Principal Life Insurance operates quietly behind household names like State Farm and Allstate, yet manages over $200 billion in assets while serving millions of customers who discovered this Des Moines-based company through employer benefits or independent agents specializing in underserved markets. While Principal doesn’t command the brand recognition of industry giants, they’ve certainly carved out a significant niche serving specific customer segments that larger companies often overlook.
So the question shouldn’t be whether or not Principal Life ranks among the most recognizable insurance brands – it doesn’t. Instead, the critical consideration is whether their specialized approach to underwriting, competitive product offerings, and particular strengths align with your specific life insurance needs and risk profile. Our comprehensive analysis reveals both the compelling advantages and notable limitations that define the Principal Life Insurance experience.
Bottom Line
Principal Life Insurance offers solid financial strength and competitive products, particularly excelling in employer group benefits and serving customers with moderate health conditions that larger companies might decline.
“The Insurance Brokers USA Team consists of licensed insurance professionals with extensive experience evaluating life insurance companies across all market segments. Our agents have worked with Principal Life Insurance for over a decade, specializing in matching their unique underwriting approach with appropriate client profiles.”
– Insurance Brokers USA Team
What is Principal Life Insurance’s Financial Strength?
Principal Financial Group, the parent company of Principal Life Insurance, demonstrates solid financial fundamentals that support its insurance obligations. Founded in 1879, the company has weathered multiple economic cycles while maintaining consistent operations and growth.
Key insight: Principal Life Insurance maintains strong financial ratings that reflect stability and reliability, though they don’t quite reach the elite tier occupied by companies like Northwestern Mutual or New York Life. This positioning translates to competitive advantages in pricing while maintaining adequate security for policyholders.
Financial Ratings and Stability Indicators
Principal Life Insurance Financial Ratings
| Rating Agency | Current Rating | Outlook |
|---|---|---|
| A.M. Best | A+ (Superior) | Stable |
| Standard & Poor’s | A+ (Strong) | Stable |
| Moody’s | A1 (Good) | Stable |
| Fitch | A+ (Strong) | Stable |
Key Financial Metrics
Principal Life Insurance’s financial position demonstrates several strengths:
- Assets Under Management: Over $200 billion across all business lines
- Capital and Surplus: Strong surplus position supporting policy obligations
- Claims-Paying Ability: Consistent history of meeting all policy obligations
- Diversified Revenue: Multiple business lines reducing concentration risk
Key Takeaways
- Principal maintains solid A+ ratings from major rating agencies
- Financial strength supports all policy obligations and claims
- Diversified business model provides stability during economic downturns
- Ratings position allows competitive pricing while maintaining security
Historical Performance and Stability
Principal Life Insurance has demonstrated consistent performance through various economic cycles, including the 2008 financial crisis and COVID-19 pandemic. The company’s diversified approach across life insurance, retirement services, and asset management provides stability that benefits policyholders.
What Products and Coverage Does Principal Offer?
Principal Life Insurance offers a comprehensive portfolio of life insurance products designed to serve different customer needs and risk profiles. Their product lineup emphasizes practical coverage options with competitive features rather than innovative bells and whistles.
Term Life Insurance Products
Principal’s term life insurance products provide straightforward coverage with several attractive features:
- SimplyTerm: Basic term coverage with conversion options
- Level Premium Term: 10, 15, 20, and 30-year level premium periods
- Annual Renewable Term: Flexible coverage with yearly renewable options
- Coverage Amounts: $100,000 to $10 million depending on age and underwriting
Permanent Life Insurance Options
Principal offers several permanent life insurance products with cash value accumulation:
- Whole Life: Traditional whole life with guaranteed cash values
- Universal Life: Flexible premium universal life with competitive interest rates
- Variable Universal Life: Investment options with variable returns
- Indexed Universal Life: Market-linked growth potential with downside protection
Bottom Line
Principal’s product lineup covers all major life insurance categories with competitive features, though they excel particularly in straightforward term coverage and employer group benefits.
