Principal Financial life insurance review
Insider's experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.
Principal Financial
Preparing for the unexpected by protecting income and preserving the quality of life for loved ones drives many people to seek life insurance coverage from companies like
Since 1879, the Iowa-based company has sold insurance and retirement products to individuals and businesses worldwide, accruing more than 50 million customers. However, at the close of September 2021, Principal Life Insurance stopped selling policies to individuals to focus on life insurance for business owners and, by extension, employees.
Today, the company's forte remains group term life insurance up to $1 million with the option of adding up to $500,000 of additional voluntary coverage per employee. In addition, Principal offers a wide array of universal life insurance for business owners since protecting your loved ones' future goes hand-in-hand with protecting your company.
Life insurance plans from Principal Financial
Term life insurance
Group term life insurance
This group plan is offered exclusively through employers to employees. Depending on your business budget, employers can pay all, part, or none of the annual premiums. Employees are generally eligible for a flat benefit (coverage based on a fixed dollar amount).
For example, a flat $20,000 can pay for a life insurance benefit of $20,000). Some buy a salary-based policy to set the policy by how much the employee makes.
For example, a 200% benefit on a salary of $50,000 pays a life insurance benefit of $100,000) up to $1 million per individual. Group term life insurance from Principal allows dependent coverage. The company pays a flat fee for the insured's spouse and children aged 26 and under. This extra cost can be passed on to employees.
Term policy buyers can also access extra features at no additional cost, including:
- Travel assistance
- Legal document support
- Identity theft kits
- Free access to licensed behavioral health providers via the emotional health support line
Supplemental term life insurance
Its supplemental term life insurance allows employees to increase coverage and/or add coverage for family members (at the employee's expense). In addition, Principal offers salary-based (also called percentage of salary) and increment-based. Supplemental life insurance can be an easy choice if you're looking for cheap life insurance.
Universal life insurance
Lifelong coverage that builds cash value to withdraw when needed is the cornerstone of universal life insurance. Unlike whole life policies, the death benefit or funds you can access change over time. The longer you live, the more your payment will be when you file a claim.
Principal offers seven types of universal life insurance (including indexed and variable options) for business owners keen on protecting valuable assets and providing for loved ones.
- Principal Universal Life Provider Edge II provides affordable, permanent coverage coupled with long-term guarantees from $100,000 to $1 million. High limits are available without a medical exam to qualifying buyers between 20 and 85.
- Principal Universal Life Flex III provides flexible coverage and the potential for accelerated cash value growth, especially during years 15-30. Coverage amounts range from $25,000 to $1 million. Qualifying individuals between ages 0 and 85 can buy without a medical exam.
- Principal Survivorship Universal Life provides affordable long-term coverage for two policyholders from $250,000 to $1 million. The youngest buyer must be between 20 and 85. The second buyer can be 90 years old.
Principal's survivorship option is ideal for estate, special needs, and business succession planning. It's common for couples looking to keep the policy open for the surviving spouse for continued growth and use.
Indexed universal life insurance
The cash value of this permanent life insurance product rises and falls with an index like the S&P 500. A bonus is loans or early withdrawals. But, of course, early withdrawals not repaid will reduce the death benefit.
- Principal Indexed Universal Life Flex II provides flexible coverage coupled with the potential for accelerated cash value growth. The minimum death benefit is $100,000 for individuals aged 20-85.
- Principal Indexed Universal Life Accumulation II provides long-term growth and income for individuals aged 20-85. The minimum death benefit is $50,000.
Variable universal life insurance
The increased flexibility of variable universal life insurance allows those with long-term insurance, investment, and tax-planning needs to play an active role in their financial future. Cash-value components vary based on premiums, fees and expenses, investment performance, and the total value of loans/withdrawals. This is one of the most profitable types of life insurance for serious planners.
- Principal Variable Universal Life Income IV provides death benefit protection plus supplemental income for individuals aged 0-70 with a minimum death benefit of $100,000. This option is a good fit for high earners, individuals who have maxed out their 401(k) contributions, and those who do not qualify for a Roth IRA.
This policy comes with no limits on earnings/losses. The lack of limits equates to a higher potential for growth and greater risk. - Principal Executive Variable Universal Life III provides long-term cash value growth with a minimum death benefit of $100,000 for individuals aged 20-75. This policy offers a death benefit guarantee through age 85. It is specifically designed to meet the needs of business owners. It has zero limits on earnings/losses for higher growth potential and greater risk.
Additional coverage options from Principal Financial
Insurance riders offer supplemental coverage extending beyond the parameters of a base policy.
- Accelerated benefits rider allows the insured access to a portion of their total death benefit (up to $1 million) if diagnosed with a terminal illness.
- Cost of living increase rider allows the insured to keep pace with inflation by offering increased coverage minus the hassle of additional underwriting.
- Extended coverage rider allows for extended coverage, to the date of death, for individuals who live beyond age 121.
- Lapse protection rider allows the insured to determine the lapse protection guarantee period to suit their individual needs.
