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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: 4.0 / 5.0

★★★★★

Get a quote if…

  • You’re interested in a term or universal cash value policy.

Pick something else if…

  • You want a whole life insurance policy.

20 to 85

Issue Age

$200,000 to $50,000,000

Coverage

Yes

Medical Exam Required

Details

Free quote Online, Phone
Policy options Term, Permanent
Term lengths 10, 15, 20, or 30 years
Monthly cost As low as $17.06
Claim methods Phone: 800-331-2213
Ratings BBB: A+ rating. J.D. Power’s: “among the best”
Available states Certain policies may not be available in New York
Customer support Phone, Online
Riders Yes

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 sells generous policies, and 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 aged 55 to 80, this joint policy covers two people, and pays out when both spouses have died.

What riders can I add to my life insurance policy?

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

  • Accelerated death benefit. Allows you to access up to 75% of the death benefit — up to $1 million — if you’re diagnosed with a terminal illness.
  • Children term insurance. Lets you add eligible children to a policy, with coverage between $5,000 and $25,000.
  • Waiver of specified premium. Waives your premium payment if you become completely disabled.
  • Extended coverage. Extends your coverage — and the full death benefit — to the date of your death if you live beyond age 121.
  • Overloan lapse protection. After meeting criteria, this rider allows you to take out loans and withdrawals knowing your policy won’t lapse.
  • Cost of living increase. To keep up with inflation, this allows you to increase your insurance coverage with no additional underwriting.
  • Policy split option provision. Split coverage into two individual policies of equal amounts in the event of divorce or major tax changes.
  • Four-year term insurance. An add-on to survivorship policies, this provides a death benefit equal to 122% of the base policy face amount if you both pass away within the first four years of the policy.
  • 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 do I get the best rate?

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.

Principal’s Accelerated Underwriting Program is available 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.
  • Option for no medical exam. If you qualify, Principal’s Accelerated Underwriting Program gives you the option to opt out of paramedical exams or lab testing. The $1 million coverage is among the highest fast-track death benefit on the market.
  • 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 your brief phone interview to collect your personal history.
  • Financially strong. High ratings from A.M. Best, Moody’s, Fitch, and Standard & Poor mean Principal has the cash reserves to pay out claims.

Cons

  • Claims process. Your beneficiaries can only file a life insurance claim over the phone.
  • 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.

Compare life insurance companies like Principal

Name Product Issue Ages Minimum Coverage Maximum Coverage Medical Exam Required State Availability
LadderLife™ Life Insurance
20 - 60 years old
$100,000
$8,000,000
No
Not available in New York
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
Sproutt
18 - 100 years old
$50,000
$3,000,000
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This life insurance broker combines technology and the human touch to match you with a policy tailored to your needs.
Bestow
21 - 54 years old
$50,000
$1,000,000
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Not available in New York
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
AIG
AIG
20 - 85 years old
$100,000
$2,000,000
Depends on policy.
Products and product features may not be available in all states.
This well-established life insurance provider could offer you $250,000 worth of coverage for as low as $14 per month.
Fabric
25 - 60 years old
$100,000
$5,000,000
No
Available in all states except NY, CA and MT
Get affordable term life insurance with accelerated underwriting or no-exam coverage up to $1,000,000. Available in all states except CA, NY and MT.

Compare up to 4 providers

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 107 complaints in the last three years, which is low for a company of that size.

In J.D. Power’s 2018 U.S. Life Insurance Study, Principal ranked 13th of 23 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 some quotes. If you want to proceed with purchasing a policy, call 800-247-8000 or schedule a call by filling out the online form.

How do I file a life insurance claim with Principal Financial?

To file an individual life insurance claim, call the claims line at 800-331-2213. A professional will walk you through the process and request supporting documents, such as a copy of the death certificate.

More about Principal Financial

Founded in 1879 as Bankers Life Association, Principal has grown to become a Fortune 500 company with branches in 19 countries around the world. Headquartered in Iowa, it changed its name to Principal Financial Group in 1985, and went public in 2001.

Today, the top-tier financial services organization is known globally for its investment management, and closer to home for its life insurance products, with underwriting by Principal National Life Insurance Company.

In addition to life insurance, Principal Financial offers the following products and services:

  • Disability insurance
  • Retirement savings protection
  • Retirement planning
  • Estate planning
  • IRAs
  • Mutual funds
  • Annuities — fixed, income, indexed and variable

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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