Principal Life Insurance Review

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Principal Life

Principal Life

overall rating
4.2

You should be aware that not all life insurance companies are currently accepting insurance applications due to COVID-19 pandemic. We'll update our reviews as we find more information about what companies are currently accepting new applications.

Our Take

Principal Life offers a wide variety of insurance for those who have special financial needs. While they have a strong line-up of core offerings, they also offer several unique policies and optional add-ons that policyholders can use to get more benefits from their coverage.

Important:

Based on our review of more than two dozen life insurance companies, Principal Life Insurance was not one of the best companies we found. To see other options that may be better, visit our list of the best life insurance companies.

  • Pros and Cons
  • Key Takeaways
  • Specifications
Pros and Cons
Pros
  • Multiple policies for each type of permanent insurance

  • Nearly a dozen available riders to help customize service

  • Outlined policy details online so you know exactly what you’re getting

  • Investment advice and other financial services through your Principal representative

  • Excellent ratings for financial stability

Cons
  • Surrender charges apply for permanent policies

  • Customer service keeps “bankers’ hours”

  • Each rider is only available with a couple of policies

Key Takeaways
  • Principal offers numerous types of both term and permanent coverage to meet specific needs.
  • Principal ranked #4 overall for customer satisfaction by J.D. Power. 
  • More than a dozen riders help Principal policyholders get maximum value from their policies. 
  • Principal has a central customer service center as well as local reps to help customers.
  • In addition to indexed and universal life, Principal also offers survivorship policies to cover two insureds.
Specifications
  • Year Founded 1879
  • Average Cost Per Month Starting at $14 per month
  • Kinds of Plans Term, universal, indexed universal, variable universal, survivorship
  • Number of Plans Eight
  • Payment Plan Options Annual, semi-annual, quarterly, monthly, online
  • Official Website https://www.principal.com/

Principal Life Insurance offers five different types of insurance in eight different plans. In this review, we’ll explore the types of life insurance that Principal offers as well as the riders that can be added to build a custom policy. We’ll also review company ratings for financial strength and customer satisfaction, plus pricing information for prospective policyholders.

Company Overview: An Established Giant 

Principal Life Insurance is a division of Principal Financial Group, a large financial services company headquartered in Des Moines, Iowa. Principal was founded in 1879 and is part of Fortune’s list of the 500 largest companies in the U.S.

Available Plans: Lots of Options

Principal Life offers five different types of life insurance coverage with multiple ways to set up or build a custom policy. The company offers term life, which provides policyholders with a preset death benefit for a defined period of time in exchange for level premiums that don't change over the years. Customers can also choose from several types of permanent coverage that, unlike term, lasts as long as your premiums are paid.

Our expert says

Term life through Principal can be issued for customers age 20 to 80 and can be renewed up to age 95. The minimum policy size is $200,000.

The types of insurance offered by Principal Life include:

Term Life Insurance

Term life through Principal can be issued for customers age 20 to 80 and can be renewed up to age 95. The minimum policy size is $200,000. Principal also allows term life policies to be converted to permanent coverage up to age 70 or the end of the predetermined conversion period stated in the policy. 

The conversion period for Principal term policies varies by term length: 

  • 10-Year Term: First seven years of the policy
  • 15-Year Term: First 12 years of the policy
  • 20-Year Term: First 15 years of the policy
  • 30-Year Term: First 20 years of the policy

Universal Life Insurance

Universal life coverage from Principal is a permanent policy that offers flexible death benefits and flexible premiums. Policies accumulate cash value based on a variable interest rate but have a minimum interest rate guarantee. Policies can be issued from age zero to 85. 

Principal offers a wide range of riders to help customize coverage.

Principal Life offers two universal life policies: 

  • Universal Life Flex III: Have a minimum policy size of $25,000 for ages zero to 19 and $50,000 for ages 20 to 85. Flex III policies also include extended, no-lapse guarantees for either the first 35 years of the policy or age 95, whichever comes first.
  • Universal Life Protector V: Can be issued with minimums of $25,000 or $50,000 depending on the insured’s age and tobacco use. Large death benefit policies over $15 million for estates are available but require extra approvals. 

Indexed Universal Life Insurance

Indexed universal life policies from Principal can be issued from age 20 to 85. These policies provide death benefit protection as well as the ability to grow cash value with built-in interest rate protection. Policies earn interest based on an underlying stock market index with built-in protection to prevent losses.

The indexed universal life policies available from Principal include: 

  • Indexed Universal Life Accumulation II: Offers long-term growth and income plus a death benefit. Policyholders can tie their cash accounts to either a fixed account or one of three S&P indices. The minimum policy size is $50,000. 
  • Indexed Universal Life Flex II: Policies have a minimum size of $100,000. They offer flexible coverage and moderate cash value growth that can be tied to either a fixed account or one of two S&P indices.

