Principal Financial life insurance review 2018 |

Everything you should know about Principal Financial life insurance

Prepare for the expected and the unexpected with this major insurer that offers competitive coverage on your terms.

Since life insurance affects your family, picking a provider isn’t the easiest decision. Principal tries to make the process clear and customized so you can protect your family’s needs now, and when you’re gone.

The Principal Financial Group is a multinational company — with an eye-watering $668.6 billion in assets — and one of the 300 largest companies in the US. It’s a secure choice for life insurance, and a competitive one — especially for healthy applicants who want to forgo a medical exam.

What is Principal Financial known for?

Founded in 1879 as Bankers Life Association, Principal has blossomed into a Fortune 500 company with branches in 19 countries around the world. While it’s still headquartered in Iowa, it’s evolved over time, 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.

A financial powerhouse, it’s generous with charitable donations, community grants, and disaster relief, and has a foundation set up to handle those. It has also been recognized as one of the World’s 100 Most Ethical Companies by Ethisphere six years in a row.

Pros and cons of Principal Financial life insurance


  • User-friendly online portal. Manage your account and make policy payments online.
  • Option for no medical exam. If you qualify, its 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.
  • Healthy Lifestyle Credits program. The company allocates points, based on physical and mental health, to help clients get a better rate class.
  • 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.


  • Claims process. You can only file a life insurance claim over the phone. Only employers have the option to file claims online.
  • Limited online system. You can’t update beneficiaries or cancel your policy online.
  • 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.
  • Family medical history. While lenient in many health aspects, the insurer considers cancer and death from cardiovascular disease, stroke and diabetes before age 60.

What life insurance coverage does Principal Financial offer?

Principal offers a suite of life insurance products for short- and long-term needs. Its roster includes term life, universal life, variable universal life and survivorship life insurance.

The most cost-effective option, term insurance provides coverage for 10, 15, 20 or 30 years. Principal is unique in that they also offer a one-year term for immediate needs. If you sign up to Principal Term, you’ll pay a fixed premium for the length of the term. That dollar figure is based on factors such as your age, gender, health and driving record.

At the end of the term, you have a few options: you can simply let your insurance end, renew it or convert to a permanent, cash-value policy without further evidence of insurability.

When you die, your beneficiaries receive a tax-free death benefit to use as additional income, to pay off a mortgage or to cover your final expenses. Principal’s minimum benefit amount is $200,000. Its maximum is $1 million for non-medical exam life insurance*, and over $1 million with a medical exam.

Though this is Principal’s most budget-friendly insurance product, you can add on a children’s term insurance rider, accelerated death benefit rider or a waiver of premium rider, among others.

*Principal’s Accelerated Underwriting Product is available for those ages 18 to 60. Unlike many no-exam companies, you can qualify for a Preferred rate class — which makes Principal’s price competitive in this category.

You can’t outlive a universal life policy, as long as you pay your premiums. This type of life insurance offers lifetime protection, death benefits and access to the cash value of your policy, which accumulates over time.

Principal has a slew of universal life insurance policies, so you can customize your coverage to meet your needs. They’re more flexible than term life policies: you can adjust the amount and frequency of your payments and your level of protection.

The options include:

  • Principal Universal Life Provider Edge
  • Principal Universal Life Protector IV
  • Principal Universal Life Accumulation II
  • Principal Indexed Universal Life Accumulation
  • Principal Indexed Universal Life Flex
  • Principal Indexed Universal Life Flex II

With the Indexed policies, the cash value of your policy is tied to an index, like the S&P 500, which may accelerate its growth.

If you choose universal life insurance, you can use Principal’s riders to optimize your policy.

To invest your premiums in stocks, bonds or mutual funds, consider variable life insurance. 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 insurance by prospectus only. It can be tweaked to meet your personal protection and cash accumulation goals.

Its policies are:

  • Principal Variable Universal Life Income II
  • Principal Variable Universal Life Income III (unavailable in Maryland)
Also known as a “second-to-die” policy, survivorship covers two lives, typically a married couple. The death benefit is paid out to beneficiaries after the second person passes away.

Survivorship policies can be used in estate planning to leverage various tax deductions and usually cost less than purchasing two separate policies.

Principal’s product is called Principal Survivorship Universal Life Protector II. It’s designed for males and females ages 55 to 80 who have joint estate planning needs or sizeable assets they want to pass on to their heirs — minus the tax burden.

To customize your policy, you can add on a lapse protection rider, extended coverage rider or policy split provision.

Principal’s snapshot of the basic features of its term and permanent policies.

Principal Financial life insurance snapshot

What’s not covered in my policy?

Standard life insurance policies provide financial protection while giving your family a sense of security for the feature. However, they don’t cover everything life can throw at you. For more customized protection, look to Principal’s many riders.

Depending on your policy and rate class, you may be able to add on the following riders:

  • Accelerated death benefit. This 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. This rider let you add eligible children to a policy, with coverage between $5,000 and $25,000.
  • Waiver of specified premium. This waives your premium payment if you become completely disabled.
  • Extended coverage. This rider 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 can 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.

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.

What do others say about this brand?

Principal has been accredited with the Better Business Bureau since 1948 and has an A+ rating. It has a very low complaint ratio for a life insurance company of its size, which points to its speedy customer service processes.

In J.D. Power’s 2017 U.S. Life Insurance Study, Principal ranked No. 11 of 24 insurers across the country. It was deemed “among the best” for customer interaction, and “about average” for price, offerings and other categories.

What other services does Principal Financial offer?

The Principal Financial Group offers the following products and services:

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

Bottom line

When you purchase a life insurance policy, you’re purchasing peace of mind that comes with knowing the company is catering to your family’s needs and has the financial strength to pay out your death benefit. As a huge global organization, Principal offers that security, as well as a suite of life insurance options.

Its underwriting gives clients a chance to improve their rate class via riders and healthy lifestyle credits. It also offers fast-tracked underwriting — no medical exams or lab tests — at no extra cost for healthy applicants. But while its customer service is great, its online services could be improved.

Life insurance is intensely personal, so always shop around before settling on a policy.

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