Key Takeaways
- Principal Exited Individual Life Insurance in 2021: Since June 2021, Principal has stopped selling individual life insurance in the U.S., focusing instead on business-related policies and group benefits.
- Who Can Still Buy from Principal: Principal’s products are available to business owners, key employees, and employers, primarily for key person and buy-sell coverage, not for individual consumers shopping on their own.
- Strong Financial Ratings Across the Board: Principal Life Insurance Company holds an A+ from A.M. Best, AA- from Fitch, A1 from Moody’s, and A+ from S&P Global, all with stable outlooks.
- No Whole Life Insurance Offered: Principal does not offer whole life insurance. If you want traditional permanent coverage with guaranteed cash value growth, you’ll need to shop elsewhere.
- Customer Experience Is Inconsistent: Principal scores well on NAIC complaint data but carries a 1.8 out of 5 on Trustpilot, with recurring complaints about retirement accounts and difficulty accessing funds.
- Compare life insurance rates and quotes
Principal Financial Life Insurance Overview
If you’re shopping for individual life insurance, Principal Financial is not an option. In June 2021, Principal exited the U.S. individual life insurance market after a strategic review. Unless you’re getting coverage through an employer or you own a business with a legitimate key person or buy-sell need, Principal won’t sell you a policy.
Everything else about Principal, the nearly 150-year operating history, the A+ AM Best rating, the competitive underwriting on impaired risks, applies to a narrower audience than most review pages acknowledge. The ratings are real. So is the fact that most people reading this page can’t use them.
This Iowa-based company has been around since 1879, which gives it serious staying power in an industry where longevity matters. They evolved from a regional mutual called Bankers Life Association into a global Fortune 500 player. But their strategic pivot means the company now focuses almost entirely on businesses, offering individual policies to business owners and group life insurance coverage rather than serving everyday consumers.
Given Principal’s focus on business owners, it did not make our list of the best life insurance companies. However, it might still be right 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 look at carriers that actually want your business as an individual consumer.
Key Strengths
Financial strength is Principal’s clearest advantage. Principal Life Insurance Company carries an A+ Superior rating from A.M. Best, an AA- Very Strong rating from Fitch Ratings, an A1 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 be around matters.
Principal has also built a reputation for giving applicants with health complications a fair shake. Their underwriting considers the whole picture rather than automatically declining based on a single diagnosis. Controlled diabetes, a history of high blood pressure, prior cardiac events, Principal will often quote where more conservative carriers won’t.
Key Weaknesses
The core problem: most people reading this review 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 traditional permanent coverage with guaranteed cash value growth, you won’t find it here.
Consumer feedback is scattered. Principal carries a 1.8 out of 5 rating on Trustpilot. Most complaints center on retirement accounts and 401(k) administration rather than life insurance specifically, but themes of inconsistent service and difficulty accessing funds recur across product lines.
Principal Financial Affordability
Pinning down exact life insurance costs with Principal is difficult because they don’t publish rate cards publicly.
Their term products use banded rates at $200,000 and $1 million in death benefit. You get better pricing per thousand dollars of coverage when you cross those thresholds.
For context, a healthy non-smoking 40-year-old typically pays around $26 to $30 monthly for $500,000 in 20-year term coverage at preferred-plus underwriting across the industry. Principal generally lands in competitive territory for business-market buyers, though your actual tier depends heavily on health and the specific use case.
Group coverage through work offers flexibility. Employers can structure plans where the company picks up the entire tab, or employees supplement with voluntary coverage.
Riders cost 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 premiums if the insured is totally disabled.
Principal’s Accelerated Underwriting program may provide up to $1 million in coverage without requiring a blood draw or medical exam, for applicants who qualify based on health history and a tele-interview.
Principal Financial Coverage Options
Principal sells several types of life insurance, keeping in mind that individual consumers cannot buy directly anymore.
