- Principal’s Strategic Focus Shift: Since June 2021, Principal has stopped selling individual life insurance in the U.S., instead focusing on business-related policies and group benefits.
- Who Can Benefit from Principal Life Insurance?: Principal’s products are mainly available for business owners, key employees, and employers, especially for key person and buy-sell coverage, not for general individual consumers.
- Principal’s Financial Strength: The company boasts high ratings from major agencies like A.M. Best and Fitch, and has maintained an “A” or better rating for 75 years, demonstrating exceptional financial stability.
- Coverage Options and Limitations: Principal offers term, universal, indexed universal, and variable universal life policies, but does not provide whole life insurance, which is a significant limitation for individual buyers.
- Customer Service and Claims Processing: While Principal has a solid reputation for paying claims promptly and offers extended support hours, customer experiences vary widely and digital tools have mixed reviews.
Principal Financial Life Insurance Overview
If you’ve stumbled across Principal while shopping for life insurance, there’s something you need to know right up front: in June 2021, Principal announced that it would discontinue selling U.S. individual life insurance sales after a strategic review. Translation? Unless you’re getting coverage through your job or running a business, Principal probably isn’t going to sell you a policy.
This Iowa-based company has been around since 1879, which gives it serious staying power in an industry where longevity matters. They’ve evolved from a scrappy insurance startup called Bankers Life Association into a global Fortune 500 player. But their strategic pivot means the company focuses on businesses, offering individual policies to business owners and group life insurance coverage rather than courting everyday shoppers like you and me.
Given Principal’s focus on business owners, it did not make our list of the best life insurance companies. However, it might still be for you. Read on to learn more.
Who is Principal Financial Life Insurance Best For?
Principal products are available only to business owners, executives, and highly compensated employees; for key person and buy-sell coverage needs; and for group benefits through employers.
If you own a company and need insurance to protect against losing a key employee, or you’re structuring a buy-sell agreement with partners, Principal has specialized products built for exactly these scenarios. Principal offers competitive pricing, especially for significant policies over $1 million.
Everyone else should check out carriers that actually want your business as an individual consumer.
Key Strengths
Where Principal really shines is financial muscle. Principal Life Insurance Company has received an A+ Superior rating from A.M. Best, an AA- Very Strong rating from Fitch Ratings, an A1 Good rating from Moody’s Investors Service, and an A+ Strong rating from S&P Global. When you’re buying a product that might need to pay out 30 years from now, knowing the company will actually exist matters.
They’ve also built a reputation for giving people with health hiccups a fair shake. Principal Life Insurance maintains a balanced underwriting approach that often provides opportunities for applicants who might face challenges with more conservative companies. Do you have controlled diabetes or a history of high blood pressure? The principal might say yes when others slam the door.
Key Weaknesses
The apparent problem: most people reading this review literally cannot become Principal customers for individual coverage. That’s a dealbreaker for the average person shopping around.
Beyond accessibility, Principal does not offer whole life insurance. If you want that classic permanent policy with guaranteed growth, you’re out of luck here.
Customer feedback is all over the map. Principal is rated 1.8 out of 5 on Trustpilot based on consumer reviews. Most gripes center on retirement accounts rather than life insurance, but the pattern of inconsistent service recurs.
Principal Financial Affordability
Pinning down exact life insurance costs with Principal is frustrating because they keep their rate cards close to the chest.
Their term products use banded rates at $200,000 and $1 million in death benefit protection. You get better pricing per thousand dollars of coverage when you hit those thresholds.
For context, a healthy non-smoking 40-year-old typically pays around $26 monthly for $500,000 in 20-year term coverage industry-wide. Principal generally lands in competitive territory, though your mileage may vary based on health.
Group coverage through work offers flexibility. Employers can structure plans where the company picks up the entire tab, or employees supplement with voluntary coverage.
Add-on coverage costs extra. The Accelerated Benefits Rider allows insureds to receive up to 75% of a policy’s death benefit (up to $1,000,000) if diagnosed with a terminal illness. The Waiver of Premium Rider waives the premium if the insured is totally disabled.
For folks who hate needles and medical appointments, Principal Accelerated Underwriting may provide up to $1 million in coverage without requiring bloodwork.
Principal Financial Coverage Options
Principal sells several flavors of life insurance, keeping in mind that regular consumers can’t buy directly anymore.
Their term lineup spans 10, 15, 20, or 30 years, with premiums guaranteed to remain level for the selected term. Principal Term is ideal for ages 35-55 and is approved in all states except New York.
What makes their term offering interesting is the flexibility around conversion. Options include no conversion, a limited conversion period, and a whole-life term conversion period. You pick how much flexibility you want and pay accordingly.
Principal offers terms of one, 10, 15, 20, and 30 years. That one-year option is genuinely unusual and could work in specific situations, such as covering a short-term loan or bridging a gap until other coverage kicks in.
