Principal Life Insurance Review

So, how did Principal Life Insurance come about? Let me quickly share with you their history.

Established in 1879 under the name Banker’s Life Association, Principal Financial was among the first true life insurance providers founded in the US.

They provided life insurance in the form of memberships to men aged 22 and 55. A decade after, Banker’s Life was able to amass enough members to bring the total value of their life insurance assets to an impressive $29 million. That same year, the company moved its operations in Des Moines, Iowa.

Fast forward to 1985, the company changed its name to Principal Financial Group. They expanded their operations outside of the US during the 90s and went public in 2001.

In 2018, they ranked 210 on Fortune magazine’s list of the largest 500 corporations based on revenues. On the Forbes Global 2000 list, which includes the world’s biggest and most powerful companies, they ranked 351st.

Principal Financial Ratings

Aside from being around for more than a century, Principal Financial also boasts strong financial ratings as a company:

  • AM Best: Ranked A+ (Superior)
  • BBB Rating: Ranked A+
  • JD Power: Scored 3 out of 5
  • Fitch: AA- Ranked Very Strong
  • Moody’s – Scored A1 (Good)
  • Standard & Poor: Ranked A+ (Strong)

Principal Financial Products

  • Life Insurance
  • Income Protection (Disability Insurance)
  • Estate Planning & Irrevocable Life Insurance Trusts
  • Insurance through work

Principal Term Life Insurance

Main features:

  • Uses the Principal Financial Accelerated Underwriting Program (AUP) – Principal’s newest underwriting procedure which features fast underwriting in as little as 24 hours for applicants who qualify.
  • Offered in 10, 15, 20, 30 years
  • Beneficiaries will receive tax-free death benefit ranging from $200,000 to $1 million
  • Ability to add riders
  • Level premium – Fixed payments for your premium that will never change during the course of the policy.
  • Convertible – You have the option to change your term policy into a permanent one.
  • Cancel anytime – No-risk obligation for the policyholder. Should they deem it unneeded at any point of the coverage, they can cancel the policy.

Available Life Insurance Riders

If you’re looking to add additional policy protection for specific scenarios, Principal Life offers the following riders:

  • Child Protection Rider – Provide coverage of between $5,000 to $25,000 for eligible children
  • Disability Income Rider – Premiums will be waived if you become 100% disabled because of a qualifying event.

Sample Quote: Male, Non-smoker, 50 Years Old ($200,000 policy)

Principal Life Insurance

Female, Non-smoker, 50 Years Old ($200,000 policy)

Principal Life Insurance

Principal Financial Life Insurance Application process

There are basically two ways you can apply for a policy with Principal Life.

First is via the traditional method, wherein you can either give them a call directly to speak with a representative or fill out an online application form.

The second way you can apply is through their Financial Accelerated Underwriting Program. If you qualify for this, you can skip the medical exams and be potentially approved within 24 hours.

Principal Financial Accelerated Underwriting Program (AUP)

Similar to Ladder Life’s super-fast approval process, Principal’s AUP is a program that makes use of big data to skip the lengthy and time-consuming process that usually goes with life insurance applications.

Principal claims that AUP effectively eliminates medical/lab testing and exams by as much as 45% to 55% of applicants tagged under the following health classes:

Standard, Super Standard, Preferred, and Super Preferred.

The initial screening makes use of the participant’s age, personal history, and desired coverage amount.

There’s one thing that makes AUP a cut above the rest though when compared to similar offerings from other life insurance companies:

The Accelerated Underwriting Program is available on all of Principal’s life insurance offerings!

These include Term (10, 15, 20, 30 years of coverage), Universal Life, Variable Universal Life, Indexed Universal Life, Benefit VUL II (for NY residents only), and Survivorship Universal Life.

Here’s a sample scenario when using AUP:

Principal Life Insurance

General Qualifications for Principal Life Accelerated Underwriting Program

  • Must be between the ages of 18 to 60
  • Coverage must amount to anywhere between $50,000 to $1 million
  • Should be categorized under one of the following health classes:
    • Standard, Standard Plus, Preferred and Super Preferred
  • Must have not undergone any major medical operations or conditions
  • Applicant’s build falls within the build chart

Steps for Applying for Principal Life Insurance

Step 1: Review and answer the qualification checklist to verify if you qualify

Actual sample questions from the checklist:

  • Are you between the ages of 18 and 60?
  • Total face amount requested falls between $50,000 and $1 million.
  • The products applied for are Term, UL, IUL, VUL, SUL or Benefit VUL II (NY only).
  • Does your build meet the recommended weight limits? Refer to chart on back.
  • You have no major medical condition(s). Refer to the chart below:
Atrial Fibrillation Barretts Esophagus Bipolar Disorder
Cancer (exceptions: Basal Cell and Squamous Cell Carcinomas) Chronic Obstructive Pulmonary Disease (COPD/Emphysema) Crohns Disease
Diabetes Drug abuse and/or treatment Epilepsy/Seizure
Gastric Bypass/Lap Band Heart Disease/Surgery all forms Hepatitis
Hypertension (diagnosed within six months) Kidney Disease SLE/Lupus
Melanoma Multiple Sclerosis (MS) Parkinsons Disease
Peripheral Artery Disease (PAD)/Peripheral Vascular Disease (PVD) Rheumatoid Arthritis (RA) Sleep Apnea
Stroke/Transient Ischemic Attack (TIA) Ulcerative Colitis (UC) Alcohol abuse and/or treatment

Your build must also fall within their Underwriting build chart in order to qualify for AUP:

Step 2: If you answered YES in all questions on the checklist, proceed to complete sections A & C of the application.

