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Principal Financial life insurance review 2020

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This major insurer offers competitive rates and fast-tracked underwriting for healthy applicants.

finder.com's rating: 4.5 / 5

★★★★★

  • Get a quote if you want easy online quoting with approval in 48 hours.
  • Pick something else if you want whole life or online claims.

20 to 70

Issue Age

$200,000 to $5,000,000

Coverage

Yes

Medical Exam Required

Details

Free quote Online, Phone
Policy options Term, universal, survivorship
Term lengths 10, 15, 20, or 30 years
Monthly cost Not listed
Claim methods Mail, Email
Available states All 50 states
Customer support Phone, Online
Riders Accelerated death benefit rider, Child rider, Cost-of-living rider, Critical illness benefit rider, Guaranteed insurability rider, Policy split option rider, Waiver-of-premium rider

Expert review

Julia Cameron

Review by


Julia Cameron is a writer and editor who has experience in finance, mergers and acquisitions, content marketing and immigration law. She has a passion for interior design and an affinity for Old Florida, where she lives with her family.

Expert review

Principal Financial stands out for its lineup of term and universal policies, plus its fast-tracked underwriting, which allows healthy applicants to skip the medical exam and get coverage faster.

But it doesn’t offer whole life insurance, and the online portal isn’t as sophisticated as some of its competitors.

What types of life insurance coverage does Principal Financial offer?

Principal’s lineup includes a mix of term and permanent policies:

  • Term life. Available in 1-, 10-, 15-, 20- or 30-year terms, this policy comes with fixed premiums and pays out a guaranteed death benefit if you die during the term. The insurer offers up to $1 million in coverage for applicants aged 18 to 60 who don’t want to take a medical exam.
  • Universal life. This permanent policy offers lifelong coverage and builds cash value over time according to market conditions. It also gives policyholders the flexibility to change their premiums and death benefits as needed.
  • Indexed universal life. With this permanent policy, the cash value is tied to the performance of an index, like the S&P 500, which may accelerate its growth.
  • Variable universal life. Like universal life, the policy offers flexibility, but the cash value is invested differently, and more aggressively. The investment is professionally managed to boost your returns, but it’s subject to the ups and downs of the market. Principal offers this type of coverage by prospectus only.
  • Survivorship. Designed for seniors 55 to 80 years old, this joint policy covers two people, and pays out after both spouses die. This policy offers the option to add a four-year term insurance rider that pays a death benefit equal to 122% of the base policy if both people die within the first four years of owning the policy.

What riders and add-ons does Principal offer?

Depending on your policy, you may be able to customize your coverage with these riders:

  • Accelerated death benefit rider. Allows you to access up to 75% of the death benefit — up to $1 million — if you’re diagnosed with a terminal illness.
  • Child rider. Lets you add eligible children to a policy, with coverage between $5,000 and $25,000.
  • Waiver-of-premium rider. Waives your premium payment if you become completely disabled.
  • Cost-of-living rider. To keep up with inflation, this allows you to increase your insurance coverage with no additional underwriting.
  • Policy split option rider. Split coverage into two individual policies of equal amounts in the event of divorce or major tax changes.
  • Overloan lapse protection. After meeting criteria, this rider allows you to take out loans and withdrawals knowing your policy won’t lapse.
  • Extended coverage. Extends your coverage — and the full death benefit — to the date of your death if you live beyond age 121.
  • Hazardous sports exclusion. Available in most states, this rider covers activities like motorbike riding and hang gliding so they don’t dramatically affect your rate class.
  • Aviation exclusion. Underwriting considers you for a better rate even if you fly an aircraft.

How much does Principal life insurance cost?

We pulled sample rates using Principal’s quote tool for a 20-year term, $500,000 policy for a healthy man and woman. Principal’s rates are on the cheaper end compared to its competitors.

AgeManWoman
20$36$30
25$20$17
30$20$17
35$21$18
40$29$25
45$91$69
50$72$56
55$116$85
60$204$145

What factors affect my rates with Principal?

