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8.3 / 10

Principal Life Insurance Review

Principal offers competitive rates and faster-than-average application approval, including accelerated underwriting for qualified applicants.

Jennifer Pan

Jennifer Pan

Published November 27, 2019

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Principal

OVERALL

8.3

THE GOOD

    Competitive rates at every age

    Faster-than-average application approval

    Accelerated underwriting for qualified applicants

    High customer satisfaction ratings

THE BAD

    Fewer customization options

    Policyholders can’t update some information online

THE BOTTOM LINE

Principal offers competitive rates at every age bracket and favorable underwriting for a number of medical conditions. They’ve also earned high scores from several customer satisfaction boards and credit rating agencies.

Principal Financial is number 1 on Policygenius' list of the best life insurance companies, based on cost, financial confidence, third-party customer ratings, life insurance policy options, and ease of application.

Cost

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8.3

Confidence

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8.5

Customer Ratings

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8.3

Policy Options

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8.1

Customer Experience

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8.3

PRINCIPAL COMPANY SPOTLIGHT

4 of 5

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J.D. Power

A trusted customer satisfaction and product quality research agency

A+

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BBB

A nonprofit organization focusing on marketplace trust and product quality

A+

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A.M. Best

100-year-old U.S. credit rating agency focused on the insurance industry

IN THIS ARTICLE

The Details


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The Good

Competitive rates at every age. Principal offers competitive rates at every age bracket, as well as favorable underwriting for a range of common medical conditions, including high blood pressure, recent weight loss, and a personal or family history of cancer.

Faster-than-average application approval. Though the turnaround time for applying for life insurance will vary from person to person, Principal will generally return a decision about your life insurance application a little faster than other carriers.

Accelerated underwriting for qualified applicants. Principal offers accelerated underwriting for the healthiest applicants in several underwriting classes, up to coverage of $1 million. Wondering if you qualify? An agent or an independent broker like Policygenius can help you find out based on your medical history and lifestyle.

High customer satisfaction ratings. Principal earns high scores from customer satisfaction boards including J.D. Power and the Better Business Bureau (BBB). They also received fewer customer complaints than the industry average in 2018.

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The Bad

Fewer customization options. Compared to other insurers, Principal offers slightly fewer term length options and riders. However, they offer the most common riders, including accelerated death benefit rider at no extra cost.

Policyholders can’t update some information online. Principal customers will be able to change their payment information and address online, but will need to make a phone call to cancel their policy and mail in paperwork to change the policy’s beneficiary.

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The Breakdown

Cost

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8.3

The cost of a life insurance policy depends on several factors, including your age and your health, and Principal’s rates are competitive at every age bracket. They also offer favorable underwriting for eight of the most common health conditions cited on life insurance applications.

Below are Principal’s rates for a healthy, non-smoking man applying for a $500,000, 20-year term policy at different age brackets:

AgePrincipal averageIndustry average
20s$27.56$28.02
30s$29.14$32.06
40s$59.76$60.97
50s$146.13$152.00
60s$485.62$504.29

In addition to affordable rates for applicants in good health, Principal is also a good choice for people with more complex medical histories. They offer cheaper-than-average rates for some of the most common health conditions, including high blood pressure, recent weight loss, and a personal or family history of cancer:

Health ConditionPricing
Survivor/Family HistoryExcellent
Recent Weight LossExcellent
Heart AttackGood
DiabetesGood
Sleep ApneaGood
Former Tobacco UseGood
High Blood PressureExcellent
High CholesterolExcellent
  • Excellent - Above average; company provides excellent coverage for clients with this condition.
  • Good - Spot on; company doesn’t look at this condition unfavorably in underwriting.
  • Fair - Could use some work; clients with this condition may be issued a lower health rating, and subsequently higher rates than other insurers.

Confidence

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8.5

A life insurance policy is something that you’re likely to have for decades, so you’ll want to be sure that your insurance carrier is in good financial standing and will be able to pay out any death benefit your beneficiaries are owed in the future. Principal has been in business for over 140 years and, to date, has over half a million customers. They’ve earned high ratings from three major credit rating firms:

  • Number of policyholders: 600,000
  • Year founded: 1879
  • Standard & Poor’s: A+
  • Moody's: A1
  • A.M. Best: A+

Standard & Poor’s, Moody’s, and A.M. Best are financial ratings companies. These firms look at the financial strength of companies as a measure of how well they can handle future financial strength and meet the obligations of policyholders.