If you answered NO, complete the full application form and submit so you can be assessed using traditional underwriting.

Step 3: The last part is for the interview. An agent from Principal Life Insurance will conduct a quick Q & A regarding your application (per your preferred schedule). Call them at (1-888-835-3277), option 0 and make sure to tell the interviewer that you are applying using the Principal Accelerated Underwriting Program.

Principal Life Insurance

Principal Universal Life Insurance

Principal offers the following options for their Universal Life insurance:

  • Universal Life Provider Edge
  • Universal Life Protector IV
  • Universal Life Accumulation II
  • Indexed Universal Life Accumulation
  • Indexed Universal Life Flex
  • Indexed Universal Life Flex II

Reasons to get Principal Universal Life Insurance

Great for policyholders looking for more flexibility in paying premiums and in death benefit

With universal life, a portion of your premiums goes into cash value which grows using a floating interest rate (minimum rate guarantee)

Lifetime protection

Cash value can be taken out during the course of coverage (loans and partial surrenders)

With indexed universal life insurance, the interest rate is guaranteed

With indexed universal life insurance, the interest rate is partially based on the performance of the stock market index

Provides options for using  your cash value without any penalties (indexed universal)

Principal Variable Universal Life Insurance

Principal offers the following options for their Universal Life insurance:

  • Principal Variable Universal Life Income II
  • Principal Variable Universal Life Income III (unavailable in Maryland)

Reasons to get Principal Variable Life Insurance

Great for policyholders looking for a more aggressive investment strategy for their cash value (cash value will be invested in stocks, bonds, mutual funds, etc.,)

Provides the option to convert your cash value into an annuity for additional income

Provides options for using  your cash value without any penalties

The portfolio is professionally managed but still subject to market performance

Principal Survivorship Life Insurance

Principal offers their Principal Survivorship Universal Life Protector II for policyholders looking for what is commonly referred to as a “second-to-die” policy. This type of coverage is usually obtained by married couples where the death benefit gets paid out to beneficiaries when the second person dies.

Reasons to get Principal Survivorship Life Insurance

Great for married couples looking to give a death benefit to their beneficiaries upon the death of the second person (coverage is for two persons)

Can be utilized in estate planning in order to leverage tax deductions (an advantage since this usually costs less than purchasing two separate policies)

Pros and Cons of Principal Life Insurance


  • Principal’s Accelerated Underwriting Program makes it quick and easy for qualified policyholders to get insured for up to $1 million
  • No medical exam required for AUP-approved applicants for all insurance products
  • Superb overall financial ratings
  • Competitive premium rates


  • No option to file for a claim online, you have to do it via phone
  • Their online services are somewhat limited (doesn’t allow you to update policyholder or beneficiary info online)
  • No true whole life insurance offering (current permanent life options only include: variable universal, indexed universal, survivorship)

Which Principal Life Insurance product should I choose?

The answer depends mainly on two factors: Amount and length of coverage that you need.

If you are looking for the absolute cheapest option, you can’t go wrong with Principal’s term life insurance.

In our sample policy above, a 50-year old non-smoking male can get a $200,000 policy that will last 20 years by paying $34 per month.

As a policyholder, it’s the most straightforward and affordable protection you can get.

With term life insurance, your beneficiaries are guaranteed a death benefit for a certain period of time. Once the policy is nearing its expiration, you have the option to renew it or convert to permanent life insurance.

Some folks want to have more flexibility in both premiums and death benefit or simply want protection that lasts a lifetime. For these people, it makes sense to consider Principal’s permanent life insurance offerings.

Having cash value in your policy allows for another way to grow your money. If you’ve exhausted all traditional wealth-building options (IRA’s, 401k’s, etc.,), permanent life insurance like Variable Life or Indexed Universal provides policyholders with an additional place to grow their money.

Also, having the option to borrow or take a partial withdrawal against your cash value can help during tough financial situations. Knowing you have some assets to lean on during times of need gives you an additional sense of security. In some cases, permanent life insurance is useful for estate planning for people who wish to transfer assets to beneficiaries.

Do note, however, that these added benefits come at a cost. Permanent life insurance is significantly more expensive than term. And you have to make sure that you are not missing out on your premium payments, as it can automatically void your coverage.

Does it make sense to buy both term life insurance and permanent life insurance?

In some cases, yes. For example, a young family can make good use of a combination strategy by adding term coverage to their existing permanent policy. This helps assure future insurability especially when they have more kids. Also, term insurance can be converted later on to permanent, so essentially you can pay less now (term) and still have the option for permanent coverage later.

Is it for you?

When it comes to purchasing life insurance, financial stability and industry experience are important. As a Fortune 500 company, Principal Life proves that it has both.

Their Accelerated Underwriting Program simplifies the process of getting coverage and at the same time removes much of the hassle that comes with getting life insurance. This is in line with what most up and coming insurance companies like Haven Life and Ladder Life are doing today.

Principal Life also gives their policyholders the option to use riders and lifestyle credits to improve their health class ratings.

They have a solid line-up of insurance products that cover what most folks need.

One thing they can improve, however, is their online services. While their AUP feature is a step in the right direction, their website is lacking in content with regards to their product offerings and its details.

Also, you can’t do some of the basic stuff that policyholders usually do on their accounts like updating beneficiary information or  account info. Hopefully, Principal revamps some of their online services so it will be more efficient and easy for their policyholders to use.

If you want to know more about how to get the best life insurance, you can speak with one of our agents or request a free life insurance online quote.