The price of your life insurance policy is determined by factors like your age, health, occupation and lifestyle. Principal has a three-prong approach to underwriting, sourcing data from the DMV, Medical Information Bureau, and Prescription Database.

Its Super Preferred and Preferred rates consider:

  • Tobacco use. For the preferred rate, you have to prove you haven’t smoked within the past 24 months.
  • Age. Young, healthy applicants can usually access cheaper policies.
  • Driving record. You must have a five-year history free of DUIs and reckless driving. The company allows a maximum of two tickets in the past three years for minor violations.
  • Occupation. Those with dangerous jobs may be subject to higher rates.
  • Prescription history. Unless your prescription history is significant, this shouldn’t affect your rate class.
  • Health. Principal is liberal when it comes to build charts, cholesterol, blood pressure and family history with the exception of death from cardiovascular disease, stroke or diabetes before age 60. If you’ve had recent weight loss, you could get better rates, however major medical conditions, such as Parkinson’s, cancer or heart disease, will prompt further assessment.
  • Healthy lifestyle credits (HLCs). This program allocates credits that could boost your rating class.
  • Prior insurance policies. If you earned a Preferred/Super Preferred rating for your previous life insurance coverage, this is a bonus.
  • Bankruptcy and criminal history. Principal checks your record to see if you’ve had a felony conviction in the last 10 years or been bankrupt in the past five years.

Do I have to take a medical exam?

Principal offers an accelerated underwriting program for all life insurance products up to $1 million and waives the medical exam. To qualify, complete an electronic application and then do a phone interview with a financial representative, who will collect and review your personal and medical history.

You’ll likely know within 48 hours if you pass this phase and are approved for life insurance without needing a medical exam. At the time of writing, roughly 50% of applicants in good health were approved.

Pros and cons of Principal Financial

Pros

  • User-friendly online portal. Manage your account and make policy payments online. However, canceling your policy or changing beneficiaries can only be done by phone or mail.
  • Quick approval process. While the industry average is 30+ days, Principal often approves no-medical applicants in 48 hours, and others in 15 days or less.
  • Principal TeleApp. Use this service to schedule a brief phone interview to complete the request for your personal history.
  • Financially strong. High ratings from AM Best, Moody’s, Fitch, and Standard & Poor mean Principal has the cash reserves to pay out claims.

Cons

  • No online claims. Your beneficiaries can only file a life insurance claim by phone, unlike most of its competitors who offer online claims filing.
  • Policy delivered by mail. This may be a deterrent for the tech-savvy and those who move around a lot.
  • No whole life policies available. Permanent policies only include universal, variable universal and survivorship.
  • Lack of policy details listed on website. Principal’s website lacks detailed policy information including, riders, issue ages and coverage maximums. If you want additional policy info, you’ll have to call an agent near you.

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Principal Financial reviews and complaints

Principal has been accredited with the Better Business Bureau (BBB) since 1948 and has an A+ rating. The BBB has recorded just 109 complaints in the past three years, which is low for a company of its size.

In J.D. Power’s 2019 U.S. Life Insurance Study, Principal ranked fourth of 25 insurers surveyed. It was deemed “among the best” for customer interaction, and “about average” for price and policy offerings.

How do I sign up?

You can’t sign up for a policy online, but you can get a personalized quote. These are the steps:

  1. Go to Principal Financial’s homepage. Then, hover over Individuals > Insure > Life Insurance.
  2. Click Get my Quote.
  3. Enter your age, gender, ZIP code, height, weight and tobacco use, as well as the policy type and coverage amount. Click See my Quote.
  4. You’ll then be presented with quotes. If you want to proceed with purchasing a policy, call 800-247-8000 ext 2522 or schedule a call by filling out the online form.

Frequently asked questions about Principal Financial

Life insurance ratings

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Our experts analyze life insurance companies to help you to find the strongest possible policy and premium for your family’s needs. We assess their financial strength, customer satisfaction, policy features and riders. We then give each insurer a score between one and five stars that reflects their offering and reputation in the industry.

Learn more about our methodology here.

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