6.80 5.17 6.47 56 25.91 17.56 24.24 82 57.28 47.75 55.37
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
32 7.26 5.51 6.91 57 27.16 18.85 25.50 83 59.50 49.61 57.52
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
33 7.73 5.84 7.35 58 28.40 20.13 26.75 84 61.73 51.46 59.68
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
34 8.19 6.18 7.79 59 29.65 21.42 28.00 85 63.95 53.32 61.82
============ ========== ========== ========== ========= ========== ========== ========== ========= ========== ========== ==========
Asset Based Compensation ("Trail Compensation")
We will pay Trail Compensation commencing at the end of the first quarter of
Policy Year Six (6) and every quarter thereafter as long as the Policy
remains in effect and this Agreement is in effect and active. The percentage
of Trail Compensation we will pay is based on the accumulated value ("AV")
of a Policy (as shown on the Policy's quarterly report) as shown in the
following table:
================= =================================== ============================================================================
YEAR TOTAL % AV TRAIL COMPENSATION BREAKDOWN OF AV TRAIL COMPENSATION
----------------- ----------------------------------- ----------------------------------------------------------------------------
----------------- ----------------------------------- ----------------------------------------------------------------------------
6-10 0.25% o 0.15% vested to original selling agent
o 0.10% non-vested to servicing agent
----------------- ----------------------------------- ----------------------------------------------------------------------------
----------------- ----------------------------------- ----------------------------------------------------------------------------
11 0.15% o 0.10% vested to original selling agent
o 0.05% non-vested to servicing agent
----------------- ----------------------------------- ----------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
*One fourth of the annual Trail Compensation is multiplied by the total AV on
the last day of the contract quarter starting at the end of the 1st quarter in a
Policy's sixth contract year.
==================================================================================================================================
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Compensation for Renewals
-------------------------------------------------------------------------------
We will pay a renewal fee of 2.5% on all premiums we receive during
Policy Years two (2) through five (5) as long as the Policy remains in
effect and this Agreement is in effect and active.
Compensation on Increases
"Increase" is a face amount increase of a Policy; to determine the
amount of an Increase, if any, we compare the increased face amount of
a Policy against the highest policy face amount of that policy during
the immediately preceding three year period. We will pay a 50%*
commission on premiums we receive that are attributable to the Increase
and that we receive during the 12 months following the Increase, up to
the planned periodic premium for the Increase amount, but not to exceed
the target premium of the Increase amount.
* See special provisions for Accounting Benefit Rider set out at
the end of this Exhibit.
Compensation Where VUL Accumulator Replaces Other Variable Life Policies Issued
by Principal Life Insurance Company
A. First year commission: We will pay first year commission on a new VUL
Accumulator Policy (the "Replacement Policy") that replaces an existing
Principal Variable Life Policy (the "Replaced Policy") in an amount which
is the sum of 1,2, 3 and 4, below:
1. First year commission at the rate set out in First Year Commissions of
this Exhibit will be applied to Replacement Policy premiums we receive
that exceed the premiums on the Replaced Policy, not to exceed the
lesser of the planned periodic premium or the target premium for the
Replacement Policy.
2. A percentage of the first year commission rate of the Replacement
Policy (as set out in the table below) based on the number of years
since the Replaced Policy was issued or updated*) will be applied to
the Replaced Policy planned periodic premium, not to exceed target
premium of the Replaced Policy. The commission rate paid according to
this paragraph and the table below shall in no event exceed the
applicable first year commission rates as set out in the First Year
Commissions section of this Exhibit.
* "updated" means any increase or decrease of face amount of any
Policy.
======================= ======================================== ===================== =========================================
YRS SINCE DATE OF % OF REPLACEMENT POLICY'S FIRST YEAR YRS SINCE DATE OF % OF REPLACEMENT POLICY'S
ISSUE OR UPDATE OF COMMISSION RATE PAYABLE ON REPLACED ISSUE OR UPDATE OF FIRST YEAR COMMISSION RATE PAYABLE ON
REPLACED POLICY PREMIUM* REPLACED POLICY REPLACED PREMIUM*
----------------------- ---------------------------------------- --------------------- -----------------------------------------
----------------------- ---------------------------------------- --------------------- -----------------------------------------
0 - 3 0** 12 36
4 20 13 38
5 22 14 40
6 24 15 42
7 26 16 44
8 28 17 46
9 30 18 48
10 32 19 and later 50
11 34
*"Replaced premium" the amount of premium on which a first year commission has
previously been paid.
**A commission equal to the renewal rate of the Replacement Policy will be paid
on replaced premium.
================================================================================================================================
3. Commissions on cash values conserved and transferred from the Replaced
Policy into the Replacement Policy will be paid as follows:
o 2.5% of cash value transferred from a non-updated Replaced
Policy.
o 2.5% on cash value transferred from an updated Replaced Policy or
current yield policy.
These commissions will be paid only on cash values deposited as
unscheduled premiums except where a policy loan is carried over from
the Replaced Policy to the Replacement Policy. Where a policy loan is
carried over to a Replacement Policy, we will not pay a commission on
any unscheduled premium deposit created for the purpose of carrying
over the loan.
4. An additional 5% commission will be paid on the amount of replaced
premium if the total premium on the Replacement Policy is at least 25%
greater than the premium of the Replaced Policy.
B. Asset Based Compensation Trails are determined according to the applicable
rates set out in this Exhibit.
C. Commissions will not be paid when partial surrender amounts are used to
fund premium increases or new business.
D. For special situations, defined by the Insurer, involving replacement of
life policies, Insurer reserves the right to further modify commissions
payable on replacements outlined above.