On the permanent side, Principal provides universal life insurance policies that can be beneficial for business protection, survivor income, special needs planning, and financial planning after maxing out a 401(k).
They also carry indexed universal life (cash value tied to market index performance) and variable universal life (more aggressive growth potential with investment options).
Principal’s survivorship insurance covers two lives and pays the death benefit upon the death of the second individual. It’s useful for estate planning to help maximize certain tax deductions. Not many carriers bother with this niche product.
Remember: Principal does not offer whole life insurance. Traditional permanent coverage with guaranteed cash value isn’t on their menu.
Principal Financial Reliability
Financial strength is the Principal’s ace card. They’ve stacked up impressive ratings across every agency that matters.
Principal Life Insurance Company earned A+ Superior from A.M. Best (2nd highest of 13 rating levels), AA- Very Strong from Fitch Ratings (4th highest of 19 rating levels), A1 Good from Moody’s Investors Service (5th highest of 21 rating levels), and A+ Strong from S&P Global (5th highest of 20 rating levels). All ratings carry stable outlooks with the most recent reviews in April through June 2025.
This isn’t a recent lucky streak either. Principal has held an “A” or better rating from AM Best for 75 consecutive years. Three-quarters of a century of consistently strong financial performance is the kind of track record that should make you sleep easier.
Consumer complaints paint a positive picture, too. Principal has an NAIC complaint index score of 0.26, which means it receives far fewer complaints than expected for a company of its size. The industry benchmark sits at 1.0, so Principal beats the average by a wide margin. The company recorded only three complaints in 2022.
With nearly a century and a half of continuous operation and over $89 billion in total assets, Principal has the resources and history to honor commitments for decades to come.
Principal Financial Customer Service
Service quality with Principal depends heavily on which part of the company you’re dealing with, and sometimes just which representative picks up the phone.
Phone Support
Customers can contact Principal by phone on weekdays, 7:00 am to 7:00 pm CST. Those extended hours beat many competitors who close up shop at 5 p.m. sharp.
The company can also be contacted by phone, fax, email, and via Facebook and X. No live chat option exists on the website, which feels like a miss in 2025.
Digital Support
The mobile app gets solid marks in app stores. The Principal app is rated 4.8 stars on the iOS App Store and 4.7 stars on the Google Play Store and is available in Spanish.
The app lets you complete simple transactions, view account balances, roll over funds, change contributions, adjust investments, and access financial education content.
Real-world feedback tells a messier story, though. One reviewer described “the worst UI I’ve ever seen. It lags, it takes so long to open a link, I usually forget what I came to do.”
Third-Party Ratings Principal has been BBB Accredited since December 1, 1948. That’s over 75 years of accreditation with an A+ rating.
Online sentiment runs cold, though. Principal carries a 1.8 out of 5 rating on Trustpilot. Complaints typically involve retirement products and 401(k) headaches rather than life insurance specifically, but themes of inconsistent information and difficulty accessing funds recur.
Principal Financial receives strong ratings for customer service, overall satisfaction, product offerings, price, and interaction. The gap between J.D. Power results and online reviews suggests wildly different experiences depending on your situation.
Principal Financial Claims Process
For life insurance customers, the insurance carrier’s website states a standard processing time of 7-10 business days after receipt of all pertinent claims documents.
Once all information is received, claims are generally processed within five working days. If additional information is needed, the process could take longer.
Starting a claim is straightforward. Submit the notification to the home office by phone at 800-331-2213 or by email, including the policy number and basic information about the deceased policyholder. The insurer requires two primary documents: a completed Beneficiary Statement and a certified copy of the death certificate. Forms can be submitted electronically through the portal, or via email and fax.
Principal goes beyond just paying out money. They offer grief support and financial planning support at no additional cost, including Empathy beneficiary support available at 720-408-7491.
Beneficiaries get options for receiving funds. They can elect a lump-sum distribution, pick from income options that provide income over their remaining life, or receive the death benefit in an interest-bearing account they can access on demand.
For disability insurance customers, Principal aims to respond within days once the insurance company has received all required claim information.
Principal has a solid reputation for paying valid claims promptly, typically processing death benefit claims within 10-15 business days.
Principal Financial Application Process
The principal’s application typically takes 4-6 weeks from application to decision, which is standard for the industry. The timeline can vary based on medical complexity, required testing, and the speed with which medical records are obtained from physicians.
You can get a quote for both term and permanent life insurance online. You’ll still have to go through an adviser to purchase a policy, but the convenience of an online quote makes shopping around a breeze.
Medical exam requirements vary by situation. Principal offers simplified issue life insurance that doesn’t require a medical exam in certain circumstances, typically available for coverage under $250,000, depending on age and health questionnaire responses.
