Principal Financial Insurance review

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Originally founded 140 years ago, Principal Financial was founded in 1879. Today, Principal Financial is a FORTUNE 500 member with $807 billion in managed assets, serving over 34 million customers in 25 different nations and territories. This venerable insurer enjoys a long-standing reputation for reliable life insurance coverage and offers a few different types of policies.

No one likes to think about their death, but failing to do so could mean placing a financial burden on your loved ones when you pass away. Principal life insurance coverage can help mitigate this financial risk by providing a death benefit that can cover funeral expenses and debts after you pass away. Bankrate’s Principal Financial insurance review takes a deep dive into Principal Financial products and services to help you find the right coverage for you and your family.

Principal Financial life insurance

Principal life insurance includes both term and permanent life insurance policy options. As the name suggests, term life insurance is only good for the term stated in the policy. These policy terms usually last anywhere from 10 to 30 years, but some companies let you buy a policy year by year. A term life insurance policy can be useful if the policyholder dies within the policy’s term. Principal Financial suggests its term life for a variety of purposes, from growing families to first-time insurance buyers.

A permanent life insurance policy doesn’t have an expiration date — it lasts throughout the life of the policyholder, so long as the premiums are paid. This kind of life insurance coverage can also have a cash value that gains interest as premiums are paid. Some permanent life insurance policies even allow policyholders to take out loans against the policy’s value. Principal Financial offers permanent life insurance coverage that is recommended for several purposes, such as support for a spouse or family or protection for those nearing retirement.

We’ll go through each option to see how they stack up.

Types of life insurance policies offered

Term life insurance policy Principal life insurance coverage includes one main term life insurance policy. This insurer’s term policy comes with term options of 10, 15, 20 or 30 years. Principal Financial also gives policyholders the option to sign up for a one-year term if they only need life insurance for a short timespan. A term life insurance has no cash value aside from the benefit paid upon death within the term limit. Policyholders have the option to convert their term policy to a permanent policy, which includes a cash value.

Universal life insurance policy This is the first of four different permanent life insurance policies offered by Principal Financial. A universal policy allows you to adjust the benefits and premiums while the policy is active. These adjustments can be very helpful as life situations change. With a universal policy, you’ll accumulate a cash value, but the interest rate can change quite a bit over the policy’s lifetime.

Indexed universal life insurance policy This is a form of universal life insurance coverage for investment-savvy policyholders. Like a regular universal policy, an indexed universal policy accumulates a cash value based on interest. But the difference is the cash value’s interest is partly linked to the gains and losses of a stock market index. The cash value included in the policy also accumulates tax-free.

Variable universal life insurance policy This is another variation on a universal life insurance policy. Similar to an indexed universal policy, a variable universal policy focuses on investments. With a variable universal policy, you could use the policy’s cash value to directly invest in stocks and mutual funds using sub-accounts within the policy. These policies can be fairly complicated and require significant research.

Survivorship insurance This is a restricted form of life insurance that covers two lives. The benefits associated with the policy are only paid out to beneficiaries “upon the death of the second life.” Some people chose survivorship insurance for estate planning.

Where does Principal Financial operate?

Principal Financial is a widespread company with office locations throughout the world. Based in Des Moines, Iowa, it sells life insurance,in addition to other products like IRAs, annuities and mutual funds.

As a large global player, it operates as Principal International, Inc. throughout Latin America and Asia. Under the Principal Global Investors name, it handles retirement assets and real estate investments in the U.S. and throughout the world, including Europe and Australia.

Principal Financial ratings, reviews, customer satisfaction and complaints

Principal Financial is a Fortune 500 company with a good reputation. It rates above-average in 2020 J.D. Power Life Insurance Study, falling within the top 10 life insurance companies for customer satisfaction in the U.S. Its mobile app also comes highly rated, earning a 4.8 out of 5.0 rating on the App Store and a 4.6 out of 5.0 rating on Google Play.

Principal Financial has been selling insurance policies for well over a century and the company enjoys positive financial ratings from top professional organizations, including an A+ (Superior) rating from AM Best, an A1 rating from Moody’s and an A+ rating from Standard and Poor’s (S&P).

Reasons why Principal Financial is a good option

Although Principal does not sell other kinds of insurance policies outside of life and medical, it could provide a great option for those looking to care for their loved ones after their death. One of the first things people need to know about their life insurer is if the company is solvent and has the ability to pay out claims. With top financial ratings and more than 140 years in the business, Principal Financial is likely highly reliable in paying claims. It also scores well for customer satisfaction, showing that policyholders are likely to feel sufficiently covered in a pinch.

The other advantage of Principal Financial is the variety of policy options geared toward people in different stages of life. For example, term life insurance may be great for young people who can typically get lower premiums based on good health. The term policy can often be converted to a permanent policy later on. Additionally, survivorship insurance could be very helpful for older folks who did not get around to purchasing life insurance earlier in their lives.

Additional policies offered by Principal Financial

Aside from life insurance, Principal Financial mostly deals in global financial investment management, so they don’t offer much in terms of individual insurance policies for things like auto and home. However, the company does offer quite a few products focused on retirement planning and long-term investing.

Frequently asked questions

How do I get a quote for Principal Financial Life Insurance?

Principal Financial makes getting a quote on the cost of life insurance easy. Check out the provider’s online quote tool to get a fast estimate of how much a policy might cost. Keep in mind that the actual policy’s cost may be different than the quote.

What is a life insurance policy’s death benefit?

When a life insurance policyholder dies, the policy may issue benefits to the beneficiaries listed in the policy. This is known as the policy’s death benefit. It’s usually a lump-sum amount that’s listed in the policy, and the amount is usually taxed differently than lump-sums paid in other situations.

What’s the best life insurance company?

The best life insurance company will depend on what you’re looking for from your life insurance policy. Some people may want a cheap term life policy, while others may want a high-premium variable universal policy for investing purposes. After you know what you need out of your policy, it’s a good idea to shop around for a few quotes from different providers to find the one that works best for you.

Written by
Julian Dossett
Insurance Contributor
Julian has three years of experience writing for insurance domains including Bankrate, NextAdvisor with TIME, The Simple Dollar, Reviews.com, and Coverage.com. He writes about auto, home, and life insurance.
Edited by
Insurance Editor