E. Accounting Benefit Rider. Commission rate is reduced to 30% of target
premium if Accounting Benefit Rider ("ABR") is used.
EXHIBIT B - Compensation Schedule
SVUL Broker-Dealer
Supervisory and Service Agreement
Principal Life Insurance Company ("Principal" or "we") will pay commissions on
sales of Policies made pursuant to the Broker-Dealer Marketing and Servicing
Agreement for Variable Life Contracts Agreement (the "Agreement") according to
the schedule below on premiums we receive.
We may, by written notice to you, (1) change this compensation schedule; (2)
discontinue the issuance of any form of Policy; and/or (3) fix the amount of
compensation on Policies issued in exchange for previously issued Policies.
First Year Commissions
c) 50% of premiums we receive up to the planned periodic premium, not to
exceed target premium**.
d) 3% of premium we receive above the lesser of planned periodic or
target premium.
*The target premium is determined according to a rate per $1,000 of
face amount. This rate varies by age and sex of the insured.
Target Premiums (Annual per $1,000 face amount)
APPENDIX B
TARGET PREMIUMS
The target premiums for the Policy are based on the joint equivalent age (JEA)
of the insureds. The JEA takes into account the gender*, age, smoking status and
risk classification of each insured. The calculation is as follows:
1. Start with the unadjusted individual ages of insured #1 and insured #2. Call
this (X1) and (X2) respectively.
2. Take each individual age and adjust for gender.
================= =========================================
IF ..... THEN GENDER ADJUSTMENT IS
----------------- -----------------------------------------
----------------- -----------------------------------------
Male 0
----------------- -----------------------------------------
----------------- -----------------------------------------
Female Minus 5
----------------- -----------------------------------------
----------------- -----------------------------------------
Unisex Minus 2
================= =========================================
3. Take resulting individual ages from step 2 and adjust for smokers if
applicable.
================= =========================================
IF SMOKER THEN SMOKER ADJUSTMENT IS
----------------- -----------------------------------------
----------------- -----------------------------------------
Male Plus 3
----------------- -----------------------------------------
----------------- -----------------------------------------
Female Plus 2
----------------- -----------------------------------------
----------------- -----------------------------------------
Unisex Plus 3
================= =========================================
4. Take resulting individual ages from step 3 and adjust for substandard table
ratings, if any.
================================ ============================== ============================== ==============================
IF TABLE RATING IS..... THEN ADD IF TABLE RATING IS.... THEN ADD
-------------------------------- ------------------------------ ------------------------------ ------------------------------
-------------------------------- ------------------------------ ------------------------------ ------------------------------
A 2 E 10
-------------------------------- ------------------------------ ------------------------------ ------------------------------
-------------------------------- ------------------------------ ------------------------------ ------------------------------
B 4 F 12
-------------------------------- ------------------------------ ------------------------------ ------------------------------
-------------------------------- ------------------------------ ------------------------------ ------------------------------
C 6 H 15
-------------------------------- ------------------------------ ------------------------------ ------------------------------
-------------------------------- ------------------------------ -------------------------------------------------------------
D 8 Table rating higher than H add 16
================================ ============================== =============================================================
5. The result of step 4 is the adjusted individual ages of insured #1 and
insured #2. Call this (X1A) and (X2A) respectively.
6. If (X1A) is greater than 100 then set (X1A) equal to 100.
7. If (X2A) is greater than 100 then set (X2A) equal to 100.
8. Take the difference between (X1A) and (X2A). Call this (XDIFF).
9. Look up (XDIFF) on the table below to find out what to add on to youngest
adjusted age.
================================== =============================== =============================== ================================
XDIFF ADD ON XDIFF ADD ON
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
0 0 35 to 39 11
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
1 to 2 1 40 to 44 12
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
3 to 4 2 45 to 47 13
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
5 to 6 3 48 to 50 14
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
7 to 9 4 51 to 53 15
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
10 to 12 5 54 to 56 16
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
13 to 15 6 57 to 60 17
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
16 to 18 7 61 to 64 18
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
19 to 23 8 65 to 69 19
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
24 to 28 9 70 to 75 20
---------------------------------- ------------------------------- ------------------------------- --------------------------------
---------------------------------- ------------------------------- ------------------------------- --------------------------------
29 to 34 10 76 to 85 21
================================== =============================== =============================== ================================
10. The JEA (Joint Equivalent Age) is equal to the Minimum of (X1A) and (X1B)
plus ADD ON from the table above.
Example:Male Nonsmoker age 45 table rating A, Female Smoker age 57
1. (X1) = 45 and (X2) = 57
2. (X1) = 45 + 0 = 45; and (X2) = 57 - 5 = 52
3. (X1) = 45 + 0 = 45; and (X2) = 52 + 2 = 54
4. (X1) = 45 + 2 = 47; and (X2) = 54 + 0 = 54
5. (XIA) = 47; (X2A) = 54
6. (XIA) is not greater than 100
7. (X2A) is not greater than 100
8. (XDIFF) = (X2A) - (X1A) = 54 - 47 = 7
9. ADD ON = 4
10. JEA = minimum of (XIA) and (X2A) + ADD ON = 47 + 4 = 51
SVUL Target Premium Rates per $1000 of Face
================== =============== =============== =============== =============== =============== =============== ================
JEA TARGET JEA TARGET JEA TARGET JEA TARGET
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
<20 2.78 37 4.79 55 13.68 73 34.08
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
20 2.78 38 4.99 56 14.92 74 35.02
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
21 2.87 39 5.20 57 16.22 75 35.97
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
22 2.95 40 5.41 58 17.58 76 36.95
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
23 3.03 41 5.64 59 18.94 77 37.95
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
24 3.13 42 5.87 60 20.32 78 38.94
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
25 3.22 43 6.11 61 21.67 79 39.96
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
26 3.32 44 6.51 62 22.98 80 40.99
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
27 3.41 45 6.93 63 24.23 81 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
28 3.52 46 7.38 64 25.41 82 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
29 3.62 47 7.86 65 26.52 83 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
30 3.73 48 8.38 66 27.56 84 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
31 3.84 49 8.93 67 28.56 85 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
32 3.96 50 9.50 68 29.53 86 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
33 4.07 51 10.12 69 30.45 87 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
34 4.24 52 10.78 70 31.36 88 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
35 4.42 53 11.49 71 32.27 89 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
36 4.60 54 12.54 72 33.17 90 42.00
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ----------------
>90 42.00
================== =============== =============== =============== =============== =============== =============== ================
* 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.
