Quick Answer: Principal Life Insurance Company is a solid, financially stable insurer offering term, universal life, indexed universal life (IUL), and variable universal life (VUL) products. They’re particularly strong for business owners and high-income professionals seeking coverage of $1 million or more. With A+ ratings from A.M. Best and accelerated underwriting options, Principal works well for healthy applicants who want permanent coverage with cash value potential.
If you’re researching Principal Life Insurance, you’re probably wondering whether they’re the right fit for your situation. Maybe you’ve seen their name pop up in quotes, or your employer offers their group coverage. Either way, you want to know: Is Principal actually good, or just another big name?
We’ve worked with Principal policies for over 30 years, and here’s our honest take. They’re a strong carrier with competitive products, especially in the business market. But they’re not the best choice for everyone. Let’s break down what they offer, who they work best for, and where they might fall short.
Principal Life Insurance Company Background
Principal Financial Group has been around since 1879, making them one of the oldest life insurance companies in the country. They started as Bankers Life Association in Iowa, survived the Great Depression, and grew into a global financial services company.
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Today, Principal serves tens of millions of customers worldwide, including retirement plan participants and insurance clients. They employ over 20,000 people and are headquartered in Des Moines, Iowa. They’ve earned recognition as one of the World’s Most Ethical Companies multiple times from Ethisphere.
What sets Principal apart from many competitors is their focus on the business market. They’re not just selling life insurance to individuals. They specialize in business planning solutions like key person insurance, buy-sell agreements, and executive benefits. If you’re a business owner or key employee, this focus can work in your favor.
Principal Life Insurance Company Ratings
Financial strength matters when you’re buying life insurance. You need to know the company will be around to pay claims decades from now.
Principal earns high marks across the board. A.M. Best gives them an A+ (Superior) rating, which puts them in the top tier of insurers. Standard & Poor’s rates them A+ (Strong), and Fitch assigns them AA- (Very Strong). They also hold an A+ rating from the Better Business Bureau.
These ratings tell us Principal has the financial muscle to pay claims well into the future. That’s not something you can take for granted with every carrier.
Principal Life Insurance Products
Principal offers a full lineup of life insurance products, from simple term coverage to sophisticated cash-value policies. Here’s what’s available:
Term Life Insurance
Principal’s term life insurance provides straightforward death benefit protection for 10, 15, 20, or 30 years. It’s their most affordable option and works well for temporary needs like covering a mortgage or protecting your family while kids are young.
The minimum face amount is $200,000, and they target applicants ages 35-55 with coverage needs of $1 million or more. One nice feature: qualified applicants can get coverage up to $3-5 million through their Accelerated Underwriting program without a medical exam.
Principal offers both convertible and non-convertible term policies. The convertible option lets you switch to permanent coverage later without proving insurability again. That’s valuable flexibility if your needs change. Learn more about how term conversion works.
Universal Life Insurance
Principal offers two universal life products designed for different goals.
UL Provider Edge II focuses on affordable, long-term protection. It’s built for people ages 45-70 who want permanent coverage with guarantees. The optional Extended No-Lapse Guarantee rider can protect your policy to age 100. Minimum face amount is $100,000.
UL Flex III emphasizes cash value growth, particularly in policy years 15-30. This product works better if you want flexibility and the option to access cash value later. It’s also competitive for policy endowment situations where you’re planning to surrender the policy eventually.
Indexed Universal Life Insurance (IUL)
If you’re interested in cash value growth tied to market indexes, Principal offers two IUL options.
IUL Flex II provides flexible coverage with the potential for higher interest earnings than traditional universal life. What makes it unique is the S&P 500 Total Return index-linked account, which includes the value of reinvested dividends. That’s not something every carrier offers. Target ages are 35-65 with moderate funding levels.
IUL Accumulation II is designed for maximum funding and long-term growth. It offers three S&P 500 index-linked accounts and competitive target premiums. This product works best for ages 35-55 who plan to contribute as much as possible and want income distribution options later.
Both IUL products include downside protection on your principal. Your cash value won’t lose money when the market drops, though there are caps on how much you can earn when markets rise. Our complete guide to indexed universal life explains how these policies work in detail.
Variable Universal Life Insurance (VUL)
For clients comfortable with market risk, Principal offers two VUL products.
VUL Income IV provides long-term, market-based cash value growth with over 70 investment options. It includes dollar-cost averaging accounts and a death benefit guarantee to age 65. This product targets high-income earners ages 35-55 who can over-fund the policy and have moderate-to-high risk tolerance.