Variable Universal Life Insurance

Variable universal life is a permanent insurance policy that provides the opportunity for more aggressive cash value growth. These policies allow customers to set their own investment strategy and grow the value of their cash account based on market performance.

Principal Life offers the following variable universal life policies: 

  • Executive Variable Universal Life III: Offers death benefits for business-owned/sponsored solutions, making it ideal for employers seeking to attract and retain key employees. Policies have a $100,000 minimum and provide long-term cash value growth.
  • Variable Universal Life Income IV: Offers long-term cash value growth that is based on variable market interest rates. Policies have a $100,000 minimum and have numerous optional riders for customers to add features and benefits to their coverage.

Survivorship Universal Life Insurance

Survivorship life insurance from Principal insures two people and pays a death benefit upon the death of the second insured. This makes survivorship policies ideal in estate planning and also helpful in leveraging some tax deductions.

Principal offers one survivorship universal life policy:

  • Survivorship Universal Life Protector III: Designed for clients who want cost-efficient, guaranteed protection on two people. It is ideal for clients with estate planning needs. Policies can be issued from ages 20 to 85 and have a minimum face value of $250,000. 

Survivorship Universal Life Insurance provides estate planning protection for older, more conservative clients. It can also be used to fund buy-sell and split-dollar plans for businesses.

Available Riders: A Great Line-up of Add-ons

Principal Life policyholders who want to get even more out of their policies can add riders for additional benefits and features. Not all riders are available for all policies. In fact, most policies only have a couple of optional riders available.

The riders available for Principal Life policies include:

Children’s Insurance

A children’s insurance rider allows policyholders to add term coverage for a child to an existing policy. Children’s term coverage is available from $5,000 to $25,000.

Conversion Extension 

Term policies from Principal come with a conversion extension rider that allows the insured to convert the policy (within certain timeframes) to permanent coverage. Conversion periods vary by policy term.

Waiver of Premium

Waiver of premium riders cover a policyholder’s premiums if they become disabled. This rider is available with term policies and some universal life policies.

Waiver of Monthly Policy Charge

A waiver of monthly charge rider pays the monthly policy charges if the insured becomes disabled. This rider is available with Variable Universal Life Income IV policies.

Accelerated Benefit 

An accelerated benefit rider, also called a terminal illness death benefit advance rider, allows policyholders to tap 75% of their death benefit (up to $1,000,000) if they’re diagnosed with a terminal illness. There is no cost for this rider—it’s included with Principal’s term life policies as well as VUL Income IV.

Maturity Date Extension

Maturity date extension riders automatically extend the maturity date of a policy after the first insured dies and are included in survivorship policies at no cost.

Extended No-lapse 

Extended no-lapse riders guarantee that policies will not lapse before either age 95 or the end of the 35th year of the policy, whichever comes first. This rider is only available with certain Principal universal life policies.

Cost of Living Increase

Cost of living increase riders allow policyholders to increase their death benefits based on changes to the Consumer Price Index (CPI) without having to prove their insurability. This rider is available with certain universal life policies including Flex III and Indexed Accumulation II.

Life Paid-Up

Life paid-up riders offer no-lapse protection if policyholders take out large loans against their policy. This rider is available with certain universal life policies including Flex III and Accumulation II, but is only available in states where it’s approved.

Enhanced Cash Surrender Value

Enhanced cash surrender value riders reduce a policy’s surrender charges to boost the overall surrender value in the early years. This rider is available with Principal’s Executive VUL III policies.

Change of Insured

A change of insured rider lets a policyholder change who the policy insures. This type of rider is ideal for use in business situations (for example with key man insurance). The rider can be added to Principal Executive VUL III and VUL Income IV policies.

Death Benefit Guarantee

A death benefit guarantee rider guarantees that the policy won’t lapse before age 85, so long as the policyholder meets certain premium requirements outlined in policy documents. The rider can be added to Executive VUL III policies. 

Policy Split Option

Policy split option riders are automatically included in Principal’s survivorship policies at no cost. These riders allow policyholders to split their policy if they get divorced or meet certain other criteria.

Salary Increase

A salary increase rider enables policyholders to increase the face amount of their policy based on salary adjustments without requiring evidence of insurability. This rider is available for VUL Income IV policies but costs extra if the value of the benefit exceeds $30,000.

Chronic Illness 

A chronic illness rider provides a policyholder with access to money while they’re still alive if they’re diagnosed with a chronic illness. This rider can be added to Principal’s UL Flex III, Indexed UL Accumulation II, and Variable Universal Life Income IV policies.

Lapse Protection 

A lapse protection rider provides policyholders with guaranteed death benefit protection for a preset period of time ranging from a few years up to the insured’s lifetime. This means that if your policy lapses because you can’t pay premiums, you can still collect a death benefit. This rider is available with universal policies.