Service Fees
A service fee of 1% on all premium received beyond the first policy
year is paid as long as the policy remains in effect and this Agreement
remains active.
Compensation for Renewals
A renewal fee of 2% on all premiums received during policy years two
(2) through ten (10) is paid as long as the Policy remains in effect
and this Agreement remains in effect and active. If the previous
servicing agent of record was a Princor registered representative and a
new representative registered with you is appointed to service the
policy, only a 1% service fee will be paid on the existing premium. A
2% renewal commission will be paid to your representative on any
premium increases while they service the Policy in addition to the 1%
service fee.
Compensation on Increases
An "increase" is defined as a face amount increase. We will compare the
increased face amount of the Policy against the highest Policy face
amount over the immediately preceding three year period to determine if
there is a Policy face amount increase during the current year.
A 50% commission will be paid on premium received during the first 12
months following the date of an face amount increase that is greater
than the premium level on which a high [50%] first year commission rate
was previously paid. The maximum premium on which a high [50%] first
year commission rate is paid will be limited to the lesser of total
planned periodic premium or total target premium amount of the policy
after a face amount increase has occurred.
Compensation for Replacement of Life Policies Issued by Principal Life Insurance
Company
A. First year commission is the sum of 1,2, 3 and 4 which follows.
1. A full first year commission rate as set out in First Year Commissions
of the exhibit will be applied to all new policy premium in excess of
the replaced premium but less than the planned periodic, not to exceed
target premium.
2. A percentage of the first year commission rate of the new policy
determined from the table below according to the number of years since
the replaced policy was issued or updated will be applied to the
replaced policy planned periodic premium, not to exceed target
premium. The resulting commission rate in the table shall in no event
exceed the applicable first year commissions rates as set out in the
First Year Commissions section of this exhibit.
================================ ============================= ============================= =============================
YRS SINCE DATE OF ISSUE OR % OF NEW POLICY'S FIRST YRS SINCE DATE OF ISSUE OR % OF NEW POLICY'S FIRST
UPDATE YEAR COMMISSION RATE UPDATE YEAR COMMISSION RATE
PAYABLE ON REPLACED PREMIUM PAYABLE ON REPLACED PREMIUM*
-------------------------------- ----------------------------- ----------------------------- -----------------------------
-------------------------------- ----------------------------- ----------------------------- -----------------------------
0 - 3 0** 12 36
4 20 13 38
5 22 14 40
6 24 15 42
7 26 16 44
8 28 17 46
9 30 18 48
10 32 19 and later 50
11 34
*Replaced premium amounts will be defined as the level of premium on which a
first year commission was previously paid. **A commission equal to the renewal
rate of the new policy will be paid on replaced premium.
==========================================================================================================================
3. Commissions on cash values conserved and transferred into the new
policy will be paid as follows:
o 3% of cash value transferred from a non-Updated policy.
o 1% on cash value transferred from an Updated policy or current
yield policy.
These commissions will be paid on cash values deposited as unscheduled
premiums. However, in situations where a policy loan is carried over
to the new policy, we will not pay a commission on the unscheduled
premium deposit created for the purpose of carrying over the loan.
4. An additional 5% commission will be paid on the amount of policy
premium being replaced if the total premium in the new policy is at
least 25% greater than the premium of the replaced policy.
B. Service fees are determined according to the applicable rates for such as
set out in the exhibit.
C. Commissions will not be paid when partial surrender amounts are used to
fund premium increases or new business.
D. For special situations defined by the Insurer involving replacement of
life policies, the insurer reserves the right to further modify
commissions payable on replacements outlined above.
EXHIBIT C - Compensation Schedule
for PrinFlex(R) Life
(Sold only with the assistance of Executive Benefit Services (EBS(R)))
Principal Life Insurance Company ("Principal" or "we") will pay commissions on
premiums we receive on sales of Policies made pursuant to the Broker-Dealer
Marketing and Servicing Agreement for Variable Life Contracts Agreement (the
"Agreement") according to the schedule below.
We may, by written notice to Broker-Dealer (1) change this compensation
schedule; (2) discontinue the issuance of any form of Policy; and/or (3) fix or
change the amount of compensation on Policies issued in exchange for previously
issued Policies.
First Year Commissions
(a) 50%# of premiums we receive up to the planned periodic premium, but
not to exceed target premium*.
(b) 3% of premiums we receive that exceed the lesser of planned periodic
or target premium.
*The target premium is determined according to a rate per $1,000 of
face amount and varies by age and sex of the insured.
