8.5 / 10

Principal Life Insurance Review

Principal offers some of the best rates in life insurance, as well as competitive underwriting for common and complicated health conditions such as asthma, diabetes, and cancer.

Tim TorresJennifer Pan

Tim Torres & Jennifer Pan

Published November 17, 2020

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Methodology
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At Policygenius, we're committed to providing objective and transparent advice through strict editorial standards to help you get insurance right. Read more about our methodology.

Principal

OVERALL

8.5

THE GOOD

    Very competitive rates

    Financially strong

THE BAD

    Fewer customization options

    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 is 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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9.8

Confidence

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8.5

Third-Party Ratings

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8.3

Policy Details

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7.6

Ease of Application

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7.5

PRINCIPAL COMPANY SPOTLIGHT

4 of 5

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J.D. Power Rating

A trusted customer satisfaction and product quality research agency

A+

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BBB Rating

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

The Details


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The Good

Very competitive rates. Principal has some of the most competitive rates at every age bracket in the industry, as well as favorable underwriting for a range of common medical conditions, including asthma, diabetes, sleep apnea, and a personal or family history of cancer.

Financially strong. Principal earns high scores from the major credit rating agencies, including A.M. Best and Standard and Poor’s. If you’re worried about their ability to pay out death benefits to beneficiaries in the future, don’t be!

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The Bad

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

Can’t update some information online. Principal customers can 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.

The Breakdown

Cost

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9.8

The cost of life insurance depends on multiple factors. Your age, health, the state you live in, and of course your chosen policy, can affect how much you’ll pay. Principal’s rates are competitive at every age bracket. They also offer favorable underwriting for some of the most common health conditions cited on life insurance applications.

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

AGEPRINCIPAL AVERAGEINDUSTRY AVERAGE
20s$24.21$28.02
30s$25.97$32.06
40s$55.31$60.97
50s$134.08$152.00
60s$471.62$504.29

Sample rates are for a healthy, non-smoking male in California applying for $500,000 in Preferred-rate class coverage. Rates current as of November 2020, according to Policygenius data.

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

Here are some common health conditions that can qualify for lower life insurance rates with Principal:

  • Asthma
  • Diabetes
  • Lupus
  • Narcolepsy
  • Parkinson’s
  • Sleep apnea

→ Want to read more about life insurance with pre-existing conditions? We got you covered.

Confidence

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8.5

You’ll likely keep your life insurance for a few decades. To ensure your policy lasts, your insurance carrier must remain in good financial standing. And it has to be able to pay out any death benefits your beneficiaries are owed in the future.

For that kind of certainty, we turn to top financial ratings firms that look at the stability of companies, and their likelihood of staying in business long enough to meet the obligations of policyholders.

Fortunately, Principal has been in business for a pretty long time — over 140 years. Plus, they have over half a million customers. And they enjoy high ratings from all three major credit rating firms.

  • Year founded: 1879
  • A.M. Best: A+
  • Moody’s: A1
  • Standard & Poor’s: A+

A.M. Best is a credit rating firm that focuses specifically on the insurance industry. Their A+ rating for Principal is the second-best grade possible, reserved for “excellent” companies. Carriers with a B grade or lower are more vulnerable to risk.

Bond credit rating agency Moody’s gives Principal an A1 rating, which means they’re "upper-medium grade and subject to low credit risk." A1 is the fifth-highest grade on Moody’s 20-point scale, which ranges from Aaa (the highest) to Ca (the lowest).

The credit analysis firm Standard & Poor’s rates Principal at A+ , meaning they have a very strong ability to meet customers’ financial obligations. Companies are rated on a scale from AAA to D. The higher the rating, the stronger the company’s stability.

Third-Party Ratings

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8.3

Principal has a decent record when it comes to customer ratings, including a high score from the Better Business Bureau. Principal also received fewer customer complaints than many other insurance carriers according to the National Association of Insurance Commissioners.

Unfortunately, that’s all the consumer sentiment available so far. We’ve provided the customer insight from third-party sources we could find below.

  • Better Business Bureau: A+
  • Consumers Advocate: n/a
  • Consumer Affairs: n/a
  • NAIC complaint index: 0.32

The Better Business Bureau gives Principal an A+. The non-profit organization grades companies on truthfulness in advertising, responsiveness to customer complaints, and other aspects. Customers can submit ratings to the BBB, but these scores are not taken into account.

Third-party review site Consumers Advocate and customer review site Consumer Affairs don’t have ratings for Principal.

The National Association of Insurance Commissioners (NAIC) tracks complaints sent 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 receive a rating. Principal’s score of 0.32 means they’ve only had fewer complaints than the industry average.

According to their latest life insurance survey, J.D. Power gives Principal a 772 out of 1000 points. That translates to 4 out of 5 Power Circles. Though we don’t include this grade in our rating, we’re pointing it out here because that’s still an above average score.

Policy Details

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7.6

Principal offers a standard term life policy as well as a handful of permanent life products, including guaranteed universal, indexed universal, and variable universal life policies.

