Principal Life Insurance Review 2024: Is It Right For Your Family?
Principal Life Insurance
Principal Life Insurance : Life insurance selection for your family’s financial security can feel overwhelming. Many insurance companies compete for your business. Finding a reliable provider with complete coverage and fair rates needs a careful look.
Principal life insurance, part of Principal Financial Group, remains one of America’s 145-year old insurance providers. We really looked at Principal’s insurance options, financial strength, customer service, and claims process to help you see if this company lines up with your family’s needs. This review gets into their term and permanent life insurance policies, application requirements and premium rates to give you a full picture of Principal’s offerings.
Company Overview and Financial Strength
Principal Financial Group’s story spans almost 150 years, evolving from a small Des Moines startup into a global financial powerhouse. The company’s trip started at the time Edward Temple founded The Bankers Life Association in 1879. His goal was simple yet powerful: to provide affordable Principal Life Insurance to bankers and their employees.
History and background of Principal
The company’s early success exceeded expectations. By 1909, it became America’s largest assessment company with $400 million in active life insurance. A big change came in 1985 when The Bankers Life became Principal Financial Group. The company reached new heights in 2001 by going public, and its stock opened at $20.50 per share.
Financial ratings and stability metrics
Principal’s current financial position shows impressive stability metrics:
| Rating Agency | Rating | Significance | Outlook |
|---|---|---|---|
| A.M. Best | A+ (Superior) | 2nd highest of 13 levels | <citation index=”26″ link=”https://investors.principal.com/financials/credit-ratings” similar_text=”Detailed Financial Strength Ratings Company |
| Fitch | AA- (Very Strong) | 4th highest of 19 levels | Stable |
| Moody’s | A1 (Good) | 5th highest of 21 levels | Stable |
| S&P Global | A+ (Strong) | 5th highest of 20 levels | Stable |
This is a big deal as it means that Principal’s financial strength shows in its 2023 operating earnings of $1.60 billion. The company’s Risk-Based Capital (RBC) ratio stands at 426% as of year-end 2023, which surpasses its 400% target.
Market position and reputation
Principal stands as a major player in the life insurance industry. The company ranks 22nd among life insurers in market share and generates more than $2.50 billion in premiums. Its global reach extends to 17 nations and serves about 50 million customers.
The company made a strategic move by acquiring Ascensus’ employee stock ownership plan (ESOP) business in 2024, which strengthened its position as a leading ESOP service provider. On top of that, it maintains strong relationships with small and mid-sized businesses, leading to high customer retention rates.
Principal’s financial strength shows in these numbers:
- Total assets of $304.66 billion
- Assets under management of $713.90 billion
- Total equity of $16.12 billion
Life Insurance Product Portfolio
Principal offers several life insurance options to protect your family’s financial future. Let’s take a closer look at their portfolio.
Term life insurance options
Principal offers term life insurance with four duration options: 10, 15, 20, and 30 years. These policies work best if you are between ages 35-55. The coverage starts at $200,000, making it available to many families. You can convert your term policy to permanent coverage later.
Permanent life insurance policies
Principal’s permanent life insurance solutions meet different financial goals. Their Universal Life Flex III policy comes with these features:
- Coverage starting at $25,000 up to $1 million or more
- Protection through age 121
- Flexible premium payment options
Principal also offers specialized permanent policies:
- Indexed Universal Life: Links cash value growth to market performance with a 0% minimum guarantee
- Variable Universal Life: Combines death benefits with investment opportunities
- Survivorship Universal Life: Covers two people and pays out after both pass away
Riders and additional benefits
Principal’s policies come with complete rider options. Here are the most valuable ones:
| Rider Type | Benefit Description |
|---|---|
| Accelerated Benefits | Access up to 75% of death benefit (max $1 million) if terminally ill |
| Chronic Illness | Provides up to 75% of policy value or $2 million if chronically ill |
| Waiver of Premium | Covers premium payments during total disability |
| Conversion Extension | Extends the window to convert term to permanent coverage |
Business owners can get specialized riders like Business Value Increase and Salary Increase options. The Cost of Living Increase rider lets you boost coverage every three years through age 55.
Policy Features and Benefits
Let’s take a closer look at Principal’s policy features to find a strong set of benefits that serve a variety of financial needs.
Coverage amounts and flexibility
Principal’s policy lineup comes with remarkable flexibility in coverage amounts. Their universal life policies provide coverage starting at $25,000 and extend up to $1 million or more. Principal’s Variable Universal Life Income IV policy works best for high-income earners between ages 35-55, making it ideal for business owners and executives.