# See Special Underwriting section at the end of this Exhibit.
Target Premiums (Annual per $1,000 face amount)
============ ========== =========== ========== ========== ========== =========== ========== ========== ========== =========== ======
AGE MALE FEMALE UNISEX AGE MALE FEMALE UNISEX AGE MALE FEMALE UNISEX
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
0-10 3.50 2.83 3.41 35 8.66 7.40 8.50 60 32.93 26.06 32.04
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
11 3.65 2.91 3.55 36 9.10 7.76 8.93 61 34.94 27.60 33.99
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
12 3.80 3.00 3.70 37 9.55 8.13 9.37 62 37.10 29.26 36.08
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
13 3.95 3.08 3.84 38 10.03 8.53 9.84 63 39.40 31.06 38.32
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
14 4.10 3.17 3.98 39 10.54 8.94 10.33 64 41.86 32.97 40.70
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
15 4.25 3.25 4.12 40 11.09 9.38 10.87 65 44.48 35.02 43.25
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
16 4.62 3.63 4.49 41 11.66 9.83 11.42 66 47.29 37.21 45.98
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
17 4.99 4.00 4.86 42 12.26 10.32 12.01 67 50.30 39.58 48.91
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
18 5.36 4.38 5.23 43 12.91 10.82 12.64 68 53.52 42.14 52.04
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
19 5.73 4.75 5.60 44 13.59 11.36 13.30 69 56.98 44.93 55.41
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
20 6.10 5.13 5.97 45 14.31 11.93 14.00 70 60.71 47.98 59.06
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
21 6.11 5.16 5.99 46 15.08 12.53 14.75 71 64.73 51.30 62.98
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
22 6.12 5.20 6.00 47 15.90 13.16 15.54 72 69.02 54.93 67.19
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
23 6.13 5.23 6.01 48 16.77 13.83 16.39 73 73.62 58.86 71.70
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
24 6.14 5.27 6.03 49 17.70 14.54 17.29 74 78.48 63.12 76.48
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
25 6.15 5.30 6.04 50 18.68 15.30 18.24 75 83.65 67.71 81.58
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
26 6.29 5.42 6.18 51 19.74 16.10 19.27 76 87.77 71.45 85.65
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
27 6.43 5.54 6.31 52 20.86 16.94 20.35 77 91.89 75.20 89.72
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
28 6.57 5.65 6.45 53 22.05 17.85 21.50 78 96.00 78.94 93.78
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
29 6.71 5.77 6.59 54 23.32 18.80 22.73 79 100.12 82.69 97.85
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
30 6.85 5.89 6.73 55 24.67 19.82 24.04 80 104.24 86.43 101.92
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
31 7.17 6.16 7.04 56 26.11 20.90 25.43 81 113.32 95.74 111.03
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
32 7.51 6.44 7.37 57 27.65 22.05 26.92 82 122.40 105.05 120.14
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
33 7.87 6.74 7.72 58 29.30 23.29 28.52 83 131.48 114.36 129.25
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
34 8.26 7.06 8.10 59 31.05 24.62 30.21 84 140.56 123.67 138.36
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
------------ ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------- ------
85 149.64 132.98 147.47
============ ========== =========== ========== ========== ========== =========== ========== ========== ========== =========== ======
Service Fees
We will pay a service fee of 1% on all premium we receive beyond the first
policy year as long as the Policy remains in effect and this Agreement is
in effect and active.
Compensation for Renewals
A renewal fee of 2% on all premium received beyond the first policy year is
paid as long as the policy remains in effect and this Agreement remains in
effect and active. If the previous servicing agent of record was a Princor
registered representative and a new representative registered with you is
appointed to service the Policy, only a 1% service fee will be paid on the
existing premium. A 2% renewal commission will be paid to your
representative on any premium increases while they service the policy in
addition to the 1% service fee.
Compensation on Increases
An "Increase" is a face amount increase of a Policy. To determine the
amount of an Increase, if any, we compare the increased face amount of a
Policy against the highest policy face amount of that Policy during the
immediately preceding three year period. We will pay a 50%# (#See Special
Underwriting paragraph below) commission on premiums we receive during the
12 months following the Increase, provided that the commission rate is
limited to the lesser of the planned periodic premium for the Increase
amount or the target premium of the Increase amount.
Compensation Where Prinflex Replaces Other Variable Life Policies Issued by
Principal
A. First year commission: We will pay first year commission on a new
Prinflex Policy (the "Replacement Policy") that replaces an existing
Principal Variable Life Policy (the "Replaced Policy") in an amount
that is the sum of 1,2, 3 and 4, below.
1. First year commission at the rate set out in First Year
Commissions of this Exhibit will be applied to Replacement Policy
premiums we receive that exceed the premiums on the Replaced
Policy, not to exceed the lesser of the planned periodic premium
or the target premium for the Replacement Policy.
2. A percentage of the first year commission rate of the Replacement
Policy (as set out in the table below) based on the number of
years since the Replaced Policy was issued or updated* will be
applied to the Replaced Policy planned periodic premium, not to
exceed target premium of the Replaced Policy. The commission paid
according to this paragraph and the table below shall in no event
exceed the applicable first year commissions rates as set out in
the First Year commissions section of this Exhibit.
=============== =========================== ================ =========================== =============== ===========================
Yrs Since Date % of New Policy's 1st Yrs Since Date % of New Policy's 1st Yrs Since % of New Policy's 1st Year
of Issue or Year Comm Rate Payable on of Issue or Year Comm Rate Payable on Date of Issue Comm Rate Payable on
Update Replaced Premium Update Replaced Premium or Update Replaced Premium
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
0 - 3 0** 9 30 15 42
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
4 20 10 32 16 44
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
5 22 11 34 17 46
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
6 24 12 36 18 48
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
7 26 13 38 19 and later 50
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
8 28 14 40
--------------- --------------------------- ---------------- --------------------------- --------------- ---------------------------
------------------------------------------------------------------------------------------------------------------------------------
*Replaced premium amounts defined as the level of premium on which a 1st year commission was previously paid.
