Looking for life or disability insurance products with a ton of options in front of you and wondering if Principal is a good one. The fact that you’re giving this a serious thought is a very good sign because picking an insurance company is a serious matter, well maybe not as serious as picking a heart surgeon but up there. Last thing you want to do is end up going with a company that may go under with your family wondering who is going to take care of all the expenses.
Well, I’m here to tell you that Principal is definitely not a fly by night or a scam, and in fact is a very reputable company. But before we give a final verdict is important to look at all the factors that are important to you the consumer. Great news is that I have personally reviewed hundreds of these companies and will give you insight that will guide you in the right direction. And FYI, we actually work with this company so this is not just some lead generation website making assumptions, we have the actual experience of working with them so you’ll know if this is the right carrier for you after reading this article.
About Principal Life Insurance COmpany
History
Let’s first discuss a huge indicator of what you can expect the company to be in the future and the best predictor of that is past. Principal has been around since 1879, yes it is over a century old so you know they must have survived all kinds of economic downturns. The age of the company is a very important factor to consider when selecting a company and that’s actually a reason why we only work with companies who are 60+ years in business.
If you want to know little about their history, they were started in the state of Iowa with a goal of insuring life insurance plans only on men. Although, the company had huge growth eventually they realized they can capture a way bigger market by serving all demographics and offering more products. After few decades of consistent growth the company re branded as Principal Financial Group due to the fact that they started offering financial and retirement products in addition to the insurance product portfolio.
Strength
This is a huge factor to consider and if you ask me if a company has over $100 billion in assets they are doing something right. And if you were wondering Principal has over $666 billion dollars in assets, yes that's with a “B”. That’s probably more than some countries GDP! They also earn about 13.9% on their assets which means they have pretty great financial managers. If you wondering how does a company get this big, well, they do have about 22 million customers that trust them with their money.
Another way to see how strong a company is with their rating that is assigned by various rating agencies. Some you probably heard of before like S&P, Moody’s or A.M. Best. All the agencies gave Principal a high grade of "A" which shows they have enough to pay claims, manage their assets correctly and don’t risk too much.
Giving Back
Besides how much is in their bank we like to see if they care about the less fortunate and the answer is YES! For over 100 years Principal has been giving back through their United Way organization. Their 10,000 employees volunteer to help their local communities and Principal also matches the employees monetary donations dollar for dollar. They have also giving away about $100 million dollars through grants to nonprofit organizations. Any company that cares about their community and gives to charities is a winner in my book.
Service
Doesn’t matter how great every factor is if the company has crappy service that will be something you’ll have to deal with for years to come. Luckily, this company has great customer service when you call their 800 number with a friendly and knowledgeable support staff. You may have to wait a little bit just like you would with any large company but not too long from my experience.
Their website is also very clean, simple to use and up to date unlike some of the other life insurance companies. You can also log in to manage your products that were purchased through them which is really cool.
Principal Company Products
Principal has a nice pool of both insurance and financial products. Let’s review briefly of what they have to offer you.
LIFE INSURANCE
When it comes to life insurance there are really two types of life insurance which are term and permanent life insurance. Term insurance is temporary coverage that secures you for a certain duration of time and because of this you can secure a large amount of insurance for a very affordable monthly premium.
Permanent insurance is just like it sounds designed to provide coverage for a lifetime. This plan will never expire and you’re 100 percent sure your family will get the funds at one point or another. And of course this coverage will cost more than the term for this reason. Best analogy is renting an apartment versus owning one. So let’s see what they offer for both:
Term Life Insurance
Principal has plans that will provide you low monthly premiums and will cover you for lengths of time from 10, 15, 20 and 30 years. They also have a one year renewable plan if you need a very short term option. Whatever term you select the plan amount and premium will be locked in for that duration. Their term plans are convertible which means anytime during the term you can convert them to a permanent plan without any questions asked.
They also come with an Accelerated Death Benefit Rider at no cost, which will pay you up to 90% of the coverage amount while you’re still alive if you are diagnosed with a terminal illness with less than 12 months to live. You can use the funds however you like so if you want to try an alternative medicine treatment or just to party up, you can. Just a side note, if you are just getting into a mortgage or starting a family then securing a $500,000 of 30 year term for under $50 per month might be a great option.
Permanent Life Insurance
Not sold on the idea of paying for insurance for 20 or 30 years with nothing to show for it if you outlive it, then permanent plan is for you. You can have a lifetime coverage until age 90, 95, 100 and even 121. Principal has 4 permanent life insurance plan options.
Universal Life Insurance- Lifetime coverage designed to provide flexibility in death benefits and premiums, which means if you ever need to make some adjustments in the future you can. Just like all permanent plans it does accumulate savings in the cash value portion of the insurance policy so you can get an extra cushion if need be. Unlike other investments it also has a minimum rate guarantee so if the market crashes you won’t be affected.
Indexed Universal Life- Same as a universal life policy except the interest you earn is based on market index based on for example S&P 500. This is a good option for those looking to get lifetime cover and some passive investment returns.
Variable Universal Life- This is a policy where Wall Street meets insurance. It offers the flexibility of a universal life policy along with lifetime death benefit but you are managing the investments within the cash value. The returns are aggressive but so is the risk. Ideal policy for those who are active investors that are looking for tax advantages of life insurance while being able to get higher returns.
Survivorship Insurance-a permanent plan that covers two people and pays out only when both insured are deceased. Ideal policy for estate planning but not a very high demand for it.