Their term lineup spans 10, 15, 20, or 30 years, with premiums guaranteed level for the selected term. Principal’s term products are approved in all states except New York.
What makes their term offering distinctive is the conversion flexibility. Options include no conversion, a limited conversion period, and a full conversion window to permanent coverage. You pick how much flexibility you want and pay accordingly.
Principal also offers a one-year term option, which is genuinely unusual. That short duration could work in specific situations, covering a short-term loan or bridging a gap until other coverage activates.
On the permanent side, Principal provides universal life policies suited for business protection, survivor income, special needs planning, and supplemental savings after maxing out a 401(k). They also carry indexed universal life (cash value tied to a market index) and variable universal life (more aggressive growth potential through investment subaccounts).
A word on the IUL illustration: the projected column in any indexed universal life illustration reflects assumed cap rates and participation rates that are not guaranteed. Principal’s IUL is no exception. Before signing anything, ask the agent to run the illustration at a lower assumed rate, around 5%, and show you the guaranteed column. The difference between projected and guaranteed cash value in a 30-year IUL illustration is often significant. The NAIC’s AG49-B guideline sets limits on what the projected column can show, but the guaranteed column is the contractual floor, and that’s the number that actually matters if the index underperforms for a decade.
Principal’s survivorship insurance covers two lives and pays the death benefit on the death of the second insured. It’s used in estate planning to help fund certain tax obligations and maximize wealth transfer. Few carriers offer this product, and Principal’s version is reasonably well-regarded in the business-planning space.
Principal does not offer whole life insurance. Traditional permanent coverage with guaranteed cash value accumulation is not on their menu.
Principal Financial Reliability
Financial strength is Principal’s strongest card. The ratings stack up across every major agency.
Principal Life Insurance Company carries an 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 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 agency reviews completed in 2025.
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 matters when you’re buying a policy that might not pay out for decades.
NAIC complaint data is favorable. Principal’s complaint index sits well below 1.0, which is the industry baseline. A score below 1.0 means the company receives fewer complaints than expected for a carrier of its size. The complaint data reflects life insurance and annuity lines specifically; the retirement account issues that dominate online reviews are a separate product category.
With nearly 150 years of continuous operation and over $89 billion in total assets, Principal has the resources and history to honor long-term commitments.
Principal Financial Customer Service
Service quality with Principal depends heavily on which part of the company you’re dealing with, and sometimes just on which representative picks up the phone.
Phone Support
Customers can reach Principal by phone on weekdays from 7:00 am to 7:00 pm CST. Those extended hours beat many competitors who close at 5 p.m. The company can also be contacted by fax, email, and via Facebook and X. No live chat option is available on the website.
Digital Support
The mobile app gets solid marks in the app stores. The Principal app carries a 4.8-star rating on iOS and 4.7 stars on Google Play and is available in Spanish.
The app lets you complete basic transactions, view account balances, roll over funds, change contributions, adjust investment allocations, and access financial education content.
Real-world feedback tells a messier story. 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.” Store ratings and user experience reviews don’t always measure the same thing.
Third-Party Ratings
Principal has been BBB Accredited since December 1, 1948, over 75 years of accreditation with an A+ rating.
Online sentiment runs cold. Principal carries a 1.8 out of 5 on Trustpilot. Complaints typically involve retirement products and 401(k) administration rather than life insurance specifically, but themes of inconsistent information and difficulty accessing funds recur. The gap between third-party satisfaction metrics and online reviews suggests very different experiences depending on your situation and product type.
Principal Financial Claims Process
For life insurance customers, Principal’s standard processing time is 7-10 business days after receipt of all required claims documents. Once all information is in, claims are generally resolved within five business days. If additional documentation is needed, the timeline extends.
Starting a claim is straightforward. Submit notification to the home office by phone at 800-331-2213 or by email, with the policy number and basic information about the deceased. 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 writing a check. They offer grief support and financial planning assistance at no additional cost, including Empathy beneficiary support available at 720-408-7491.
