Life insurance is a crucial component of any financial plan as it helps to provide financial security to your loved ones in the event of your unexpected death. With so many different life insurance options available, it can be challenging to choose the best policy that meets your specific needs.
In this article, we will be focusing on Principal Life Insurance, one of the leading life insurance providers in the United States. Our goal is to provide you with a comprehensive review of Principal Life Insurance, including its policies, benefits, and drawbacks, to help you make an informed decision when selecting a life insurance policy.
So, let’s dive into the world of Principal Life Insurance and explore what it has to offer.
About Principal Life Insurance
Principal Life Insurance is a leading provider of insurance and financial products and services in the United States. The company has a long and rich history that spans over 140 years, dating back to its founding in 1879.
Originally established as Bankers Life Association, the company changed its name to Principal Financial Group in 1985. Today, Principal Life Insurance is a subsidiary of Principal Financial Group and operates as one of its primary businesses.
The company is headquartered in Des Moines, Iowa, and has a strong presence in the United States as well as globally, with operations in 18 countries worldwide. Principal Life Insurance is committed to providing its customers with a wide range of products and services, including life insurance, retirement solutions, and investment management.
Principal Life Insurance offers various types of life insurance policies to meet the needs of its customers. These include term life insurance, whole life insurance, and universal life insurance. Term life insurance provides coverage for a specified period of time and is generally the most affordable type of life insurance. Whole life insurance, on the other hand, provides coverage for the entire life of the insured and also includes a savings component that accumulates cash value over time. Finally, universal life insurance offers flexible premiums and death benefits, along with the potential for cash value growth.
Overall, Principal Life Insurance is a trusted and reputable company that has been providing financial solutions to its customers for over a century. With a wide range of life insurance policies available, customers can find the coverage they need to protect themselves and their loved ones.
Types of Life Insurance Sold by Principal
Principal term life insurance
Principal offers four types of term life insurance: term life for individuals and businesses and guaranteed issue term life, group term life and voluntary term life for businesses.
Principal Term is targeted toward individuals and businesses. It is offered in 10-, 15-, 20- and 30-year terms with a $200,000 minimum. Depending on the term duration selected and health classification, issue ages for this policy range from 20 to 80.
Principal offers guaranteed issue term life insurance, called Guaranteed Issue Term II, that business owners can use for themselves and key employees. Coverage up to $5 million per policy is available, with level premiums for 10 or 20 years.
Some group life insurance policies from Principal come with access to some helpful benefits, which include a will and legal document center, an emotional health support line and an identity theft protection kit.
Principal also offers group term life insurance that you can offer to your employees. You can choose to pay all, part or none of the group life insurance premiums for your employees, depending on your business budget. Additionally, you can offer Principal’s voluntary term life, which allows employees to increase their coverage at their expenses and/or add life insurance for their dependents.
Principal’s universal life insurance
Universal life insurance might be a good fit for you if you’re looking for lifelong coverage. When you have a policy that builds cash value, you can withdraw or take loans from the cash value for any reason.
Principal Universal Life Flex III offers flexible death benefits and premiums, and the potential for cash value accumulation. The death benefit is offered in three ways:
- Face amount by itself
- Face amount plus cash value
- Face amount plus premiums paid, minus loans and partial surrenders
You can withdraw or borrow against the cash value you accumulate.
Coverage amounts range from $100,000 and up for businesses and from $25,000 and up for individual buyers. People ages 0 to 85 may apply. Those who qualify can get a Universal Life Index III policy without a life insurance medical exam.
Principal Universal Life Flex III offers a guaranteed minimum annual rate of 1% for cash value accumulation.
Principal also offers Universal Life Provider Edge II for people ages 20 to 85. It has a minimum death benefit of $100,000. Those who qualify can get a Provider Edge II policy without a life insurance medical exam.
Principal also sells the Principal Survivorship Universal Life Provider policy. It covers two people under one policy and pays the death benefit when both individuals have passed away.
It’s ideal for those with legacy or estate planning needs, or for transitioning a business when a business owner has died. A big bonus: One applicant for the Survivorship Universal Life
Provider policy can be an uninsurable risk. That means the survivorship policy can be a vehicle for providing life insurance to someone who may otherwise not be able to buy coverage due to health issues.
Other key features of Principal’s survivorship life insurance include:
- Optional extended no-lapse guarantee means locked in coverage to the age of 100 for the youngest person on the policy.
