Principal Financial Life Insurance Company Review
by Jim Tobin, CFP®
Bequest Mutual Rating
Please note the Bequest Mutual is not in any way affiliated with Pricipal Financial. This article is our personal review of the term life insurance product offered through Principal Financial as well as alternatives. If you are looking to contact Principal Financial directly, call them at 800-331-2213. If You need help with a lost policy, contact the NAIC policy locator service.
Principal Financial Life Insurance Carrier Specifics
Term, Universal Life
A+ - A.M. Best
No Exam Option
Expert Review Of Available Options For Life Insurance with Depression
This Principal Financial life insurance review will address the primary points of comparison between life insurance carriers. Specifically, this review will address company history, financial ratings, product offerings, underwriting niches, pricing and customer service.
Principal Financial Life Insurance Company History
One of the nations older life insurance carriers, Principal Financial Life Insurance Company began as famed financier Edward Temple's Bankers Life Association in 1879.
While Principal Financial Group has evolved into a significant financial services company with over 600 billion in assets under management, life insurance remains a driving force in their business model.
Principal Financial Life Insurance Financial Ratings
Principal Life Insurance Products
Term Life Insurance
Principal offers fixed term life insurance in 10, 15, 20 and 30 year terms. Principal is best known for underwriting policies up to 1 million dollars with no medical exam. These policies are not a fit for everyone, as you need to be scored as "preferred" or "preferred plus" to qualify. Nonetheless, being that they are priced as fully underwritten, it is a huge leap forward in the world of insurance underwriting.
Universal Life Insurance
The Principal Financial Life Insurance Company offers several "flavors" of universal life insurance, including a a traditional UL, an indexed UL and a variable UL. The traditional model is tied to interest rates, the variable UL is tied directly to the equities markets and the popular indexed is a hybrid that credits interest based on stock index performance but is not actually a security instrument like the VUL. While much safer now, universal life has a tumultuous history, you can read about here??.
Although the Bequest Mutual is dedicated to discussing life insurance options, we'd be remiss if we didn't mention the Principal is a significant player in the annuity marketplace. Principal offers annuities in fixed, variable , immediate and deferred options. In fact a visit to the home page prompts questions about rolling over an old 401k.
Principal Life Insurance Riders
Available term policy riders include:.
- Children’s insurance: $5,000 to $25,000.
- Conversion extension
- Waiver of premium for Disability
- Accelerated benefit
- Extended no-lapse
- Cost of living increase
* Riders are not available on all plans*.
Additionally there is a privilege to convert to permanent coverage without proof of insurability. Conversion privileges vary with product.
Principal Financial Life Insurance Rates
Principal Life Insurance tends to be priced competitively, slightly more than the usual price leaders. However, pricing is not always "apples to apples. Rather, it comes down to the underwriting class a specific carrier assigns you.
For instance if Principal, after applying "lifestyle credits" for using a CPap to treat sleep apnea, rates a moderately overweight 53 year old man "standard " while other "better priced" companies rate him as Table 2, the more expensive Principal is the better deal.
So as you can see in this example , the final price has just as much to do with the underwriting decision as it does with the rates you see on quote tools.
Prudential will always be viewed as "more expensive", but sometimes there is more to the story than meets the eye.
Prudential Underwriting Highlights
Unlike some of the other carriers we have reviewed, Principal uses a healthy lifestyle crediting system that allows for better ratings for people with a medical history that have taken proactive steps to become healthier.
Principal tends to be more lenient than many carriers with respect to build charts, and family history with the exception of death from cardiovascular disease, stroke or diabetes before age 60.
Additionally, Principal is tolerant of cholesterol & blood pressure medications.
For these reasons Principal is worthy of a look certain situations.
Principal No Exam Options
The accelerated underwriting program discussed earlier, that allows for up to 1MM with no blood or urine is a niche of sorts , but the rest of the industry is working hard to catch up with similar products. However, until they get there Principal is a leader in no exam policies up to a million dollars.
Principal Life Insurance Customer Service
The NAIC complaint report shows a spotless record for Principal for the most recent year. This is materially better than the national average of 1 percent.
J.D. Power & Assoc. rank Principal 4/5. The Better Business Bureau grades A+B- for Principal.
Principal Financial Contact Information
Principal Financial: Final Thoughts
Principal is a solid carrier with a strong history and strong financial ratings. Regardless of your need Principal is worthy of consideration.
The accelerated underwriting program is one of the few in the industry that will go to a million dollars of coverage.
alternatives to Principal
In cases where Principal is not among the most competitive rate (for example tobacco users), there are over 50 carriers available at the Bequest Mutual. Whether it's a condition that Principal chooses not to see more favorably than others or an accelerated underwriting option you are looking for, the Bequest Mutual will be happy to help you get the best deal possible.
Your Next Step
Bonus: The most common mistakes people make buying life insurance and how to avoid them