**A commission equal to the renewal rate of the new policy will be paid on replaced premium.
====================================================================================================================================
3. Commissions on cash values conserved and transferred from the
Replaced Policy to the Replacement Policy will be paid as
follows:
o 3% of cash value transferred from a non-Updated policy.
o 1% on cash value transferred from an Updated policy or
current yield policy.
These commissions will be paid on cash values deposited as unscheduled premiums.
However, in situations where a policy loan is carried over to the Replacement
Policy, we will not pay a commission on the unscheduled premium deposit created
for the purpose of carrying over the loan.
4. We will pay an additional 5% commission on the amount of Policy
premium being replaced if the total premium in the Replacement
Policy is at least 25% greater than the premium of the Replaced
Policy.
B. Service fees are determined according to the applicable rates for such as
set out in the exhibit.
C. Commissions will not be paid when partial surrender amounts are used to
fund premium increases or new business.
D. For special situations defined by the Insurer involving replacement of life
policies, the Insurer reserves the right to further modify commissions
payable on replacements outlined above.
Special Underwriting. Commission rate is reduced to 45% if Batch underwriting or
Expanded Non-Medical underwriting is used. Commission rate is reduced to 30% if
Guaranteed Issue underwriting is used. Commission rate is reduced to 30% if
Accounting Benefit Rider ("ABR") is used. Commission rate is reduced to 25% when
ABR is used with Guaranteed Issue. Other arrangements may be made with different
compensation amounts.
EXHIBIT D - Expense Reimbursement Schedule
Principal Life Insurance Company ("Principal" or "we") will reimburse the
broker-dealer for expenses incurred by them on sales of Policies made pursuant
to the Broker-Dealer Marketing and Servicing Agreement for Variable Life
Contracts (the "Agreement") according to the schedule below. We may, by written
notice to you, (1) change this compensation schedule; (2) discontinue the
issuance of any form of Policy; and/or (3) fix or change the amount of
compensation on Policies issued in exchange for previously issued Policies.
New York Insurance Department Limitations
The Broker-Dealer and Principal Life agree that the maximum payment under this
Agreement shall be subject to the terms of a plan we submitted to and was
approved by the New York State Insurance Department. The determination of
whether payments exceed the maximum amount permissible shall be solely our
responsibility. Any amounts paid by us to you that are deemed to exceed the
maximum amount permissible shall become a debt from you to us. We reserve the
right to set-off any such indebtedness against any amount payable under this
Agreement or any other contract you have with us or any of our affiliates.
Expense Reimbursement Amounts
We agree to pay you an expense reimbursement allowance on premiums during the
first Policy year as follows:
========================= ==========================================================================================================
PRODUCT REIMBURSEMENT AMOUNT
------------------------- ----------------------------------------------------------------------------------------------------------
------------------------- ----------------------------------------------------------------------------------------------------------
VUL Accumulator 25%# of premiums we receive up to the
planned periodic Premium, but not to exceed target
premium. See Exhibit A for schedule of Target
Premiums.
# Allowance is reduced to 15% if Accounting Benefit
Rider (ABR) is used. Other arrangements may be made
with different compensation amounts.
------------------------- ---------------------------------------------------------------------------------------------------------
------------------------- ---------------------------------------------------------------------------------------------------------
SVUL 25% of premium received up to the planned periodic premium, not to exceed target premium. See
Exhibit B for schedule of Target Premiums.
------------------------- ----------------------------------------------------------------------------------------------------------
------------------------- ----------------------------------------------------------------------------------------------------------
PrinFlex Life(R) 5% of premium we receive up to the planned periodic premium, but not to exceed target premium. See Exhibit
Sold w/ assistance of C for schedule of Target Premiums.
Executive Benefit
Services, Inc. (EBS) # Allowance is reduced to 4.5% if Batch underwriting or Expanded Non-Medical underwriting is used.
Allowance is reduced to 3% if Guaranteed Issue underwriting is used.
Allowance is reduced to 3% if Accounting Benefit Rider
(ABR) is used. Allowance is reduced to 2.5% when ABR
is used with Guaranteed Issue. Other arrangements may
be made with different compensation amounts.
------------------------- ----------------------------------------------------------------------------------------------------------
------------------------- ----------------------------------------------------------------------------------------------------------
Executive VUL 1% of premium we receive up to the target premium. See Exhibit E for schedule of target premiums.
Sold w/assistance of
Executive Benefit
Services, Inc. (EBS)
------------------------- ---------------------------------------------------------------------------------------------------------
------------------------- ----------------------------------------------------------------------------------------------------------
Benefit VUL 5% of premium we receive up to target premium. See Exhibit F for schedule of Target Premiums.
Sold w/ assistance
of Executive Allowance is reduced to 3% if the Accounting Benefit Rider (ABR) is used.
Benefit Services,
Inc. (EBS)
========================= ==========================================================================================================
Executive Benefit Services Assistance
Sales and/or policy administration assistance of EBS may consist of one or more
services, including marketing support, Case Review/Design, Case Management,
Proposals, Financial Analysis, Plan Implementation Support, Underwriting
Coordination, Internet based administration. The determination of when sales are
made subject to the sales and/or policy administration assistance of EBS, shall
be made by Principal in its sole discretion.
