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Principal disability insurance review 2020

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This insurer offers long-term disability with up to $20,000 coverage for high-income earners.

finder.com’s rating: 4.0 / 5.0

★★★★★

  • Consider Principal if… You want to take advantage of a range of features many companies charge for.
  • Look elsewhere if… You need short-term disability, or would like to apply for coverage online.

Yes

Short term disability

No

Long term disability

Details

Benefit period Up to ages 65, 67, or 70, or 2 or 5 years
Waiting period 30, 60, 90, 180 or 365 days
Coverage amount $400 to $20,000
Individual credit
Available states Certain policies may not be available in New York
Policy riders No info available
Simplified issue No

Pros

  • High long-term disability maximums
  • Available for part-time workers

Cons

  • No online quotes
  • Lack of product info on its website

Expert review

Katia Iervasi

Review by


Katia Iervasi is a staff writer who hails from Australia and now calls New York home. Her writing and analysis has been featured on sites like Forbes, Best Company and Financial Advisor around the world. Armed with a BA in Communication and a journalistic eye for detail, she navigates insurance and finance topics for Finder, so you can splash your cash smartly (and be a pro when the subject pops up at dinner parties).

Expert review

Disability insurance is a backup plan — and Principal’s offering is solid. It’s built a range of added-value features into its policies, and high earners can potentially score monthly benefits of up to $20,000. But if you’re looking for short-term insurance or would like to sail through an online application, compare disability insurance providers.

Built-in benefits and policy riders available

Benefits

  • Non-cancelable and guaranteed-renewable. As long as you pay your premiums, Principal can’t change or cancel your policy up to age 65.
  • Waiver of premium. If you lose your sight, hearing, speech, hands or feet, Principal will waive your premiums while you’re on claim.
  • Capital sum benefit rider. If you lose your sight in one eye, or the use of one hand or foot, you’ll receive an additional lump sum benefit.
  • Transplant surgery benefit. Pays a benefit if you’re disabled as a result of a transplant.
  • Benefit update rider. Thanks to this rider, the policy allows you to top up your coverage every three years (up to age 55) without providing evidence of insurability.
  • Presumptive disability benefit rider. Pays out a benefit if you lose your sight, hearing, speech or both hands or feet — even if you’re still able to work.
  • Supplemental health benefit. With this benefit, the insurer will cover some of the costs if you’re disabled due to a critical illness.
  • Serious illness benefit. Provides a one-time lump sum equal to six times the monthly benefit if you’re diagnosed with cancer or stroke, or need coronary artery bypass surgery.
  • Cost-of-living adjustment (COLA) rider. When you return to work full-time, you can pay a higher premium to keep your increased disability benefits. It’s capped at 3% or 6%.

Riders

  • Residual disability rider. This pays the residual monthly benefit if you’re disabled and can’t work full-time in your occupation, and the waiting period has passed. It applies if you’ve lost at least 20% of your income.
  • Future benefit increase rider. Automatically increases the monthly benefit for the first six months, unless you decline.
  • Catastrophic disability benefit. If you’re cognitively impaired and can’t perform two of the six “activities for daily living” (ADLs), this rider will give you the funds to hire help.
  • Rehabilitation benefit. Pays out an extra benefit if you participate in a rehabilitation program.
  • Regular occupation rider This rider allows you to change the definition of disability to “true own occupation,” which means you’ll receive benefits if you become disabled and cannot perform your own, specialized job.
  • Retirement savings protection rider. If you add this to your plan, the insurer will continue to contribute to your retirement savings when you’re unable to work due to disability.

Pros and cons of Principal disability insurance

Pros

  • High long-term disability maximums. Principal offers long term disability plans that can pay up to $20,000 if you’re a high income earner, that’s higher that many of its competitors.
  • Available for part-time workers. This insurer allows coverage for people working at least 20 hours, some insurers have a much more strict guideline that requires more hours to be approved for coverage.