The highest ratings from each firm are:

  • Standard & Poor’s: AAA
  • Moody’s: Aaa
  • A.M. Best: A++

Customer Ratings

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8.3

Principal also has a good record when it comes to customer ratings, including high scores from both J.D. Power and the Better Business Bureau, which measure a company’s trustworthiness and responsiveness to customer complaints, among other factors. In 2018, Principal also received significantly fewer customer complaints than many other insurance carriers.

  • J.D. Power: 4 of 5
  • BBB: A+
  • Consumer Affairs: n/a
  • Consumers Advocate: n/a
  • NAIC complaint index: 0.13

J.D. Power scores are based on customer ratings for overall satisfaction, clarity and usefulness of annual statements and billing, price, policy offerings, and interaction experience.

The Better Business Bureau (BBB) ranks companies across a large swath of criteria. While consumers can submit ratings to the BBB, these scores are not taken into account in their rating, although tangential metrics that take into account customer experience are.

Consumer Affairs is a platform that lets consumers directly rate companies, while Consumers Advocate rates companies based on stability, reputation, and policy coverage. Principal isn’t currently evaluated by either.

The National Association of Insurance Commissioners (NAIC) tracks the number of complaints submitted to state insurance departments with their national complaint index. A score of 1 is the baseline average, and a score of 0 means there weren't enough complaints to count.

Principal’s NAIC score in 2018 was 0.13, meaning that they received significantly fewer complaints than the industry average. In 2018 they received a total of 10 complaints out of a customer base of over 600,000.

Policy Options

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8.1

Term life insurance lasts a set number of years (usually between 10 to 30) before expiring. Because it’s affordable and flexible, it’s the right choice for most life insurance shoppers.

Principal’s term life insurance is straightforward and easy to understand. Compared to other carriers, they offer slightly fewer term length options and riders. However, they offer the most common riders, including an accelerated death benefit rider that comes at no extra cost to policyholders.

Term Life

Key details
Annual payment discount5%
Available payment methodsCheck, auto bank draft
Temporary coverageUp to $1,000,000

Policy conversion

The policy is convertible until the earlier of the end of the term or to age 70. Conversion to guaranteed universal life products available only after the second anniversary of a term policy.

Available riders

Riders are additions to your overall life insurance policy that turn a basic life insurance policy into something that covers more circumstances.

  • Child Protection Rider - Allows eligible children to be added to a policy at issue with coverage available between $5,000 and $25,000.

  • Disability Waiver of Premium Rider - Waives the premium as long as the insured is totally disabled, subject to rider limitations.

  • Accelerated Death Benefit Rider - Allows insureds to obtain up to 75 percent of their death benefit (up to $1,000,000) prior to death when diagnosed with a terminal illness.

  • Conversion Extension Rider - Allows the conversion option to extend to the earlier of the full level premium period and the insured’s attained age 70.

Customer Experience

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8.3

Application process

State availability

Principal’s term life policies are available in all 50 states and Washington, D.C.

Application length

The application length for Principal is shorter than average.

*Based on standard application. Additional forms may be required.

Turnaround time

Principal’s turnaround time from application to active policy is shorter than average.

In certain cases, applicants may also qualify for accelerated underwriting, which allows you to skip lengthy medical steps in the underwriting process, such as obtaining an attending physician statement (APS). Generally, to qualify for accelerated underwriting, you must be a non-smoker in good health with a low-risk lifestyle.

Each insurer that offers accelerated underwriting will determine your eligibility through a medical interview over the phone, but Policygenius can help you figure out beforehand whether you qualify.

Change method

Policyholders can change their payment information and address online. However, you'll need to make a phone call to cancel a policy, and mail in paperwork to change the policy’s beneficiary.

  • Online: Update address, update payment information
  • Phone: Cancel policy
  • Mail: Policy delivery, update beneficiary

Payment methods

Principal accepts payment by check and auto bank draft.

Policy delivery

Final policy delivery is sent by mail.

Claims documentation

Principal requires beneficiaries to submit the following forms to claim a death benefit:

  • Beneficiary statement form (each beneficiary listed will have to submit one)
  • Death certificate

Policygenius offers insurance policies from many of the nation's top insurers, who pay us a commission for our services. However, all editorial choices are made independently.

About the author

Insurance Expert

Jennifer Pan

Insurance Expert

Jennifer Pan is an insurance editor at Policygenius. She covers life insurance, personal finance, and the economy. She previously worked in marketing and communications in the nonprofit sector and publishing.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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