Executive VUL III is exclusively for business-owned or sponsored solutions. It offers more than 100 investment options and a death benefit guarantee to age 85. This works for businesses using executive benefits to recruit and retain key employees.
Survivorship Universal Life Insurance
Principal’s Survivorship Universal Life Provider covers two people under one policy. The death benefit pays out after the second insured passes away.
This product works well for estate planning because it can help cover estate taxes or leave a legacy to heirs or charity. One unique feature: one of the two insureds can be uninsurable. The minimum face amount is $250,000, and you can add an Extended No-Lapse Guarantee to age 100 of the younger insured.
Who Is Principal Best For?
Based on our experience, Principal works particularly well for:
Business owners and key employees. Principal’s focus on the business market means they understand buy-sell agreements, key person coverage, executive benefits, and deferred compensation strategies. Their Business Market Administration platform makes managing multiple policies easier.
Healthy applicants seeking large coverage amounts. If you need $1 million or more in coverage and you’re in good health, Principal’s Accelerated Underwriting can get you approved faster without medical exams.
People interested in IUL with unique index options. The S&P 500 Total Return index account sets Principal apart from some competitors. If that feature appeals to you, it’s worth getting a quote.
Couples needing survivorship coverage. The ability to insure two people, even when one is uninsurable, gives Principal an edge for estate planning situations.
Principal Life Insurance Pros and Cons
What we like:
Principal’s financial strength ratings give us confidence they’ll be around long-term. Their Accelerated Underwriting program can save time for healthy applicants. The business market focus means they understand complex planning situations. Their IUL products offer competitive features, and the survivorship policy flexibility is genuinely useful.
What could be better:
Principal isn’t always the most price-competitive carrier for straightforward term coverage. Their products tend to work best at higher face amounts ($1 million+), so smaller policies might find better rates elsewhere. And their agent network isn’t as extensive as some larger carriers, which can make getting quotes more difficult without an independent agent.
How to Get Principal Life Insurance
You won’t find Principal selling directly to consumers online. They work through independent agents and financial professionals. That’s actually good news because it means you can work with someone who can compare Principal against other carriers to find the best fit for your situation.
If you’re interested in a Principal policy, working with an independent agent who represents multiple carriers gives you options. We can run quotes from Principal alongside other A-rated carriers to see where they’re most competitive for your specific needs. You can learn more about their products directly at Principal’s official website.
Frequently Asked Questions
Is Principal Life Insurance a good company?
Yes. Principal is a financially strong, well-established carrier with over 140 years of history. Their A+ rating from A.M. Best and recognition as one of the World’s Most Ethical Companies support their reputation. They’re particularly strong for business market coverage and permanent life insurance products.
What types of life insurance does Principal offer?
Principal offers term life insurance (10, 15, 20, and 30-year terms), universal life, indexed universal life (IUL), variable universal life (VUL), and survivorship universal life. They also provide various riders to customize coverage, including chronic illness and terminal illness benefit advances.
Does Principal require a medical exam for life insurance?
Not always. Principal’s Accelerated Underwriting program allows qualified applicants to get coverage up to $3-5 million without a medical exam. Eligibility depends on age, health history, and coverage amount. Applicants who don’t qualify for accelerated underwriting can still apply through traditional underwriting with an exam.
What is the minimum coverage amount for Principal life insurance?
Minimum face amounts vary by product. Term life requires at least $200,000. Universal life products start at $50,000-$100,000 depending on the specific policy. Survivorship universal life requires a minimum of $250,000.
Is Principal life insurance expensive?
Principal’s pricing is competitive, especially for larger face amounts and healthy applicants. They’re most price-competitive for coverage of $1 million or more in non-tobacco risk classes. For smaller policies or standard risk classes, other carriers may offer lower rates.
Key Takeaways
- Strong financial ratings — Principal earns A+ from A.M. Best, A+ from S&P, and AA- from Fitch, indicating excellent claims-paying ability.
- Business market expertise — Their focus on key person, buy-sell, and executive benefit solutions sets them apart for business owners.
- Accelerated underwriting available — Qualified applicants can get up to $3-5 million in coverage without medical exams.
- Competitive IUL options — The S&P 500 Total Return index account offers unique growth potential with downside protection.
- Best for larger policies — Principal is most competitive for face amounts of $1 million or more.
Want help figuring out if Principal is right for your situation? We can compare their products against other top-rated carriers to find the best fit for your needs and budget. No pressure, just honest guidance based on 30+ years of experience.
