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Washington, D.C. (Oct. 15, 2007) – ELM Income Group, Inc., a Washington D.C. based independent insurance agency, today announced new provisions for its ELM Income Annuity, a single premium immediate fixed annuity contract, issued by Principal Life Insurance Company. The contract is intended for retirees, who desire guaranteed income for life, or a shorter period of time, starting within one year of premium payment. It responds to market research among large employers and policy makers identifying the ideal fixed annuity products. The innovative, new provisions to the ELM Income Annuity are an insulated separate account, which provide a safeguard for each contract’s premium and earnings, and a simplified range of death benefits, that allow customers to easily understand and control those benefits. ELM’s product development process, involving product review of 13 major insurance companies, found that the insulated separate account feature is rarely seen in individual fixed income annuity contracts, although common in group contracts. The new provisions on death benefits are unique and subject to a pending patent application. All guarantees and protections in the ELM Income Annuity are provided by and subject to the claims paying ability of Principal Life. These new provisions complete ELM’s response to market research conducted among benefits professional at large employers, research organizations and trade associations. The enhancements that most interested those surveyed included better pricing, inflation protection, simpler design and enhanced security. They also wanted a lower-cost, no-hassle, sales and education process. The competitiveness of the ELM Income Annuity has already been enhanced by lower commissions, which increase the amount available for benefits, as well as an uncapped inflation rider option. With the newest provisions in place, the ELM Income Annuity is establishing a benchmark in the industry for innovative fixed income annuity products. Details on the new provisions include: 1.) An insulated separate account – The premium for the contract and the earnings on the premium are held in a ‘separate account’ by the Principal Life Insurance Company, the insurer that issues the annuity contract, and are unavailable to the insurer’s other policy holders or creditors until the benefits of all ELM Income Annuities in the separate account are fully funded. In addition, under the terms of the ELM contract, the insurer’s general account must supplement the separate account to pay benefits, if necessary. This provides more assurance that no matter what corporate, regulatory or industry changes occur in the future, a customer’s benefit will be better protected. This provision is available in most, but not all, states. 2.) New death benefits – Most fixed income annuities already offer the option of benefits after the death of all annuitants. However, these benefits and their provisions can be difficult for the consumer to understand. In contrast, the new ELM decreasing return of premium benefit feature makes the decision process on death benefits manageable for the consumer. Customers decide from the outset what percentage of the premium should be returned in the event of death (between zero and 100 percent) and whether that amount should decrease by 5 or 10 percent per year. (For example, if an applicant paid a $100,000 premium and elected a 100 percent return of premium, decreasing by 10 percent per year, the death benefit would be $90,000 at the end of the first year, $80,000 at the end of the second year, and so on.) In addition to its simplicity, the new death benefit design may be used to insure that the combination of income benefits and death benefits paid always exceed the premium charged for the annuity contract. “Until now, the general retiree public was unable to purchase fixed income annuities with these features,” said Chris O’Flinn, president and CEO of ELM Income Group. “Our ELM Income Annuity is unique in the industry and will set a new benchmark for innovative fixed income annuity products.” In addition to these new features, the ELM Income Annuity has a one-time commission fee of 0.50 percent (50 basis points). This helps to lower the amount of fees in the contract which in turn increases the amount available for benefits. This is of particular interest to employers who wish to make their retirees and near-retirees aware of efficient fixed annuity contracts, without the ongoing fiduciary burdens of an “institutional” annuity program. “We designed the ELM Income Annuity for employers who want to raise awareness of a fixed annuity product among their employees and retirees. The ELM Income Annuity is available to the public but it’s very competitive with institutional products,” explained O’Flinn. “We encourage employers to compare our offering against any other fixed annuity product in the market. The ELM website, www.elmannuity.com, which is written in plain, easy to understand language, describes the product in detail and summarizes important information and research about retirement income planning. A toll-free telephone number is provided that links the purchaser directly to the insurer’s salaried customer service department, which is able to answer questions, help potential customers determine if the product is right for them, and facilitate the purchase of the annuity. ELM Income Group, Inc., based in Washington, D.C., is an independent insurance agency that offers annuity products online at www.elmannuity.com. ELM was founded by two former officers of large corporations, each with an extensive background in benefits and applied actuarial science. ELM helps retirees achieve a secure financial foundation by increasing their ownership of annuities. ELM Income Group, Inc. is not affiliated with any company of the Principal Financial Group. The ELM Income Annuity is issued by Principal Life Insurance Company, a member of the Principal Financial Group®, Des Moines, IA 50392. The Principal Financial Group (The Principal) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $282.1 billion in assets under management and serves some 18.1 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com. (Financial data as of June 30, 2007.) CONTACT:
Maggie Schmerin
202.274.4768
mschmerin@hellermanbaretz.com
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