Principal Life Insurance Review

Principal offers life insurance with various riders at reasonable rates to suit your needs. Term, universal, index universal and variable universal life insurance from Principal can shield your beneficiaries from financial distress after your passing. Our review also found that the provider has decent customer satisfaction.

By Mark Fitzpatrick

Edited by Kathryn Schroeder

Updated: November 5, 2024

Advertising & Editorial Disclosure

MoneyGeek’s Take: Is Principal Right for You?

Principal provides a wide selection of term, universal, index universal and variable universal life insurance with a variety of riders, allowing you to select an option that fits your family’s life insurance needs. The insurer’s term life options cover different periods and have a maximum face amount of $1 million or more. Features for these policies vary based on your age and health risk factors, such as smoking.

Universal life insurance policies from Principal offer opportunities for business protection, employee benefits planning, dividend earning and acquiring of loans. However, you may get disappointed if you are looking for whole life protection since the company offers none. The provider may also not suit your needs if you need a low minimum face amount for your term life policy. For the best provider of whole life insurance, you may consider options from Northwestern Mutual.

Read further about Principal life insurance to choose your best policy option.

At a Glance: Principal Life Insurance

pros

Extensive selection of term life and universal life insurance policies

Receives very few customer complaints

Widely available in the United States

cons

Offers no whole life insurance policies

High minimum face amount on term life insurance policies

COMPANY HIGHLIGHTS

Principal is a global insurance provider founded in 1879 and is a member of the Fortune 500. The company offers retirement, insurance and investment plans to individuals and businesses, including individual and group life insurance protection.

Individuals who seek temporary or permanent life insurance coverage can find numerous options from this insurer, including:

Term Life, 10-Year, 15-Year, 20-Year, 30-Year
Principal Survivorship Universal Life Provider
Principal Universal Life Provider Edge II
Principal Universal Life Flex III
Indexed Universal Life
Variable Universal Life

Principal Life Insurance offers no whole life insurance policy. With its indexed universal life protection, you can earn dividends on your policy. The company also offers several riders, and its policies are available for individuals of most ages, up to 90 years.

From the National Association of Insurance Commissioners (NAIC), Principal’s customer complaint ratio is very low compared to the industry average. The company recorded only three complaints in 2022, resulting in a low ratio of 0.20. With a superior rating from AM Best, the provider also rates highly for financial stability, so it is more likely to process claims quickly.

TABLE OF CONTENTS

Is Principal Right for You?
At a Glance: Principal Life Insurance
Principal Life Insurance Policy Options Explained
Term Life Insurance Options From Principal
Universal Life Insurance Options From Principal
Principal Life Insurance Riders
How to Buy Life Insurance From Principal
What to Do if Principal Denies You Coverage

Key Takeaways

Principal provides universal and term life insurance policies with various add-on riders.

Index universal life insurance has the potential to earn insured individuals dividends.

Principal offers insurance options for risky groups, including tobacco smokers.

Principal Policy Options Explained

A 2022 Insurance Barometer Study from the Life Insurance Marketing and Research Association (LIMRA) disclosed a large shift to online life insurance purchasing and shopping rather than buying policies directly through agents. With Principal, you can identify various life insurance options with the best value.

Term Life Insurance Options From Principal

Term life insurance policies from Principal cover you for a defined period. Your beneficiaries only receive the death benefit if you pass away within the policy term.

Term Life, 10-Year, 15-Year, 20-Year, 30-Year

Principal offers fixed premiums for term life insurance with 10, 15, 20 or 30 years as the term duration. The policy covers individuals aged 20 to 80. It has a minimum face amount of $200,000 and $1 million or more as the maximum limit.

Term life policies from Principal are convertible to permanent life insurance. The Super Preferred, Preferred, Super Standard and Standard policies are available to non-tobacco users, while tobacco smokers can only access the Preferred and Standard policies.

Term life insurance policies from Principal feature accelerated underwriting and credits for policyholders who maintain a healthy lifestyle. You may consider a term life insurance policy from this provider if you need temporary coverage with a high face amount and the opportunity to convert to lifetime coverage. Luckily, the company has a few term life policy options for risk classes, including smokers.

Universal Life Insurance Options From Principal

Universal life insurance offers customizable premiums, lifetime insurance and the ability to grow your cash value through investments. Principal has the following options for those looking for universal life insurance coverage.

Principal Survivorship Universal Life (SUL) Provider

This policy offers long-term protection for two insured individuals with a coverage need of at least $1 million. To qualify, one of the insured parties must be in good health. The policy is available to individuals between 20 and 85 years for the younger insured, and the second insured can be up to 90 years at underwriting. The minimum face amount for this policy is $250,000.

Principal Universal Life Provider Edge (UL Provider Edge II)

This policy is for those seeking cheap protection with long-term benefits. The policy offers a minimum face amount of $100,000 and a maximum of $1 million plus. The insurance-eligibility age ranges from 20 to 80 for Preferred, Standard Tobacco, Super Standard and Standard Non-Tobacco policies and 20 to 85 years for Super Preferred Non-Tobacco. The policy offers low sensitivity to interest rate changes.

Principal Universal Life Flex III (UL Flex III)

With this policy, you will receive flexible coverage and better cash value within 15 to 30 years. It also has a maximum face amount of $1 million or more, with a minimum of $25,000 for individuals aged 19 years and below and $50,000 if you are between 20 and 85 years.

Indexed Universal Life

Principal has two indexed life insurance policies — Principal Indexed Universal Life Flex II and Principal Indexed Universal Life Accumulation II.