Specialized Products and Riders
Principal enhances their basic products with several valuable riders and specialized options:
- Disability Income Rider: Monthly income if unable to work
- Accelerated Death Benefit: Early access to death benefits for terminal illness
- Child Term Rider: Coverage for children with conversion options
- Accidental Death Benefit: Additional coverage for accidental deaths
- Waiver of Premium: Continues coverage if disabled
Group and Employer Benefits
Principal Life Insurance particularly excels in employer-sponsored group coverage:
- Group term life insurance for employees
- Voluntary life insurance programs
- Dependent coverage options
- Portability features for terminated employees
- Integration with retirement and health benefits
For individuals seeking no-exam coverage options that Principal offers, our comprehensive guide on Top 10 Best No Exam Life Insurance Companies (2025 Update) includes detailed analysis of Principal’s simplified issue products and health question requirements.
“In our opinion, one of Principal’s greatest strengths lies in their practical approach to product design. They focus on features that customers actually use rather than complex riders that sound impressive but add little value to most policyholders.”
– InsuranceBrokers USA – Management Team
How Does Principal’s Underwriting Work?
Principal Life Insurance maintains a balanced underwriting approach that often provides opportunities for applicants who might face challenges with more conservative companies. Their underwriting philosophy emphasizes individual risk assessment rather than automatic decline categories.
Underwriting Philosophy and Approach
Key insight: Principal’s underwriters tend to take a more holistic view of applicant risk, considering factors like treatment compliance, lifestyle management, and overall health trajectory rather than focusing solely on diagnosis codes.
Principal’s underwriting characteristics include:
- Moderate risk tolerance: Willing to consider cases other companies might decline
- Individual assessment: Looks beyond standard risk categories
- Reasonable medical requirements: Appropriate testing without excessive requirements
- Competitive age limits: Coverage available into older ages
Medical Underwriting and Health Conditions
Principal demonstrates particular flexibility with certain health conditions:
Principal’s Underwriting Approach by Condition Type
| Condition Category | Principal’s Approach | Typical Outcome |
|---|---|---|
| Diabetes | Considers control and compliance | Moderate ratings |
| Heart Conditions | Individual case review | Variable ratings |
| Mental Health | Stability-focused evaluation | Often approved |
| Cancer History | Time and type-dependent | Case-by-case |
Application Process and Timeline
Principal’s application process follows industry standards with some efficiency advantages:
- Initial Application: Online or paper application with health questionnaire
- Medical Exam: Typically required for coverage over $250,000
- Medical Records: Requested from physicians for relevant conditions
- Underwriting Review: Comprehensive evaluation by medical underwriters
- Decision: Approval, decline, or counter-offer typically within 4-6 weeks
Simplified Issue and No-Exam Options
Principal offers streamlined underwriting for certain coverage amounts and age groups:
- No medical exam required for coverage under $250,000 (age-dependent)
- Simplified health questionnaires for straightforward cases
- Accelerated underwriting for preferred health profiles
- Group coverage with minimal individual underwriting
For detailed information about specific medical conditions and Principal’s underwriting approach, explore our comprehensive guide on Life Insurance Approvals with Pre-Existing Medical Conditions, which includes company-specific underwriting guidelines.
Key Takeaways
- Principal takes a more flexible approach to medical underwriting than many competitors
- Individual risk assessment often benefits applicants with controlled health conditions
- Reasonable medical requirements without excessive testing demands
- Competitive options for simplified issue and no-exam coverage
What About Customer Service and Claims?
Principal Life Insurance provides solid customer service through multiple channels, though they don’t necessarily excel in any particular area compared to industry leaders. Their claims processing demonstrates reliability and fairness in handling policyholder requests.