- The survivor can tap into the death benefit if diagnosed with a chronic or terminal illness.
- Available for term conversions.
Principal’s indexed universal life insurance
Indexed universal life insurance may be worth considering if you’re looking for the potential to grow cash value based on an index, like an S&P 500 index. These policies also often have the flexibility to vary premiums and death benefits. Be sure to review the participation caps and fees so you’re fully aware of how the policy works.
Principal Indexed Universal Life Flex II is for people ages 20 to 85 and offers a minimum death benefit of $100,000. It gives you a flexible premium with death benefit protection in three options: fixed, increasing (based on cash value) and return of premium.
The Indexed Universal Life Flex II allows you to grow cash value based on the S&P 500 Price Return Index or the S&P 500 Total Return Index. Or choose a fixed-rate account. The policy’s cash value has a 0% growth floor and a growth cap never less than 3%.
Principal also offers another indexed universal life insurance product: the Indexed Accumulation II.
Principal’s variable universal life insurance
Variable life insurance is not a “set it and forget it” type of policy. Variable life insurance may be an attractive choice for those with long-term insurance, investment and tax-planning needs, and who are also comfortable having an active role in deciding investment options.
You can take withdrawals or loans from the cash value the policy accumulates, but the policy can lapse if the cash value amount gets too low to cover the fees that are charged each month by the insurance company.
The value of the cash value portion of a variable life insurance policy is based on premiums paid, fees and expenses charged by the insurance company, the performance of the investments and loans and withdrawals taken.
Principal sells two variable universal life insurance products—Executive VUL III and VUL Income IV. Both are designed to accumulate cash value based on market performance. There is no limit to earnings or losses, which means there’s the potential for bigger growth compared to other types of universal life insurance, but there is also a higher risk.
Other Types of Insurance Sold by Principal
Group accident insurance
Group accident insurance from Principal can be added to a benefits package and pays an up-front, lump-sum benefit to employees who are injured in an accident that’s covered by the policy.
Group accidental death and dismemberment (AD&D) insurance
Business owners can add Principal’s AD&D insurance to their group life insurance benefits package.
Group critical illness insurance
Principal’s critical illness insurance is another offering that business owners can add to group life insurance choices for employees. It pays out a lump-sum benefit if an employee is diagnosed with a qualifying critical illness.
Pros and Cons of Principal Life Insurance
Principal Life Insurance is a well-known insurance provider that offers a range of life insurance products to its customers. As with any insurance company, there are advantages and disadvantages to choosing Principal Life Insurance. Let’s take a closer look at the pros and cons of Principal Life Insurance:
- Financial stability: Principal Life Insurance has a strong financial rating, indicating their financial stability and ability to pay out claims. This provides customers with peace of mind knowing that their policies are backed by a financially secure company.
- Strong customer service: Principal Life Insurance is known for its excellent customer service, which includes a responsive claims process and helpful representatives who are available to answer questions and provide assistance.
- Competitive pricing: Principal Life Insurance offers competitive pricing on their life insurance products, making them an attractive option for individuals and families who are looking for affordable coverage.
- Flexible payment options: Principal Life Insurance provides policyholders with the flexibility to choose from a range of payment options, including monthly, quarterly, and annual payments.
- Limited policy customization options: One potential drawback of Principal Life Insurance is their limited policy customization options. They do not offer as many policy options or riders as some of their competitors, which may not meet the specific needs of some customers.
- Medical underwriting requirements: Like many life insurance providers, Principal Life Insurance requires applicants to undergo a medical exam and disclose their medical history. This can be a disadvantage for individuals with pre-existing medical conditions or who are in poor health.
In conclusion, Principal Life Insurance offers a range of benefits to its customers, including financial stability, strong customer service, competitive pricing, and flexible payment options. However, their limited policy customization options and medical underwriting requirements may not meet the specific needs of some customers. It is important for potential policyholders to weigh the pros and cons carefully and to compare Principal Life Insurance to other insurance providers before making a decision.
Principal’s Life Insurance Riders
Riders are supplemental coverage that can be added to a life insurance policy. Life insurance riders can tailor your coverage to better fit your needs and provide coverage in specific situations that your standard policy excludes. The riders available will depend on the policy you have, your age and your location.
Principal’s life insurance riders include:
- Alternate surrender value rider offers higher early cash surrender amounts for business-owned policies that can improve the company’s financial health.
- Business value increase rider offers face amount increases every three years based on increases in the value of your business.