Principal Indexed Universal Life Flex II offers flexible coverage for high-interest earners with average funding levels. The policy has a minimum face amount of $100,000 and covers ages 20 to 85. It offers dividends that can be reinvested.

Meanwhile, Principal Indexed Universal Life Accumulation II offers long-term growth for those interested in funding their policy to the maximum. The policy features loan options for income flexibility and has three S&P 500 index-linked accounts.

Variable Universal Life Insurance

Principal’s Variable Universal Life Income IV and Executive Variable Universal Life III are variable universal life insurance options.

The Principal Variable Universal Life Income IV offers long-term cash value growth through 6- and 12-month enhanced interest dollar-cost averaging accounts. The minimum face amount is $100,000. Principal Executive Variable Universal Life III is for businesses that need flexibility regarding early cash surrender options and a death benefit guarantee until 85 years. It also has a minimum face amount of $100,000.

Principal’s universal life insurance policies can be beneficial if you are looking for business protection, survivor income, special needs planning and financial planning after maxing out a 401(k) or ineligibility for a Roth IRA, among other opportunities. The policies offer security while allowing you to grow your financial worth.

Principal’s Life Insurance Riders

Insurance riders can help increase your protection and may offer additional benefits to your loved ones. Depending on your needs, you can add the following life insurance riders to your Principal life insurance policy at an additional cost.

Rider	Description
Accelerated Benefit Rider	It is issued to individuals aged 20 to 80 years; this rider pays an accelerated death benefit if you get diagnosed with a terminal illness. The benefit amount will be less than the benefit cap or 75% of the eligible face amount, not exceeding $1 million.
Conversion Extension Rider	It expires at the end of the full level premium period or once the insured attains 70 years. Its purpose is to extend the standard conversion option to a longer period for changing a term policy to a permanent policy.
Waiver of Premium Rider	This rider expires at 65 years and waives the monthly premium if the insured gets completely disabled based on the rider’s guidelines.
Chronic Illness Death Benefit Advance Rider	Pays an accelerated benefit for individuals diagnosed with a chronic illness that results in cognitive challenges or inability to perform daily activities.
Cost of Living Increase	The rider increases the face amount without proof of insurability, depending on the increase in the Consumer Price Index.

How to Get Principal Life Insurance

MoneyGeek explains how to get started on the journey to obtain a life insurance policy from Principal. We also outline key steps to take if your application gets rejected in this section.

How to Buy Life Insurance From Principal

1
Do Your Research
Principal’s website contains vast information about its life insurance offerings. It may be more beneficial to conduct a detailed analysis of its policies to determine the plan type that works for your situation. You may also feel free to reach out to an insurance agent to discuss the options.
2
Compare Quotes
Your life insurance rates will vary depending on your health record, age, gender and other factors. Although you may have identified the perfect coverage from Principal, comparing quotes from other insurers may land you the best protection at a lower rate.
3
Health Check
Most life insurance providers conduct a health check as part of the underwriting process. If required by Principal for life insurance, you may need to go through the process and provide any additional documentation as requested before the company reviews your application.
4
Approval
If you are happy with the terms of coverage, you can enroll and start receiving coverage immediately, Reach out to a financial advisor or Principal with any further questions.

What to Do if Principal Insurance Denies You Coverage

You have several life insurance options available in case your application is rejected at Principal. Here are some initial steps to follow.

1
Contact Your Broker
Inform your life insurance agent or broker and discuss the details surrounding your rejected application. Not only will your agent provide you with the necessary feedback, but they will also help you to evaluate the available alternatives.
2
Lifestyle Changes
Changing your lifestyle can improve your well-being and, in return, boost your chances of being granted your ideal life insurance policy.
3
Explore Other Options
Review other insurance coverage options, such as choosing a policy with no medical exam requirement. However, you must know that some of these alternatives offer lower protection or may cost more than the initial policy you selected.

Frequently Asked Questions About Principal Life Insurance

To help you evaluate available life insurance options and navigate the application process of Principal, MoneyGeek responds to several frequently asked questions about the insurer.

Can you borrow from your Principal life insurance policy?

Yes, you can take loans from some of the Principal policies, such as the Principal Indexed Universal Life Accumulation II policy. Note, however, that if you do not repay the loan, your loved ones will have a reduced death benefit.

What’s the maximum amount of life insurance coverage available from Principal?

The maximum face amount for most of Principal’s life insurance policies is $1 million or more. However, the exact amount will vary depending on the policy type and features like your health record, age and lifestyle.

Do life insurance policies from Principal pay dividends?

Indexed universal life insurance policies from Principal pay dividends. The amount may vary based on the nature and number of index-linked accounts on the type of policy you select.

Can you get life insurance from Principal if you have cancer?

The Principal website does not clearly state whether life insurance is accessible if you have cancer, although several riders are available to benefit an insured individual with a terminal or chronic illness.

Do life insurance policies from Principal cover death by drug overdose?

Principal’s website is not specific on whether its policies cover death by drug overdose, but it has policies for tobacco users. You may need to find out from a company representative if a drug overdose is included in any of the policies.

Do life insurance policies from Principal cover death by suicide?

While it is not clear on the Principal website, most companies offer a suicide provision in some of their policies.

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About Mark Fitzpatrick

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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sources

Principal Life Insurance Company. "Individual Life Insurance." Accessed November 5, 2024.
Principal Life Insurance Company. "Term Life Insurance." Accessed November 5, 2024.
NAIC. "Principal Life Ins Co National Complaint Index Report." Accessed November 5, 2024.
LIMRA. "2022 Insurance Barometer Study." Accessed November 5, 2024.