Term life insurance

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

Principal Term

Principal Term, is a straightforward term life policy. Compared to other carriers, they offer slightly fewer term length options and riders.

However, they do offer the most common riders which you can use to customize your policy, including an accelerated death benefit rider that comes at no extra cost.

Policy FeaturePrincipal Term
Eligible ages20 to 80 years
Term lengths10-, 15-, 20-, or 30-year terms
Coverage minimum$200,000
Coverage maximum$1 million

Healthier applicants can be eligible for accelerated underwriting, which basically means skipping the medical exam. But eligibility requirements are quite strict, so most potential customers should brace for scheduling a lab test during the application process.

Available riders

  • Accelerated death benefit rider. This provides up to 75 percent of the death benefit (up to a $1 million maximum) if the policyholder is diagnosed with a terminal illness. There’s no extra charge for this rider.

  • Child protection rider. This rider adds eligible children (aged 14 day to 18 years) to the policy when it’s issued, with coverage available between $5,000 and $25,000.

  • Conversion extension rider. Allows the policyholder more time to convert their term policy to a permanent one. It activates at the end of the full level premium period or when the turns 70, whichever comes first.

  • Disability waiver of premium rider. This waives the premium as long as the insured is totally disabled, subject to rider limitations.

Temporary coverage
Principal offers temporary coverage up to $1 million.

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.

Rate reconsideration
If policyholders want to reconsider their premiums after their policy has been activated, they will have to wait at least one year if they use tobacco. Otherwise, it’s on a case by case basis. Reconsideration is priced using the original issue age of the insured.

Permanent life insurance

Principal offers universal life insurance, as well as indexed universal, variable universal, and survivorship life insurance. There is no whole life option.

Universal Life Insurance Details

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Universal life policies all have flexible premiums and death benefits, which can change depending on your financial situation and market conditions. A cash value component can be used to pay for medical expenses or premiums.

Principal’s indexed universal products are linked to a stock market index, like S&P 500 for Nasdaq. These policies earn interest based on that index.

Principal’s variable universal life policies are more geared towards companies or executives. They could provide greater cash-value growth, but there’s risk for losses if the investments perform poorly.

Anyone age up to age 85 can apply for Principal’s universal life policies, which come with coverage amounts of $25,000 to over $15 million.

However, we suggest most shoppers go with a term life policy over a universal life policy. Universal policies are too complex, and more importantly, too expensive for most people. Unless you run a company or you’re planning an estate, you’re better off with a term life policy and a regular savings account from a bank.

Survivorship Life Insurance Details

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Survivorship life insurance covers two people, usually a married couple. The death benefit is paid after the second person dies. Meant for people aged 55 to 85, there’s a minimum coverage amount of $250,000.

While this may seem like a good idea, we don’t recommend survivorship policies. These types of policies are mainly used for estate planning and for tax purposes, and the second policyholder may not die for decades, which would defeat the purpose of income protection in the first place. We suggest couples purchase separate term life policies instead.

Ease of Application

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7.5

For the most part, applying for Principal policies is a straightforward process.

Application process

Most Principal Term applicants will undergo full underwriting. That entails answering questions about medical and prescription histories over the phone and scheduling a medical exam. The phone interview and medical exam are then reviewed by the underwriter to determine the exact details of your policy.

In some cases, applicants may qualify for accelerated underwriting, which lets you skip the medical exam. To qualify, you must be a non-smoker in good health with a low-risk lifestyle.

Turnaround time

Principal’s turnaround time from application to active policy is about average, which is four to six weeks.

Policy delivery

Policies are delivered electronically.

More Info

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State availability

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

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.

Payment methods

Principal accepts payment by check and auto bank draft. Credit cards are not accepted.

Digital tools

Principal provides an online quote tool on their website so you can get an idea of how much you’ll pay for premiums.

Claims documentation

Principal requires beneficiaries to submit a statement form and death certificate while filing a claim.

Frequently Asked Questions

Does Principal offer online quotes?

Yes. You can enter your personal information on the Principal's website and receive a free online quote instantly. You can also get a free online quote here on Policygenius.

Do I need to take a medical exam?

Most likely, yes. Most people who apply for Principal’s term life policy will have to undergo a medical exam. You may be able to skip the medical exam if you’re a non-smoker, in good health, and live a risk-free lifestyle. Most applicants should expect to go through full underwriting.

What are the main health conditions that Principal covers?

People with the following conditions will receive better rates with Principal than with other carriers: asthma, diabetes, lupus, narcolepsy, Parkinson’s, and sleep apnea. People with a family history of cancer and people who use CBD or marijuana will also benefit from a Principal policy. These conditions will likely disqualify accelerated underwriting.

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.

Reviews Expert

Tim Torres

Reviews Expert

Tim Torres is the reviews editor at Policygenius. His work has appeared in Computer Shopper, Tom's Guide, and numerous other outlets over the last ten years.

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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