Speed is possible for healthy applicants. Principal offers up to $1,000,000 in term coverage for individuals with a clean health history, with underwriting decisions possible in as little as 48 hours after completing a quick tele interview.
Underwriting uses the MIB, prescription checks, motor vehicle reports, and digital health records. Decisions are possible within 24 hours.
What sets Principal apart is their approach to imperfect health histories. Principal is one of the industry’s best carriers for allowing pre-existing conditions. Principal has consistently been willing to underwrite an individual’s complete health history and offer policies to many clients that other insurers consider high-risk.
Pros & Cons of Principal Financial
Let me break down the highlights and lowlights.
Pros
- Financial stability is exceptional. Nearly 150 years of operation, plus top ratings from every major agency, means you can trust Principal will exist when your family needs it.
- Underwriting treats health conditions fairly. Their approach considers your whole picture rather than automatically declining based on a single diagnosis.
- Business-focused products are well-designed. Key person coverage, buy-sell funding, and executive benefits are Principal’s sweet spot.
- Fast-track approval exists for qualified applicants. Aleanan’s health history can lead to a decision in 24-48 hours, without medical exams, for coverage up to $1 million.
- Complaints run below industry norms. NAIC data shows that Principal generates fewer problems than similarly sized competitors.
Cons
- Regular consumers cannot buy coverage. The 2021 exit from individual sales means most people reading this literally cannot become customers.
- Whole life insurance doesn’t exist here. If you want traditional permanent coverage with guaranteed growth, shop elsewhere.
- Service quality varies wildly. J.D. Power says great things, while Trustpilot tells horror stories. Your experience may depend on luck.
- Technology feels dated. App store ratings look good, but actual users report clunky, slow interfaces.
- Accessing policies can be more difficult in some communities due to a limited agent network.
Our Verdict & Rating for Principal Financial
Principal represents a paradox in the insurance world. Exceptional financial strength and specialized business products exist alongside a complete absence of individual consumer focus and inconsistent service experiences.
For the business market, Principal delivers. Their group benefits have won industry recognition, their balance sheet inspires confidence, and their products for succession planning and executive compensation are thoughtfully designed. Employers offering Principal coverage are providing their teams with protection from a carrier that will almost certainly outlast everyone currently on the payroll.
For individual shoppers browsing life insurance options, Principal is essentially irrelevant. Since 2021, they’ve focused exclusively on commercial and group markets. You’ll need to direct your attention elsewhere.
Who Should Consider This Company
Business owners structuring insurance for key employees or partnership buyouts will find Principal well-equipped for their needs. Workers receiving Principal coverage through employer benefit packages can feel good about the company’s long-term stability. Wealthy individuals engaged in complex estate planning with professional advisors may benefit from Principal’s specialized permanent products. People previously declined by other carriers due to health conditions might find Principal’s underwriting approach more welcoming.
Who Should Consider Another Provider
Individuals seeking personal life insurance need carriers that actually sell to them. Those seeking whole life coverage must look elsewhere, as Principal doesn’t offer it. People who prioritize slick digital tools and seamless online experiences may find Principal’s technology frustrating. Anyone who values predictable service quality should note the wide variance in customer experiences. If you’re a non-business owner looking for insurance, consider Ethos to get quotes.
Methodology
Five factors drive our scoring:
Financial Stability (20% weight): Ratings from AM Best, Moody’s, S&P, and Fitch plus longevity and asset base. Principal excels here with A+ ratings across the board.
Coverage Options (10% weight): Product variety, customization ability, and rider selection. Missing whole life and restricted individual access hurt the Principal’s score.
Affordability (30% weight): Premium competitiveness and available savings opportunities. Limited public pricing information makes a comprehensive assessment difficult.
Claims Process (20% weight): Settlement speed, denial patterns, and claimant experiences. The principal’s 5-10-day processing window is reasonable.
Customer Service (20% weight): Support availability, digital tools, and satisfaction metrics. Wildly inconsistent feedback produces a middle-ground score.
Frequently asked questions
Answers to common questions about Principal Financial life insurance.
No, Principal Financial announced in June 2021 that it would discontinue selling U.S. individual life insurance policies, focusing instead on business-related insurance products.
Principal’s products are best suited for business owners, executives, and highly compensated employees, especially those needing coverage for key person or buy-sell agreements, or group benefits through their employers.
Principal’s key strengths include its exceptional financial stability, with high ratings from major rating agencies, and its reputation for fair underwriting, especially for individuals with health issues.
Principal does not offer whole life insurance, and since they discontinued individual sales in 2021, most regular consumers cannot buy policies directly from them. Customer service experiences can also vary widely.
Claims are generally processed within 7-10 business days after all documents are received, and death benefit claims are typically paid within 10-15 business days. Customer service quality can vary, with some praising their support and others reporting difficulties with their digital tools.
