Principal Lifetime Income Solutions II Variable Annuity review

Yes, for the right buyer. This is a good annuity for someone who wants a guaranteed paycheck for life from a variable annuity chassis, values having a choice between different accumulation approaches before income starts, and is comfortable paying for that guarantee through a required GLWB rider. It is less appealing for someone who mainly wants accumulation potential without an income focus, anyone who dislikes layered fee structures, or buyers who want the broadest possible subaccount menu.

The main reason to buy Principal Lifetime Income Solutions II is protected lifetime income with market exposure. You get to invest in subaccounts during the accumulation phase, which means the account value can grow — or shrink — with the market. At the same time, the GLWB rider protects a separate benefit base that grows either through market step-ups or a guaranteed rollup, depending on the rider you choose. That benefit base is what determines your future income, regardless of what the market does to the account value.

I think this annuity is best for someone in the 50s or early 60s who wants future lifetime income, is willing to stay invested in the market during the deferral period, and wants to choose from more than one approach to growing their guaranteed income base. It works particularly well for someone who has a longer deferral window and can let a rollup accumulate. It is less attractive for someone who wants simple accumulation, expects to need frequent access to principal above the free amount, or wants to keep total fees low.

You are buying a guaranteed future income stream built on top of a variable investment account. The income does not depend on your account value reaching a specific level — it depends on your withdrawal benefit base, which is a separate tracked value that grows by the rules of whichever rider you chose. If the market cooperates, your account value could step up the benefit base. If the market underperforms, a rollup rider can still grow the benefit base by a guaranteed percentage each year. Either way, when you decide to take income, your lifetime withdrawal percentage is locked in based on your age at that time and applied to the benefit base — not the account value.

The contract requires one of three GLWB riders at purchase. Here is how they differ.

**Target Income Protector XVII** is the most aggressive accumulation option. It guarantees a 7% simple rollup on the benefit base for up to 15 years, as long as no withdrawals are taken. Rider fee is 1.55% of the benefit base annually. For a 65-year-old starting income in years 1 through 5, the single-life withdrawal rate is 5.95%. Starting in year 6 or later, that increases to 6.90% single-life. This is the right pick for someone with a long deferral window who wants the strongest income guarantee and is willing to pay a higher fee for it.

**Flexible Income Protector XIII** skips the rollup entirely and relies on annual market step-ups to grow the benefit base. It is the lowest-cost rider at 1.25% of benefit base. For a 65-year-old, the single-life withdrawal rate is 5.75% (years 1–5) or higher for longer deferrals. This is the right pick for someone who expects reasonable market performance and wants a lower fee, accepting that the benefit base will not grow if markets do not cooperate.

**Flexible Income Protector Plus XVIII** sits between the two. It guarantees a 5% simple rollup for 7 years with a bonus structure that escalates each year (from 5% in year 1 up to 10% in years 5 through 7). Rider fee is 1.35%. A 65-year-old receives 5.95% single-life in years 1–5, or 6.90% in years 6+. This works well for someone with a 7–10 year deferral who wants some guaranteed growth protection without the maximum fee.

All three riders allow annual market step-ups that lock in gains permanently when account value exceeds the benefit base. Joint-life elections are available any time before income begins, based on the younger life's age at first withdrawal. Riders can be canceled after the fifth anniversary.

The most meaningful secondary feature is the subaccount lineup, especially the buffer series. The Flexible Income Protector Plus rider gives access to PVC U.S. LargeCap Buffer accounts (January, April, July, October series). These are defined-outcome subaccounts that provide a 10% annual buffer against S&P 500 losses. For the first 10% of index gain, participation is 100%; above that threshold, a lower tiered rate applies (currently 63–71% depending on the series). That is a meaningful option for a buyer who wants some market upside with downside cushion built into the investment itself, layered underneath the income guarantee.

The traditional diversified funds — Diversified Income, Balanced, and Growth, plus adaptive and strategic allocation variants — are straightforward, low-cost fund-of-funds built from indexed sub-components. Subaccount net expense ratios run 0.48% to 1.00%, with the buffer accounts at the higher end.

The surrender schedule runs 7 years: 6%, 6%, 6%, 5%, 4%, 3%, 2%, then 0%. The free-withdrawal amount each year is the greatest of earnings, 10% of premium payments less prior withdrawals since the last anniversary, or the RMD amount for qualified contracts. The RMD program is structured so that required distributions do not count as excess withdrawals under the rider, which is a genuine convenience for buyers using qualified money.

Surrender charge waivers are included automatically at no extra charge for terminal illness, disability, and hospital confinement. Any withdrawal above the allowed amount counts as an excess withdrawal under the GLWB, reducing the benefit base by the greater of a dollar-for-dollar or pro-rata reduction — a meaningful risk if you need to access more than your guaranteed amount before income starts.

The fee structure is layered and worth adding up carefully.

The base contract charges a 1.25% annual M&E risk charge plus a 0.15% administration charge, totaling 1.40% before any subaccount expenses. Add the annual contract fee — lesser of $30 or 2% of account value, waived above $30,000 — plus the required GLWB rider fee of 1.25% to 1.55% of the benefit base, plus subaccount net expenses of 0.48% to 1.00%. In a typical scenario, total annual fees easily reach 3% or more.

That fee stack is the main tradeoff. The income guarantee has real value, but the account value paying for it is being reduced by significant annual charges. Someone who does not end up needing the lifetime income feature will have paid a high cost for an option they did not use. This is not a criticism unique to Principal — it is the nature of income VA products generally — but it is the most important thing to understand before buying.

Principal Lifetime Income Solutions II is issued by Principal Life Insurance Company, a subsidiary of Principal Financial Group, based in Des Moines, Iowa. Principal Life carries an A+ rating from both A.M. Best and Standard and Poor's as cited in the product materials, reflecting strong financial strength. Principal Financial Group is a large, publicly traded financial services company with broad retirement and insurance operations.