Principal Financial Life Insurance Review: No Longer Offering Life Insurance Policies

This life insurer is a good fit for: Existing customers of Principal individual life insurance.

Please note: Since June 2021, Principal has stopped offering individual life insurance policies for purchase. However, it is still supporting customers with existing policies. The information in this review is relevant only to existing customers and their policies.

• Average cost of a $500,000 policy: 35-year-old male, non-smoker = $311, 35-year-old female, non-smoker = $264
• Term life policy limits: $200,000 and up
• Universal life policy limits: $25,000 and up
• Riders/add-ons: Waiver of premium, terminal illness death benefit, no-lapse guarantee, life paid-up, accelerated benefits, conversion extension
• Eligibility: Those in excellent health may qualify for coverage with no medical exam. Others must meet basic health requirements.
• Discounts available: None
• Other insurances offered: Individual disability, group insurance through employers

Top perks

Variety of insurance products

Principal Financial is a company a policyholder can grow with -- from their first term life policy through survivorship life insurance that can help with estate planning, the company offers it all.

Financial security

AM Best gives Principal Financial an A+ rating for financial security -- an essential rating for policyholders who want their insurer to be there when the need arises.

Ethical business practices

Ethisphere Institute, a company dedicated to identifying companies practicing corporate ethics, has named Principal Financial one of the World's Most Ethical Companies eight times. Out of the multitude of companies on the planet, Principal is one the few recognized for its ethical leadership and involvement with stakeholders.

What could be improved

Limited online capabilities

When it's time to make a change to a policy, chances are the policyholder will need to contact Principal Financial directly. Some changes cannot be completed online.

Customer service

Quality of customer service is in the eyes of the beholder, and while Principal Financial does not have low customer service ratings, there is room for improvement. It ranks ninth among the 24 life insurance companies ranked by J.D. Power for customer service satisfaction. If nothing else, it gives the company something to work toward.

Based on our research, the following rates cover four different scenarios. While they may not be precise for every applicant, they do illustrate average annual premiums on a $500,000 policy.

If you want a life insurer with a high customer satisfaction rating: Nationwide shines where Principal Financial doesn't. But note that Nationwide does not sell individual disability insurance.

If you want a life insurer that won't put you through the ringer to get a policy: Ethos Life is a good choice for those who prefer to buy life insurance without speaking to an agent or undergoing a medical exam.

One of the most attractive things about Principal Financial is the array of policy types it offers. They include:

Term

Term life insurance provides a specific amount of coverage for a set number of years. For example, someone may take out a $250,000 policy for 20 years. Payments are fixed for those 20 years, and the policy expires at the end of the term.

Universal

Principal Financial's universal life insurance offers a death benefit for the entirety of the policyholder's life as long as premiums are paid. Universal life also offers flexible payments, adjustable coverage, and, depending on the type of universal life policy chosen, may include cash value growth.

Variable universal

Principal Financial's variable universal life is another permanent type of life insurance. However, this policy includes cash value, flexible premium, a flexible death benefit (hence the name "variable"), and investment opportunities.

Indexed universal

Another permanent life insurance option is Principal's indexed universal policy. With indexed universal life, a policyholder's cash value component is tied to how well a financial market of the company's choosing is performing. It could be the S&P 500, Dow Jones Industrial, or a less obvious choice like Hang Seng Index.

Survivorship life insurance

A survivorship life insurance policy is for two people. And unlike traditional life insurance, it does not pay out until both policyholders have died. Survivorship life insurance is not for everyone, but serves a specific purpose. For example, a survivorship policy may be purchased by a couple wishing to leave enough behind to pay estate taxes, care for a special needs child, or leave a legacy to an organization (or people) they care about.

Principal Financial offers a wide range of riders (extra benefits a person can add to a policy). Here are several of them:

Accelerated benefits

An accelerated benefits rider allows a policyholder diagnosed with a terminal illness to collect up to 75% of their death benefit (up to $1 million) prior to death.

Conversion extension

Principal Financial's conversion extension rider lets the policyholder extend the term of their policy. This is an essential benefit for anyone who ends up working more years than initially planned, takes in grandchildren to raise, or otherwise finds themselves in need of life insurance for longer than anticipated.

Waiver of premium

A waiver of premium rider waives the premium as long as a policyholder is totally disabled.

Applying for life insurance through Principal Financial is surprisingly easy. The first step is to determine which type of policy you want. Next, determine how much coverage you need. Once you've made those decisions, applying for coverage is just a matter of filling out an application and answering health-related questions (if you opt for accelerated underwriting with no medical exam).

If you're required to undergo a medical exam to qualify for coverage, you'll be contacted to schedule one. The medical exam is relatively straightforward, with the examiner checking your height and weight. They also ask medical questions, many of which you probably answered on your application. They also ask for a urine sample and draw blood for testing.

Once Principal Financial has the medical exam results, Principal Financial gives you an exact premium amount.

Anyone who qualifies medically, up to the age of 80, is eligible for a Principal Financial life insurance policy.

When J.D. Power conducted its annual customer satisfaction study in 2020, Principal Financial earned a customer satisfaction rating of 772 out of 1,000. Overall, it placed ninth out of the 24 life insurance companies included.

• Anyone who wants the opportunity to convert to different policies as they age.
• Anyone under 80 who is looking for an affordable term life premium.
• Anyone who values working with a highly ethical company.

Deciding which life insurance company provides the right coverage is a big decision. While Principal Financial life insurance has a strong reputation, tremendous financial backing, and more than 140 years in business, it's far from the only option on the market. Anyone looking for high customer satisfaction ratings may want to consider Nationwide life insurance. Those who prefer to buy life insurance without speaking to an agent or undergoing a medical exam may be interested in Ethos.