Customer Service: Limited Hours & Local Reps

Policyholders who need help from Principal Life can call 800-986-3343 between 7 a.m. and 7 p.m. Central Time, Monday through Friday. Customers can also send an email to Principal’s service center directly through their website, visit Principal’s insurance help page, or get help from one of Principal’s local representatives directly.

Customer Satisfaction: Fourth Overall Among Life Insurers

Principal Life has an above-average rating from J.D. Power and actually ranked #4 overall among two dozen of the top national life insurance companies in its most recent study. Principal also has an A+ rating from the BBB. While the company does have numerous complaints, very few of them are related to life insurance. What complaints we could find are related to policies unexpectedly canceled for late payment and other administrative issues.

Our expert says

Principal Life has an above-average rating from J.D. Power and actually ranked #4 overall among two dozen of the top national life insurance companies in its most recent study.

Financial Strength: Great Ratings All-Around

Principal Life receives very strong financial ratings from multiple rating agencies. They have an A+ rating from AM Best, AA- from Fitch, A+ from S&P, and an A1 rating from Moody’s. These ratings should reassure policyholders that their insurance is backed up by a company with a strong balance sheet and excellent risk management practices.

Cancellation Policy: Not Easy & Fees Apply

Customers who decide that they want to cancel term life policies with Principal Life just have to stop paying the premiums. For those looking to cancel permanent policies, there are forms that they’ll need to sign; these forms aren’t readily available online—you may need to work with a Principal rep to obtain them. Principal also charges fees for partial and full surrenders of permanent insurance that vary by individual policy.

Price: Fairly Competitive

Principal offers a lot of different policies that can be customized and their prices are fairly competitive with other national providers. The company has an easy-to-use quoting tool to get an idea of your monthly premiums. Principal's prices may not be as low as you could find with other insurers.

Below are sample monthly premiums for $250,000 in term life coverage on a 20-year term for non-smoking customers in standard health.

Age Male Female
25 $14 per month $12 per month
35 $14 per month $13 per month
45 $51 per month $40 per month
55 $64 per month $47 per month
65 $394 per month $251 per month

Competition: Principal Life vs. Mutual of Omaha

Both Principal Life and Mutual of Omaha have excellent financial ratings. While both rank in the top four of all life insurance companies in J.D. Power’s study of national life insurance companies, Mutual of Omaha ranks #3 and Principal is #4. Principal offers more policy types than Mutual of Omaha with term life coverage costs roughly the same each month for both providers. Cost-conscious clients should be sure to get a quote from Mutual of Omaha, but those who value more customized coverage should use Principal.

  Principal Mutual of Omaha
Types of Policies Available Six Three
AM Best Financial Rating A+ A+
J.D. Power Ranking Among National Insurers #4 #3
Monthly premiums for $250,000 of term life coverage for a 35-year-old non-smoking customer in standard health $14.00 per month $14.84 per month
Final Verdict

A Great Option for Custom Coverage

Principal Life is a very well-established financial firm that has very strong financial ratings and ranks #4 overall among all national insurers for customer satisfaction. The company has a wide range of policies available and offers numerous riders so customers can get even more out of their policies. If you need custom coverage with a policy that meets your particular needs, Principal Life insurance is right for you.

Methodology

All of our reviews of life insurance companies are based on extensive research and analysis of each company based on offerings, customer service, financial stability, cost, and more. For each company, we compared the life insurance products offered, as well as available features, and reported customer experiences. Visit our life insurance review methodology for the full breakdown of what we evaluated.

Article Sources

The Balance requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
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  2. BBB. "Principal Financial Group." Accessed March 18, 2020.

  3. Principal. "Company Overview." Accessed March 18, 2020.

  4. Principal. "Term Life Insurance." Accessed March 18, 2020.

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  6. Principal. "Protector V." Accessed March 18, 2020

  7. Principal. "IUL Accumulation II." Accessed March 18, 2020

  8. Principal. "IUL Flex II." Accessed March 18, 2020

  9. Principal. "Executive VUL III." Accessed March 18, 2020

  10. Principal. "VUL Income IV." Accessed March 18, 2020

  11. Principal. "Survivorship UL Protector III." Accessed March 18, 2020.

  12. Principal. "VUL Income IV Product Guide." Accessed March 18, 2020.

  13. Principal. "VUL Income IV Product Guide." Accessed March 18, 2020.

  14. Principal. "Survivorship UL Product Guide." Accessed March 18, 2020.

  15. Principal. "Universal Life Flex III." Accessed March 17, 2020.

  16. Principal "Executive VUL III." Accessed March 18, 2020.

  17. Principal. "Executive VUL III." Accessed March 18, 2020.

  18. Principal. "UL Protector V." Accessed March 17, 2020.

  19. Principal. "Contact Us." Accessed March 17, 2020.

  20. JD Power. "Press Release." Accessed March 18, 2020.

  21. Principal. "Credit Ratings." Accessed March 18, 2020.

  22. Prinicpal Life. "Life Insurance Quote." Accessed March 17, 2020.