EXHIBIT E - Compensation Schedule For Executive VUL
(Sold with the assistance of Executive Benefit Services (EBS(R)))
Principal Life Insurance Company ("Principal" or "we") will pay commissions on
premiums we receive on sales of Policies made pursuant to the Broker-Dealer
Marketing and Servicing Agreement for Variable Life Contracts Agreement (the
"Agreement") according to the schedule below on premiums we receive.
We may, by written notice to Broker-Dealer (1) change this compensation
schedule; (2) discontinue the issuance of any form of Policy; and/or (3) fix or
change the amount of compensation on Policies issued in exchange for previously
issued Policies.
First Year Commissions - Executive VUL
e) 10% of premiums we receive up to the target premium.
f) 1% of premiums we receive in excess of target premium.
The target premium is determined according to a rate per $1,000 of
face amount and varies by age, gender and underwriting classification
of the insured as set out in the following table.
Target Premium Rates* (Annual per $1,000 of Policy Face Amount)
============================================================================================================================
Age: MALE FEMALE UNISEX Age: MALE FEMALE UNISEX
Age: MALE FEMALE UNISEX
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
20 25.19 21.06 24.37 39 46.42 39.62 45.06 58 84.85 72.02 82.18
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
21 25.93 21.76 25.11 40 47.99 40.96 46.58 59 87.45 74.24 84.69
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
22 26.71 22.48 25.87 41 49.60 42.33 48.14 60 90.15 76.56 87.29
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
23 27.51 23.22 26.66 42 51.25 43.73 49.75 61 92.94 78.99 89.98
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
24 28.36 24.00 27.49 43 52.96 45.17 51.40 62 95.82 81.51 92.77
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
25 29.24 24.80 28.36 44 54.70 46.64 53.08 63 98.80 84.13 95.64
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
26 30.18 25.64 29.27 45 56.49 48.15 54.82 64 101.86 86.82 98.59
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
27 31.15 26.50 30.23 46 58.34 49.70 56.60 65 105.01 89.57 101.62
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
28 32.18 27.40 31.22 47 60.23 51.30 58.43 66 108.26 92.39 104.73
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
29 33.24 28.33 32.26 48 62.17 52.95 60.31 67 111.61 95.27 107.94
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
30 34.36 29.29 33.35 49 64.17 54.64 62.25 68 115.10 98.27 111.26
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
31 35.51 30.29 34.47 50 66.23 56.38 64.24 69 118.77 101.42 114.76
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
32 36.72 31.32 35.64 51 68.36 58.16 66.29 70 122.66 104.77 118.46
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
33 37.97 32.39 36.85 52 70.54 60.00 68.40 71 126.79 108.34 122.38
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
34 39.26 33.50 38.11 53 72.79 61.89 70.57 72 131.16 112.16 126.53
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
35 40.60 34.64 39.41 54 75.09 63.81 72.79 73 135.77 116.22 130.91
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
36 41.99 35.83 40.76 55 77.44 65.79 75.05 74 140.58 120.49 135.49
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
37 43.42 37.06 42.15 56 79.85 67.80 77.37 75 145.57 124.96 140.23
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
38 44.90 38.32 43.58 57 82.31 69.88 79.74
============================================================================================================================
*Target premium rates will be higher if the insured is rated at an underwriting
classification other than preferred or standard.
Asset Based Compensation ("Trail Compensation")
We will pay Trail Compensation commencing at the end of the first quarter of
Policy Year Six (6) and every quarter thereafter as long as the Policy remains
in effect and this Agreement is in effect and active. The percentage of Trail
Compensation we will pay is shown in the following table and is based on the Net
Policy Value (NPV) of a Policy.
============== =============================== =============================================================
YEAR TOTAL % NPV ANNUAL TRAIL BREAKDOWN OF NPV ANNUAL TRAIL COMPENSATION
COMPENSATION
-------------- ------------------------------- -------------------------------------------------------------
-------------- ------------------------------- -------------------------------------------------------------
6+ 0.075%* o 0.050%* vested to original selling agent
o 0.025%* non-vested to servicing agent
-------------- ------------------------------- -------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
*One fourth of the annual Trail Compensation is multiplied by the total NPV on
the last day of the policy quarter starting at the end of the 1st quarter in a
Policy's sixth policy year.
============================================================================================================
Compensation for Renewals
We will pay a renewal fee of 5.0% on all premiums we receive up to target
premium and 1.5% of premiums we receive in excess of target premium during
Policy Years two (2) through five (5). We will pay a renewal fee of 1.5% on all
premiums we receive up to target premium and 0% on premiums we receive in excess
of target premium during Policy Years six (6) through ten (10). Renewal
commissions are paid as long as the Policy remains in effect and this Agreement
is in effect and active.
Compensation on Increases
Most underwritten increases in face will result in first year commissions for
premium attributable to the face increase. We allow up to 12 months from the
effective date of an underwritten face increase to pay first year commissions.
Non-underwritten increases in face due to preferred MEC underwriting rules will
not receive first year commissions (i.e. no new target premium is generated). We
will compare the increased face amount of the policy against the highest face
amount over the lifetime to determine if there is a face amount increase during
the current year. If so, a new target premium is based on the face amount
increase above the highest lifetime face amount which may or may not equal the
requested face increase. If the new resulting face amount is less than the
highest face amount over the lifetime, no new target premium is calculated. To
determine first year commissions versus renewals, premiums paid are split in
proportion to the target premium of each face increase.