Premium payment options
Principal has optimized their premium payment process to make it convenient and flexible. Their online payment system impresses with quick and secure transactions directly from checking or savings accounts. Their universal life policies excel by offering:
- Adjustable premium payments to match changing financial situations
- Automated income features with over-loan protection
- Options to designate premium allocation between insurance protection and cash value
Living benefits and cash value growth
Principal’s permanent policies’ cash value component offers notable growth opportunities. Their indexed universal life insurance provides:
| Feature | Benefit |
|---|---|
| Market Link | Growth tied to stock market index performance |
| Protection | Interest rate floor against market declines |
| Tax Benefits | Tax-deferred growth potential |
Universal life policies accumulate cash value at a fixed interest rate with guaranteed minimums. In spite of that, these policies come with certain factors to think about:
- Policy fees and expenses can affect cost and cash value growth
- Performance below expectations might require premium adjustments
- Active management becomes essential due to the flexibility component
Principal’s variable universal life insurance gives you market-based cash value accumulation if you seek higher growth potential. This option allows tax-deferred cash value access without penalties. Their Executive VUL III stands out as it caters specifically to businesses looking to attract and retain their core team.
The universal life policies feature extended no-lapse guarantees until the lesser of age 95 or 35 years. Policyholders can enjoy long-term protection while maintaining flexibility in their coverage and payment structure.
Application Process and Requirements
Let’s look at Principal’s policy options and guide you through their application process that has both traditional and accelerated paths to coverage.
Medical exam requirements
Principal’s medical exam requirements change based on your age and coverage amount. A standard medical exam has:
- Blood pressure and pulse measurements
- Height and weight documentation
- Blood and urine tests for detailed health screening
- Detailed medical history review
Principal’s Accelerated Underwriting program lets qualified applicants between ages 18-60 skip the medical exam. You can get coverage amounts between $50,000 and $1 million with this option.
Underwriting process timeline
Our analysis of Principal’s underwriting process shows two distinct paths:
| Accelerated Underwriting | Traditional Underwriting |
|---|---|
| Decision in 24 hours | 4-6 weeks average |
| No medical exam required | Full medical exam needed |
| Available for qualified applicants | Standard process for others |
| Online or phone application | In-person requirements |
Your application goes through original screening to determine if you qualify for accelerated underwriting. Principal delivers competitive turnaround times whether you need traditional underwriting or qualify for the accelerated process.
Documentation needed
Here’s what Principal typically needs from you. Your chosen policy and coverage amount determine the exact requirements:
- Simple Application Components:
- Part A: Personal information and coverage details
- Part B: Medical history (completed online or via phone)
- Part C: Signatures and authorizations
- Additional Documentation:
- Driver’s license and Social Security number
- Financial documentation for income verification
- Medical records from your healthcare providers
- Motor vehicle report spanning seven years
Principal’s application submission options are flexible. You can complete Part B through their online portal or talk to a medical application specialist. These specialists are available Monday through Friday, from 7 a.m. to 6 p.m. CT.
Business cases need plan-specific guidelines and any relevant Multi-Life Business Underwriting Program documentation submitted together. When Principal can’t make a suitable offer, they work with Preferred Product Network (PPN) to find alternative options.
Cost Analysis and Premium Rates
You need to understand insurance costs to make smart decisions about your family’s financial protection. Let’s get into Principal’s pricing structure to help you figure out their rates and fees.
Factors affecting premium rates
Principal bases your premium rates on several key factors:
- Age and health status
- Coverage amount and term length
- Payment frequency options
- Medical exam results
- Lifestyle choices (smoking status)
Principal announced a 12% average reduction in their premium rates. This change helps older applicants the most, though younger age groups might see their rates go up a bit.
Sample rates by age and coverage
Principal’s term insurance works best if you’re between 35-55. They offer four term length options:
| Term Length | Best Suited For |
|---|---|
| 10-Year | Short-term coverage needs |
| 15-Year | Young families |
| 20-Year | Mortgage protection |
| 30-Year | Long-term family protection |
Principal’s universal life insurance starts at coverage of $25,000. Their indexed universal life policies begin at $100,000.
Fee structure and charges
Here’s what we found in Principal’s fee structure:
- Universal Life Policy Charges:
- Mortality and expense risk charges
- Surrender fees (if applicable)
- Administrative costs
Universal life insurance policies come with fees that affect both cost and cash value growth. The company lets you be flexible with premium payments. You can:
- Increase or decrease payment amounts
- Skip payments (with sufficient accumulated value)
- Adjust coverage levels as needed
Principal offers guaranteed issue term insurance to businesses with premium equivalency across all payment frequencies. Your annual payments will equal the total of monthly, quarterly, or semi-annual payments.
Taking withdrawals and loans from universal life policies can affect your:
- Death benefit amounts
- Cash accumulation value
- Overall policy performance
Principal stays upfront about premium adjustments. You might need to pay more to keep your coverage if your policy doesn’t perform as expected.