- Children term insurance rider provides coverage to the insured's eligible children from 15 days to 17 years in amounts ranging from $5,000-$25,000. For those asking is child life insurance worth it, this rider offers an affordable option to say yes.
- Salary increase rider offers the option of increasing life insurance coverage to match your rising salary.
- Waiver of monthly policy charge rider provides a waiver for coverage charges should the insured becomes disabled.
How much does life insurance from Principal Financial cost?
The company's solid financial banking equates to competitive rates for life insurance products. As a result, some are cheaper than average, even with common conditions like asthma and diabetes.
Grant from American Fork, Utah, left a review on BestCompany saying, "We have had
How do I file claims with Principal Financial?
The employer must initiate the claim via a secure online form. The beneficiary is then responsible for completing this form. For multiple beneficiaries, each must submit a separate claim form.
Once complete, submit it to the company as follows:
Principal Life Insurance Company
Attn: Group Life and Disability Claims Department
711 High Street
Des Moines, IA 50392-0002
Fax: 1.800.255.6609
Email: SBDClaims@principal.com
Phone: 1.800.245.1522
Who are the ideal customers for Principal Financial?
For individuals without existing life insurance coverage, an employer-provided life insurance policy from
Still, relying solely on this life insurance coverage comes with inherent risks. The most significant restriction when it comes to employer-provided term life insurance is the term (or specific length of coverage) often goes hand-in-hand with the period of employment. When you separate from the company, your coverage will lapse.
Furthermore, coverage tends to be based on some multiple of the insured's annual salary or position within the company. So it's essential to determine if coverage is sufficient or if an additional layer of protection is needed.
Compare Principal Financial vs. Prudential
However, Prudential also offers PruTerm (year-by-year coverage up to $10 million for individuals ages 18-85). This far outpaces the products available with Principal Financial.
Prudential offers group term life insurance to protect employees' loved ones in the case of the insured's premature death. Both companies provide comparable options for universal life insurance, including indexed and variable ULI, and similar minimum coverage between $50,000-$100,000. However, individual buyers can only buy from Prudential.
Principal Financial scored 772 (out of 1000) on the latest
Conversely, customer complaints on Consumer Affairs run the gamut from needing help submitting recurring payments to lengthy claims processes and delays in paying benefits. Sites like Consumer Affairs also have widespread reports of poor customer service.
Compare Principal Financial vs. New York Life
New York Life earns high marks for financial stability and customer service. In addition, it's known for its extensive individual policies for a comfortable retirement, increased generational wealth, and more.
Individuals like Kathy of Irvine, CA, on ConsumerAffairs have positive feedback, stating, "The New York Life Insurance agent and representatives I've had the pleasure of communicating with were always professional and knowledgeable. This was especially true after the passing of a loved one and the required paperwork needed for disbursement of funds."
Individual experiences vary, and some customers also complain about unresponsive agents. However, New York Life representatives are often knowledgeable about competitive products. In addition, agents are well-prepared to assist you if you have questions about loans, early withdrawals, etc.
Compare Principal Financial vs. Primerica
Some employers look into term life insurance products. The idea is to cover employees during their prime working years that would serve the employer. At this time,
As one of the country's largest term life insurance providers, it offers potential customers a needs-based analysis to determine the appropriate death benefits. Primerica utilizes independent contractors (not full-time employees) to execute the company's multi-level marketing structure. As a result, it's common for customers to buy via family and/or friends.
That said, Adrian of Pico Rivera, CA, left a review on ConsumerAffairs left a review saying, "I would've never thought we would've gotten paid out since we had just done the application, never even did our physical. But yet 3 days later my agent showed up to my doorstep with our check for $250,000."
Methodology
When comparing life insurance companies, we use myriad factors, from customer service, pricing, and net performance scores to product quality and insurance riders. Information regarding numerous life insurance products is used in the process. The opinions here are based entirely on facts gleaned from research.
No rating is based on marketing tactics or standalone online reviews. When shopping for life insurance to meet your needs, we recommend seeking the advice of a qualified agent. You can read more about our rating system here.
FAQs
Why do I need life insurance via my employer or otherwise?
Life insurance benefits promise peace of mind and can be used to cover a wide range of financial needs following the death of a loved one. Current policies also offer the option to prepare for your future. Accelerated death benefits associated with terminal illnesses and life insurance loans have become increasingly common.
What is group insurance?
Group insurance offers benefits that cover a group of people, in most cases, employees. For many employers, group term life insurance is a valuable part of their benefits package.
How do I remove a former employee from a group plan as an employer?
Once an employee leaves your company, notify Principal right away with details regarding reasons for termination. Claimants can do this online by visiting the Member Information section in their account or emailing GroupBenefitsAdmin@principal.com.
Can former employees continue group coverage?
In most cases, when an employee leaves a company, their benefits end. With Principal group term life insurance, employees may continue coverage within a limited period after employment ends, usually 31 days. As soon as group coverage ends, ask your employer about other enrollment options for which you might be eligible.