Compensation Where Executive VUL Replaces Other Variable Life Policies Issued by
Principal Life Insurance Company
A. We will pay first year commission on a new Executive VUL Policy (the
"Replacement Policy") that replaces an existing Principal Variable Life
Policy (the "Replaced Policy") in an amount which is the sum of 1 and 2
below:
1. First year commission at the rate set out in First Year Commissions of
this Exhibit will be applied to Replacement Policy premiums we receive
that exceed the premiums on the Replaced Policy.
2. A percentage of the first year commission rate of the Replacement
Policy (as set out in the table below) based on the number of years
since the Replaced Policy was issued, will be applied to the Replaced
Policy planned periodic premium. The commission rate paid according to
this paragraph and the table below shall in no event exceed the
applicable first year commission rates as set out in the First Year
Commissions section of this Exhibit.
======================= ======================================== ===================== =========================================
YRS SINCE DATE OF % OF REPLACEMENT POLICY'S FIRST YEAR YRS SINCE DATE OF % OF REPLACEMENT POLICY'S
ISSUE OR UPDATE OF COMMISSION RATE PAYABLE ON REPLACED ISSUE OR UPDATE OF FIRST YEAR COMMISSION RATE PAYABLE ON
REPLACED POLICY PREMIUM* REPLACED POLICY REPLACED PREMIUM*
----------------------- ---------------------------------------- --------------------- -----------------------------------------
----------------------- ---------------------------------------- --------------------- -----------------------------------------
0 - 3 0** 12 36
4 20 13 38
5 22 14 40
6 24 15 42
7 26 16 44
8 28 17 46
9 30 18 48
10 32 19 and later 50
11 34
*"Replaced premium" is the amount of planned periodic premium on the replaced
policy.
**A commission equal to the renewal rate of the Replacement Policy will be paid
on replaced premium.
================================================================================================================================
B. Asset Based Compensation Trails are determined according to the applicable
rates set out in this Exhibit.
C. Commissions will not be paid when partial surrender amounts are used to
fund premium increases or new business.
D. For special situations, defined by the Insurer, involving replacement of
life policies, Insurer reserves the right to further modify commissions
payable on replacements outlined above.
Commission Charge-back
A five-year commission charge-back as stated in the table below is applicable if
the policy lapses, is surrendered or terminates (other than death) in the first
five Policy Years.
================ =============================
Policy Year Percent of First Year
Commission Paid
---------------- -----------------------------
---------------- -----------------------------
1 100
---------------- -----------------------------
---------------- -----------------------------
2 80
---------------- -----------------------------
---------------- -----------------------------
3 60
---------------- -----------------------------
---------------- -----------------------------
4 40
---------------- -----------------------------
---------------- -----------------------------
5 20
================ =============================
EXHIBIT F - Compensation Schedule
For Benefit VUL
(Sold only with the assistance of Executive Benefit Services (EBS(R)))
Principal Life Insurance Company ("Principal" or "we") will pay commissions on
premiums we receive on sales of Policies made pursuant to the Broker-Dealer
Marketing and Service Agreement for Variable Life Contracts Agreement (the
"Agreement") according to the schedule below.
We may, by written notice to the Broker-Dealer (1) change this compensation
schedule; (2) discontinue the issuance of any form of Policy; and/or (3) fix or
change the amount of compensation on Policies issued in exchange for previously
issued Policies.
First Year Commissions
g) 50%# of premium received up to target premium*.
h) 3% of premium received above target premium.
*The target premium is determined according to a rate per $1,000 of
face amount and varies by age and gender of the insured. The target
premium will be higher if the insured's underwriting class is less than
standard.
# See Special Underwriting section at the end of this Exhibit.
Target Premiums (Annual per $1,000 face amount)
========= ======= ========== ========= ======= ======== ========== ========== ======= ========= ========== ===========
Age Male Female Unisex Age Male Female Unisex Age Male Female Unisex
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
0 3.50 2.83 3.41 29 6.71 5.77 6.59 58 29.30 23.29 28.52
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
1 3.50 2.83 3.41 30 6.85 5.89 6.73 59 31.05 24.62 30.21
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
2 3.50 2.83 3.41 31 7.17 6.16 7.04 60 32.93 26.06 32.04
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
3 3.50 2.83 3.41 32 7.51 6.44 7.37 61 34.94 27.60 33.99
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
4 3.50 2.83 3.41 33 7.87 6.74 7.72 62 37.10 29.26 36.08
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
5 3.50 2.83 3.41 34 8.26 7.06 8.10 63 39.40 31.06 38.32
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
6 3.50 2.83 3.41 35 8.66 7.40 8.50 64 41.86 32.97 40.70
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
7 3.50 2.83 3.41 36 9.10 7.76 8.93 65 44.48 35.02 43.25
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
8 3.50 2.83 3.41 37 9.55 8.13 9.37 66 47.29 37.21 45.98
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
9 3.50 2.83 3.41 38 10.03 8.53 9.84 67 50.30 39.58 48.91
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
10 3.50 2.83 3.41 39 10.54 8.94 10.33 68 53.52 42.14 52.04
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
11 3.65 2.91 3.55 40 11.09 9.38 10.87 69 56.98 44.93 55.41
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
12 3.80 3.00 3.70 41 11.66 9.83 11.42 70 60.71 47.98 59.06
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
13 3.95 3.08 3.84 42 12.26 10.32 12.01 71 64.73 51.30 62.98
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
14 4.10 3.17 3.98 43 12.91 10.82 12.64 72 69.02 54.93 67.19
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
15 4.25 3.25 4.12 44 13.59 11.36 13.30 73 73.62 58.86 71.70
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
16 4.62 3.63 4.49 45 14.31 11.93 14.00 74 78.48 63.12 76.48
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