Customer Service Channels and Availability
Principal offers standard customer service options with reasonable accessibility:
- Phone Support: Available during business hours with experienced representatives
- Online Portal: Policy management, payment processing, and document access
- Mobile App: Basic policy information and account management
- Agent Network: Local agent support for complex questions
- Written Correspondence: Traditional mail and email options
Claims Processing and Payment
Principal’s claims department maintains industry-standard practices with generally positive outcomes:
- Claims Timeline: Typical processing within 10-15 business days
- Documentation Requirements: Standard death certificate and claim forms
- Payment Options: Lump sum, installments, or interest-bearing accounts
- Dispute Resolution: Internal review process with external arbitration options
Bottom Line
Principal’s customer service performs adequately without notable excellence or significant problems, making it suitable for customers who prefer straightforward, no-frills service experiences.
Customer Satisfaction and Reviews
Principal Life Insurance receives mixed reviews from customers and industry evaluations:
- Positive feedback: Reliable claims processing, reasonable customer service
- Common complaints: Limited online features, slower response times
- Industry ratings: Average performance compared to top-tier companies
- Agent satisfaction: Generally positive relationships with distribution partners
Technology and Digital Experience
Principal’s technology offerings meet basic needs without leading-edge features:
- Functional online policy management portal
- Mobile app with essential features
- Electronic document delivery options
- Online payment processing capabilities
- Digital application processes for certain products
“In our opinion, Principal’s customer service operates efficiently for routine transactions and standard policy management. They excel in group benefits administration but may lack the premium service features offered by higher-end carriers.”
– InsuranceBrokers USA – Management Team
How Competitive Are Principal’s Rates?
Principal Life Insurance generally offers competitive pricing across their product portfolio, particularly for customers with moderate health conditions or those seeking group coverage. Their pricing strategy focuses on value rather than being the absolute lowest cost option.
Term Life Insurance Pricing
Principal’s term life insurance rates position competitively in most markets:
- Healthy applicants: Rates typically fall in the middle tier of market pricing
- Standard health risks: Often more competitive than top-tier companies
- Age-specific pricing: Particularly competitive for ages 40-60
- Large coverage amounts: Competitive pricing for $1 million+ policies
Sample Term Life Insurance Rates (Healthy Non-Smoker)
| Age/Gender | $500K 20-Year Term | Market Position |
|---|---|---|
| 35-Year-Old Male | $35-40/month | Mid-tier competitive |
| 35-Year-Old Female | $30-35/month | Mid-tier competitive |
| 45-Year-Old Male | $70-80/month | Competitive |
| 45-Year-Old Female | $55-65/month | Competitive |
Permanent Life Insurance Value Proposition
Principal’s permanent life insurance products offer reasonable value for their features:
- Whole life: Competitive dividends and cash value growth
- Universal life: Current interest rates in line with market standards
- Variable products: Reasonable investment options and fees
- Indexed products: Competitive caps and participation rates
Factors Affecting Premium Rates
Several factors influence Principal’s pricing competitiveness for individual applicants:
- Health condition complexity and management
- Age and gender demographics
- Coverage amount and product type
- Geographic location and market competition
- Agent commission structure and fees
Key Takeaways
- Principal offers competitive pricing, particularly for standard and substandard health risks
- Rates typically fall in the middle tier of market pricing for healthy applicants
- Strong value proposition for group and employer-sponsored coverage
- Permanent products offer reasonable features and competitive performance
What Are Principal’s Pros and Cons?
Principal Life Insurance presents a balanced profile with specific strengths that serve certain customer segments well, along with limitations that may make other companies more suitable for some applicants.