For group coverage, Principal lets employers and employees split premiums in different ways. Companies can:
- Pay all premiums
- Share costs with employees
- Let employees cover full premium costs
Principal’s universal life policies need more attention than term insurance. Their flexibility and cash value features mean you’ll need to watch them closely and make adjustments when needed.
Customer Service and Claims Experience
Our exploration begins with Principal’s customer service infrastructure and claims handling process that create the foundation of their policyholder experience.
Online account management features
Principal.com offers a detailed online portal that makes account management easier. The platform comes with several useful features:
- Policy information access and updates
- Premium payment processing
- Beneficiary designation changes
- Document upload capabilities
- Account statement viewing
- Security features with multi-factor authentication
Policyholders can reach customer service representatives at 800-986-3343 for tailored assistance. The company also maintains an online help center with detailed FAQs and troubleshooting guides.
Claims process overview
Principal’s claims process focuses on efficiency and accessibility. The company completes most claims within 5-7 business days after receiving all required documentation.
Life insurance claims can be submitted through multiple channels:
- Online submission through their secure portal
- Phone initiation at 800-245-1522
- Traditional mail or fax submission
- Email documentation
Beneficiaries must provide these documents:
- Completed claim form
- Certified death certificate
- Valid beneficiary designation documentation
- Additional documentation for special cases
Principal speeds up processing for claims under $50,000, usually completing these within 5 working days. Each filed claim gets assigned to a personal representative who maintains consistent communication throughout the process.
Customer satisfaction ratings
Our analysis of Principal’s customer satisfaction metrics shows mixed results across different rating platforms:
| Rating Source | Score/Rating | Context |
|---|---|---|
| J.D. Power 2023 | 778/1000 | Ranked 17th out of 22 companies |
| BBB Rating | A+ | Accredited business |
| NAIC Complaint Index | 0.20 (2022) | Below industry average |
NAIC data reveals that Principal received five times fewer complaints than the industry standard for individual life insurance. Their group insurance segment showed slightly higher complaint volumes.
The company improves customer experience with additional support services:
- Grief support for beneficiaries
- Financial planning assistance
- Will preparation services (available for spouses up to three months after death)
Principal excels in handling group claims for business clients by offering:
- Express claims processing
- Dedicated claim representatives
- Beneficiary support services
The secure online platform makes policy management straightforward. Individual and group policyholders can access their accounts 24/7, make premium payments, and update personal information.
Principal maintains clear timelines for claims:
- Standard claims: 7-10 business days processing
- Express claims: 5 working days for eligible cases
- Group life claims: Generally processed within 5 working days
Conclusion
Principal Financial Group has earned its reputation as a trusted life insurance provider with almost 150 years of experience and excellent financial ratings. Their term and permanent life insurance policies give customers flexibility to match different financial needs and goals.
The company’s operational strength shows in their lower-than-average complaint ratio and quick claims processing, despite room to grow in J.D. Power ratings. Their recent 12% premium reduction has made policies more affordable, which benefits applicants between ages 35-55.
Principal’s accelerated underwriting program sets them apart by letting qualified applicants get coverage without medical exams. Customers also benefit from a complete online account management system that makes policy handling straightforward.
Your specific needs should guide your decision to choose Principal as your insurance provider. Take time to review coverage amounts, premium costs, and rider options carefully. Permanent life insurance policies can provide extra benefits, but they need more hands-on management and a clear understanding of fee structures.
FAQs
Q1. What is the typical timeline for Principal Life Insurance to process a claim? Principal generally processes claims within 5-7 business days after receiving all required documentation. For express claims under $50,000, the process can be completed in as little as 5 working days.
Q2. Is Principal Life Insurance Company a legitimate insurance provider? Yes, Principal Life Insurance Company is a legitimate nationwide provider of life insurance and annuity products. With nearly 150 years of history, it has established itself as a significant player in the life insurance industry.
Q3. What types of life insurance policies does Principal offer? Principal offers a range of life insurance products, including term life insurance with 10, 15, 20, and 30-year options, as well as permanent life insurance policies such as Universal Life, Indexed Universal Life, and Variable Universal Life.
Q4. How does Principal’s accelerated underwriting program work? Principal’s accelerated underwriting program allows qualified applicants between ages 18-60 to potentially skip the medical exam for coverage amounts between $50,000 and $1 million. Eligible applicants can receive a decision within 24 hours.
Q5. What factors affect premium rates for Principal’s life insurance policies? Principal determines premium rates based on several factors, including age, health status, coverage amount, term length, payment frequency, medical exam results, and lifestyle choices such as smoking status. They recently announced an average 12% reduction in premium rates, particularly benefiting older applicants.
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