Disability Insurance
The company also offers disability insurance coverage which is excellent choice and in my opinion a very important coverage to have. A disability insurance plan will replace up to 60% of you income in the event you get disabled. It is known as an income protection and you can go with a short term(2 to 5 year benefit) or long term(up to age 65 benefit) disability option. Just to give you an idea one in four people end up disabled so it can happen.
Annuities
Want to start putting away money for retirement and to have a consistent check each month then an annuity is a great investment. You can start putting money into annuity when you’re young or you can take a large lump sum and put it into an annuity to get guaranteed fixed payouts for life. Whatever you decide Principal has fixed, income, indexed and variable annuities to fit your needs. Some options also allow your beneficiaries to collect the remainder balance if you die before agreed upon scheduled pay out.
Other Financial Products
Not going to get into much detail but to give you an idea here is a list of other financial products Principal offers.
Principal vs. Other carriers
COST
I built this agency to provide the best life insurance option available on the market for my clients. Which usually comes down to cost when you’re dealing with the most reputable companies. I can also tell you that out of 60 companies we represent Principal comes out as top five when it comes to cost of life insurance.
Application Process
When applying for life insurance it typically takes between 4 to 8 weeks from the time you put in the application to the time you get your policy in the mail. You may wonder why so long and the reason is that the company has to gather your medical records, driving history and review your exam labs from the paramedical exam you did for the application. In my experience getting the doctor’s records is where the bottleneck is as far as approval times are concerned.
If you apply for their plan with traditional underwriting then their approval times are no different than say Banner Life, AIG, Prudential. However, there is something that Principal offers which makes them stand out. That is their Accelerated Underwriting program which allows people with good health to get approved after doing a simple phone interview and skipping the medical exam.
If you qualify for this you can get a no medical exam plan up to $1 million dollars within a weeks time. This is not only fast but is also the highest amount of coverage one can get without having to go through the exam and medical records. Having this fast option to secure a policy gives them an edge over other carriers. So be sure to ask about this if you feel like you’re in perfect health. (5 out of 5)
Underwriting Niches
When applying for life insurance there is no guarantee you’ll get the rate you were quoted or get approved at all. The reason is that each insurance company has an underwriting guideline which determines what kind of a risk you’re to them. If you have severe medical conditions or bad driving history you can get rated up or declined.That’s why I always ask my clients all qualifying questions and see which companies will they fair best with.
Principal is one of the few companies that is pretty aggressive in accepting higher risk clients. So whether you like to climb mountains, race cars or have a pre-existing medical condition they will try to get you covered. Although, they are not as aggressive as let’s say Prudential or AIG they do have a unique program that makes them get more clients.
This program is their underwriting point system which bumps clients up to a better category if they have healthy lifestyle, good family history, ideal build and tobacco free living. So if you originally were supposed to get a standard rate you’d get a preferred rate if you had enough points.This can make a huge difference in how much you pay for your life insurance policy.
If you have high blood pressure, cholesterol, mild asthma or thyroid disorder then Principal is probably the best choice since you’ll have the highest chance of getting the best rate. If you have severe medical conditions like diabetes, Parkinson's, history of heart attacks or any other serious ailment then you better off with Prudential, AIG or Trans America.
End Result
Principal is better than most companies when it comes to insuring people with higher risk but by far not better than some other major players we use for higher risk clients. They make up for it with the cost of coverage and their accelerated approval no exam plan.
The Good and The Bad
What’s Good
What I like about Principal is probably a bigger list than what I don’t like because it is one of my top 10 life insurance companies I like to use for my clients. First and foremost I love their reputation and strength. The company has been around for a very long time and has more financial assets than most companies out there which gives me the confidence to recommend them to our clients. I also love that they have great customer service both on the phone and online with the ability to print out any needed policy forms right from their site.
They also offer the Accelerated Underwriting Term Plans which allow healthy people to secure up to $1 million dollars of life insurance without an exam. If you ever been through a traditional underwriting process you’d understand why this is such a big deal. Their products are very solid and have all the bells and whistles available so you’re not missing out on anything by going with them. However, this probably will also be listed as the bad about them in the next few paragraphs. Let’s also not forget that their pricing is extremely competitive and they always show up in the top 10 out of 60 different companies when it comes to cost.
What can be better
There is really nothing bad to say but there is definitely some areas where the company can improve in my humble opinion. One of the biggest things I’d like to point out that they tend to come back with much higher rates for our higher risk clients in comparison to some other top companies. This is either because they don’t want that type of business or they need to make some improvements to their underwriting process. Because there are a lot of clients who have mild to moderate medical conditions who do an excellent job managing it and should not be penalized that bad for it.
Even though we mentioned their products as one of the positive things about them. It would be nice to see them switch it up on some of the add on's and benefits. Instead, their life insurance plans are no different than other carriers which is not necessarily a bad thing but a company of their size can switch things up a bit more.
Summary
Thank you for visiting us and reading our review of Principal Life Insurance Company. Based on all information this is a wonderful company to secure a life insurance or financial product with. However, bear in mind that no matter how great the company is, each individual will be better off going with a carrier that will offer them the best rate based on their risk assessment. That’s why it is important to work with an independent agency that will pre-qualify you and shop around with all the top rated insurers. That’s where we come in, so feel free to compare quotes from top companies right here on our site or call us at 888.492.1967! Welcome to the best online life insurance broker.
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