- Change of insured rider allows you to switch from one insured person to another as long as the new person is under age 69 and doesn’t have any serious health conditions.
- Children term insurance rider adds coverage on a child.
- Chronic illness rider allows you to use your death benefit money immediately after being diagnosed with a chronic illness and use the money however you like.
- Cost of living increase rider allows you to increase your coverage—for an extra cost— every three years until age 55.
- Death benefit guarantee rider guarantees the policy will not lapse before age 85 as long as certain premium conditions are met.
- Enhanced cash surrender value rider can provide high cash-surrender values early in the life of your policy. It pays the net value of your policy plus an additional amount if the policy is fully surrendered.
- Extended no-lapse guarantee can keep your policy from lapsing regardless of the net cash value amount.
- Life paid-up rider is a safeguard that prevents your policy from lapsing when you take loans and withdrawals against the cash value.
- Salary increase rider allows you to annually increase your coverage as your salary increases without taking any additional medical exams.
- Terminal illness rider allows you to access a portion of your death benefit if you’re diagnosed with a qualifying terminal illness.
- Waiver of monthly policy charge rider applies if you have a qualifying disability—you no longer have to pay monthly charges.
Pricing and Coverage
Principal Life Insurance offers a range of pricing and coverage options to suit different needs and budgets. The cost of a policy can depend on several factors, including the age, health, and lifestyle of the insured, as well as the type and amount of coverage selected.
The company offers term life insurance, which provides coverage for a specific period, typically between 10 and 30 years. Principal Life Insurance also offers permanent life insurance, which provides coverage for the insured’s entire life and includes an investment component.
In terms of pricing, Principal Life Insurance’s premiums are generally competitive compared to other major life insurance providers. However, the actual cost of a policy will depend on several factors, including the type and amount of coverage selected, as well as the insured’s age, health, and lifestyle.
When it comes to coverage, Principal Life Insurance offers a range of options to suit different needs. For example, term life insurance policies can be customized to provide coverage for a specific period, such as the length of a mortgage or until children are grown and no longer financially dependent.
In addition, Principal Life Insurance offers several riders that can be added to policies to provide additional coverage, such as accidental death and dismemberment coverage or coverage for terminal illness.
To compare Principal Life Insurance’s pricing and coverage to other major life insurance providers, it’s important to consider factors such as the type and amount of coverage offered, as well as the insurer’s financial strength and customer satisfaction ratings. A thorough analysis of these factors can help individuals make an informed decision when selecting a life insurance provider.
Customer Reviews and Ratings
Customer reviews and ratings are an important factor to consider when evaluating the quality of a life insurance provider. The feedback and opinions of current and past customers can provide valuable insight into the strengths and weaknesses of a company, as well as how they treat their policyholders.
In regards to Principal Life Insurance, the company has received mixed reviews from customers. Some customers have praised the company for its excellent customer service, affordable premiums, and reliable payouts. These positive reviews often highlight the ease of the claims process and the helpfulness of the company’s representatives.
However, there are also several common complaints that have been raised by customers regarding Principal Life Insurance. One of the most frequently mentioned issues is delays in the claims process, with some customers reporting long wait times and difficulty in getting their claims approved. Some customers have also expressed frustration with the company’s lack of transparency and communication, particularly when it comes to policy changes and updates.
Despite these complaints, Principal Life Insurance has maintained an overall positive rating among customers. The company has received high marks for its financial stability and strong financial ratings, which suggest that they are a reliable and trustworthy provider of life insurance policies.
In conclusion, customer reviews and ratings provide important insights into the strengths and weaknesses of Principal Life Insurance. While there are some common complaints among customers, the overall consensus suggests that the company is a solid choice for those seeking life insurance coverage.
In conclusion, we have discussed the key features and benefits of Principal Life Insurance, as well as some potential drawbacks to consider. We found that Principal Life Insurance offers a wide range of coverage options and competitive pricing, making it a strong choice for those seeking life insurance coverage. Additionally, Principal’s financial stability and strong customer service reputation provide added peace of mind to policyholders.
However, it’s important to note that Principal Life Insurance may not be the best fit for everyone, as certain individuals may require more specialized coverage options or may find more affordable rates elsewhere. Ultimately, the decision of whether or not to choose Principal Life Insurance will depend on your specific needs and priorities.
Overall, we believe that Principal Life Insurance is a solid option for those seeking life insurance coverage and would recommend considering them when shopping for life insurance policies.