Cons

  • No online quotes. If you want to see what your rates might look like, you’ll have to forgo a simple online process and instead speak to an agent.
  • Lack of product info on its website. We had a hard time finding any specifics about which coverage options and riders are available to customers.

Principal disability insurance reviews and complaints

Principal is accredited with the Better Business Bureau, and has an A+ rating for its customer interaction, as of October 2020. The BBB has recorded 116 reviews over the past three years, which is a pretty low number given the size of the company. Customers awarded Principal one out of five stars, though none of the reviews touched on disability insurance.

On TrustPilot, Principal earned 1.5 of five stars.

Principal’s financial strength

It’s crucial to choose a financially strong insurer because you may not make a claim for years. An insurance giant, Principal has earned top-tier ratings from the four major agencies and has $696.2 billion in assets under management. In short, it has the cash reserves to pay out claims.

Agency Rating
AM Best A+ (Superior)
Moody’s A1 (Good)
Standard & Poor’s A+ (Strong)
Fitch AA- (Very strong)
J.D. Power N/A

Compare alternatives to Principal

Data indicated here is updated regularly
Name Product Coverage Amount Benefit period Waiting period Own Occupation Medical exam required
Prudential disability insurance
Short-term: $100–$3,000
Long-term: $300–$6,000
Short-term: 3, 6 or 12 months
Long-term: Up to ages 65, 67, or 70, or 2 or 5 years
Short-term: 30, 60 or 90 days
Long-term: 90, 180 or 365 days
No
Yes
MassMutual disability insurance
Not listed
2, 5 or 10 years or up to age 65, 67 or 70
60, 90, 180, 365 or 730 days
Yes
Yes
Guardian disability insurance
$500 to $20,000
2, 5 and 10 years to age 65, 67 and 70
30, 60, 90, 180, 365 or 720 days
Yes
Yes
Principal disability insurance
$400 to $20,000
Up to ages 65, 67, or 70, or 2 or 5 years
30, 60, 90, 180 or 365 days
No info available
Yes
Mutual of Omaha disability insurance
Simplified issue: $300–$4,000
Short-term: $300–$5,000
Long-term: $300– $20,000
Simplified issue: 12, 24 or 36 months
Short-term: 3, 6, 12 or 24 months
Long-term: 2, 5, or 10 years, or to age 65 or 67
Simplified issue: 30 days (injury) or 90 days (sickness)
Short-term: 0 (accident), 7, 14, 30, 60 or 90 days
Long-term: 60, 90, 180 or 365 days
No info available
No
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How do I sign up for Principal’s disability insurance?

You can start the process online, but you’ll eventually need to talk to a Principal rep directly. These are the steps:

  1. Go to the Principal website. On the top navigation bar, hover over Individuals, and click Insure > Disability Income Insurance.
  2. If you want to speak to someone right away, call 800-247-9988. Otherwise, click Get Started.
  3. This will take you to the online calculator. To get an idea of how much you’ll pay for disability insurance, enter your income, estimated monthly expenses, age, gender, and state. Indicate whether your job involves a high, moderate or low level of physical work.
  4. Choose the coverage option that suits you.
  5. Decide how you’d like to proceed. You can:
  6. Chat to a rep by calling 800-247-8000, ext. 2523.
  7. Schedule a call by leaving your name, number and availability.
  8. Meet with a financial advisor. Type in your contact details, and Principal will connect you with an adviser in your area.

More about Principal

Founded in 1879, Principal began offering insurance before branching out to sell a range of investment and retirement planning products. Fast forward to today, and the company has Fortune 500 status and offices across the globe.

Along with making its mark in the financial services, Principal is committed to giving back to the community. The organization often sponsors events and programs in its hometown of Des Moines, Iowa, and it gives its employees time off to volunteer.

Frequently asked questions

Disability insurance ratings

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Our experts analyze disability insurance companies to help you find the best income protection policy for you.

We assess each company’s financial strength and customer satisfaction, as well as policy features, benefit and elimination periods and available riders. We then give each insurer a score between one and five stars that reflects available options and industry reputation.

Learn the details of our methodology and scoring.

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