Beneficiaries have options for receiving funds. They can elect a lump-sum distribution, choose income options that spread payments over a period or lifetime, or receive the death benefit in an interest-bearing account they can access on demand.
For disability insurance claims, Principal aims to respond within days once all required information is received.
Principal Financial Application Process
A standard Principal application runs 4-6 weeks from submission to decision. That’s in line with the industry average. The timeline varies based on medical complexity, required testing, and how quickly medical records arrive from physicians.
You can get a quote for both term and permanent life insurance online. You’ll still need to work through an adviser to purchase a policy, but the ability to get a quote online without calling first is useful for initial comparison shopping.
Medical exam requirements vary by situation. Principal offers simplified issue coverage that skips the exam in certain circumstances, typically for qualifying applicants below specific coverage thresholds depending on age and health questionnaire responses.
Accelerated underwriting is available for healthy applicants. Principal offers up to $1,000,000 in term coverage for individuals with a clean health history, with decisions possible in as little as 48 hours after a tele-interview.
Underwriting pulls the MIB Group database, prescription history, motor vehicle reports, and digital health records. The MIB and prescription database checks are standard across the industry and surface information that didn’t make it onto the application. Underwriters at every major carrier run both before issuing a final offer.
Where Principal differentiates is their tolerance for imperfect health histories. Principal has consistently been willing to underwrite applicants that other carriers decline outright. Controlled chronic conditions, prior surgeries, and complex medical histories all get a closer look here than at more conservative competitors.
Pros & Cons of Principal Financial
Pros
- Financial stability is exceptional. Nearly 150 years of operation and top ratings from every major agency mean you can trust Principal will be there 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 core strength.
- Fast-track approval exists for qualified applicants. A clean health history can lead to a decision in 24-48 hours, without a medical exam, for coverage up to $1 million.
- NAIC complaint data is favorable. Principal generates fewer complaints than similarly sized competitors based on reported complaint index data.
Cons
- Individual consumers cannot buy coverage. The 2021 exit from individual life insurance means most people reading this cannot become customers.
- No whole life insurance. Traditional permanent coverage with guaranteed cash value growth isn’t offered here.
- Service quality varies significantly. Formal satisfaction metrics look reasonable, while consumer review platforms tell a different story. Your experience may depend on which product you hold and which team handles your account.
- Digital tools are inconsistent. App store ratings look solid, but actual users report slow, clunky interfaces that don’t match the store reviews.
- Agent network is limited in some areas, which can make accessing policies more difficult depending on where you live.
Our Verdict & Rating for Principal Financial
Principal is the right answer for a narrow audience. Business owners structuring key person coverage or buy-sell agreements, employers building group benefit packages, and wealthy individuals doing estate planning with permanent products, Principal is well-equipped for all of these. The financial ratings are legitimate, the business-market underwriting is competitive, and the company’s longevity is genuine.
For individual consumers shopping for personal life insurance, Principal is not in the running. They stopped selling to that market in 2021. Directing attention here wastes time that would be better spent comparing carriers who actually want your business.
Employers offering Principal group coverage can feel good about the company’s long-term stability. Workers enrolled in Principal through work are covered by a carrier that will almost certainly outlast everyone currently on the payroll.
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 confident about the company’s long-term stability. High-net-worth individuals engaged in complex estate planning with professional advisors may benefit from Principal’s specialized permanent products. Applicants previously declined by other carriers due to health conditions might find Principal’s underwriting approach more accommodating.
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. Anyone who values consistent digital tools and seamless online service should note the gap between Principal’s app store ratings and real user feedback. If you’re an individual consumer looking for coverage, check out Ethos or compare options across our best life insurance companies list.
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 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. Principal’s 5-10-day processing window is reasonable for the industry.
Customer Service (20% weight): Support availability, digital tools, and satisfaction metrics. Inconsistent feedback across platforms produces a middle-ground score.