17 4.99 4.00 4.86 46 15.08 12.53 14.75 75 83.65 67.71 81.58
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
18 5.36 4.38 5.23 47 15.90 13.16 15.54 76 87.77 71.45 85.65
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
19 5.73 4.75 5.60 48 16.77 13.83 16.39 77 91.89 75.20 89.72
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
20 6.10 5.13 5.97 49 17.70 14.54 17.29 78 96.00 78.94 93.78
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
21 6.11 5.16 5.99 50 18.68 15.30 18.24 79 100.12 82.69 97.85
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
22 6.12 5.20 6.00 51 19.74 16.10 19.27 80 104.24 86.43 101.92
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
23 6.13 5.23 6.01 52 20.86 16.94 20.35 81 113.32 95.74 111.03
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
24 6.14 5.27 6.03 53 22.05 17.85 21.50 82 122.40 105.05 120.14
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
25 6.15 5.30 6.04 54 23.32 18.80 22.73 83 131.48 114.36 129.25
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
26 6.29 5.42 6.18 55 24.67 19.82 24.04 84 140.56 123.67 138.36
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
27 6.43 5.54 6.31 56 26.11 20.90 25.43 85 149.64 132.98 147.47
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
--------- ------- ---------- --------- ------- -------- ---------- ---------- ------- --------- ---------- -----------
28 6.57 5.65 6.45 57 27.65 22.05 26.92
========= ======= ========== ========= ======= ======== ========== ========== ======= ========= ========== ===========
Service Fees
We will pay a service fee of .5% on all premium received beyond the
first policy year to the agent of record as long as the Policy remains
in effect and this Agreement is in effect and active.
Compensation for Renewals
A renewal fee of 2% on all premium received beyond the first policy
year is paid as long as the policy remains in effect and this
Agreement remains in effect and active.
A 2% renewal commission will be paid to your representative on any
future premium increases.
Compensation on Increases
Most underwritten increases in face will result in first year
commissions for premium attributable to the face increase. We allow up
to 12 months from the effective date of an underwritten face increase
to pay first year commissions. Non-underwritten increases in face due
to preferred MEC underwriting rules will not receive first year
commissions (i.e. no new target premium is generated). We will compare
the increased face amount of the policy against the highest face amount
over the lifetime to determine if there is a face amount increase
during the current year. If so, a new target premium is based on the
face amount increase above the highest lifetime face amount which may
or may not equal the requested face increase. If the new resulting face
amount is less than the highest face amount over the lifetime, no new
target premium is calculated. To determine first year commissions
versus renewals, premiums paid are split in proportion to the target
premium of each face increase
Compensation Where Benefit VUL Replaces Other Variable Life Policies Issued by
Principal Life Insurance Company
A. We will pay first year commission on a new Benefit VUL Policy (the
"Replacement Policy") that replaces an existing Principal Variable Life
Policy (the "Replaced Policy") in an amount which is the sum of 1 and 2
below:
3. First year commission at the rate set out in First Year Commissions of
this Exhibit will be applied to Replacement Policy premiums we receive
that exceed the premiums on the Replaced Policy.
4. A percentage of the first year commission rate of the Replacement
Policy (as set out in the table below) based on the number of years
since the Replaced Policy was issued, will be applied to the Replaced
Policy planned periodic premium. The commission rate paid according to
this paragraph and the table below shall in no event exceed the
applicable first year commission rates as set out in the First Year
Commissions section of this Exhibit.
======================= ======================================== ===================== =========================================
YRS SINCE DATE OF % OF REPLACEMENT POLICY'S FIRST YEAR YRS SINCE DATE OF % OF REPLACEMENT POLICY'S
ISSUE OR UPDATE OF COMMISSION RATE PAYABLE ON REPLACED ISSUE OR UPDATE OF FIRST YEAR COMMISSION RATE PAYABLE ON
REPLACED POLICY PREMIUM* REPLACED POLICY REPLACED PREMIUM*
----------------------- ---------------------------------------- --------------------- -----------------------------------------
----------------------- ---------------------------------------- --------------------- -----------------------------------------
0 - 3 0** 12 36
4 20 13 38
5 22 14 40
6 24 15 42
7 26 16 44
8 28 17 46
9 30 18 48
10 32 19 and later 50
11 34
*"Replaced premium" is the amount of planned periodic premium on the replaced
policy.
**A commission equal to the renewal rate of the Replacement Policy will be paid
on replaced premium.
================================================================================================================================
E. Service fees are determined according to the applicable rates for such as
set out in the exhibit.
F. Commissions will not be paid when partial surrender amounts are used to
fund premium increases or new business.
G. For special situations defined by the Insurer involving replacement of
life policies, the Insurer reserves the right to further modify
commissions payable on replacements outlined above.
H. Special Underwriting. Commission rate is reduced to 30% if the Accounting
Benefit Rider ("ABR") is used. Other arrangements may be made with
different compensation amounts.
Commission Charge-back (only applicable if the Accounting Benefit Rider is
present)
A five-year commission charge-back as stated in the table below is applicable if
the policy lapses, is surrendered or terminates (other than death) in the first
five Policy Years.
================ =============================
Policy Year Percent of First Year
Commission Paid
---------------- -----------------------------
---------------- -----------------------------
1 100
---------------- -----------------------------
---------------- -----------------------------
2 80
---------------- -----------------------------
---------------- -----------------------------
3 60
---------------- -----------------------------
---------------- -----------------------------
4 40
---------------- -----------------------------
---------------- -----------------------------
5 20
================ =============================