Principal Life Insurance Advantages
Principal Life Insurance Strengths
- Financial Stability: Solid A+ ratings from major rating agencies provide security
- Flexible Underwriting: More willing to consider moderate health conditions than many competitors
- Group Benefits Excellence: Strong reputation in employer-sponsored coverage
- Reasonable Pricing: Competitive rates, particularly for standard health risks
- Product Variety: Complete portfolio covering all major life insurance needs
- Claims Reliability: Consistent history of paying valid claims promptly
- Agent Support: Good relationships with independent agent network
Principal Life Insurance Disadvantages
Principal Life Insurance Limitations
- Limited Brand Recognition: Lower consumer awareness compared to household names
- Technology Gaps: Digital experience lags behind innovative companies
- Premium Rates for Preferred Risks: May not offer the lowest rates for super-healthy applicants
- Customer Service: Adequate but not exceptional service experience
- Product Innovation: Conservative approach to new product development
- Geographic Limitations: Not available in all states for all products
- Online Presence: Limited direct-to-consumer digital capabilities
Bottom Line
Principal Life Insurance works best for customers who value financial stability and flexible underwriting over brand prestige and cutting-edge technology features.
Ideal vs. Poor Fit Scenarios
Principal works well for:
- Applicants with moderate health conditions seeking fair underwriting
- Employees seeking group life insurance through employer benefits
- Customers prioritizing financial stability over brand recognition
- Those needing straightforward coverage without complex features
Principal may not be ideal for:
- Super-healthy applicants seeking the absolute lowest rates
- Tech-focused customers wanting advanced digital experiences
- Those prioritizing household name brand recognition
- Customers requiring innovative product features
“Principal Life Insurance represents solid middle-market value. They’re neither the cheapest nor the most expensive, neither the most innovative nor the most traditional. This positioning serves many customers well who want reliable coverage without paying premium prices.”
– InsuranceBrokers USA – Management Team
Who Should Consider Principal Life Insurance?
Principal Life Insurance serves specific customer segments particularly well, making it an excellent choice for certain scenarios while being less optimal for others. Understanding these ideal customer profiles helps determine whether Principal aligns with your specific needs.
Primary Target Customer Profiles
- Employees Seeking Group Coverage: Principal excels in employer-sponsored benefits, offering comprehensive group life insurance with competitive rates and reliable service.
- Standard Health Risk Applicants: Individuals with well-controlled diabetes, mild heart conditions, or other moderate health issues often find Principal’s underwriting more accommodating than stricter companies.
- Middle-Market Families: Those seeking solid coverage from a financially stable company without paying premium prices for brand name recognition.
Specific Scenarios Where Principal Excels
- Health Condition Flexibility: Applicants declined by Northwestern Mutual or New York Life due to medical conditions
- Group Insurance Needs: Employers seeking comprehensive benefits packages for employees
- Moderate Coverage Amounts: $100,000 to $1 million coverage needs with straightforward requirements
- Standard Risk Pricing: Customers who don’t qualify for super-preferred health classifications
- Agent Relationships: Working with independent agents who specialize in Principal products
Key Takeaways
- Principal works best for standard health risks seeking fair underwriting treatment
- Excellent choice for employer group benefits and employee coverage
- Suitable for customers prioritizing financial stability over brand prestige
- Good option when other companies have declined coverage due to health conditions
Age and Income Demographics
Principal serves these demographic segments particularly well:
- Ages 35-65: Prime demographic for Principal’s competitive positioning
- Middle-income families: $50,000-$150,000 household income range
- Working professionals: Employees with access to group benefits
- Small business owners: Seeking straightforward coverage for business planning
When to Consider Alternatives
Principal may not be the optimal choice for:
- Super-healthy individuals seeking the absolute lowest rates available
- High-net-worth clients requiring specialized wealth transfer strategies
- Tech-savvy customers prioritizing advanced digital experiences
- Those specifically wanting household name brand recognition
For a broader context on evaluating life insurance companies, explore our comprehensive rankings in Top 10 Best Life Insurance Companies in the U.S. (2025): Expert Broker Rankings, which compares Principal against industry leaders across multiple criteria.
How Does Principal Compare to Alternatives?
Understanding how Principal Life Insurance compares to similar companies helps determine whether their specific strengths align with your priorities or whether alternatives might serve your needs better.
Direct Competitors Comparison
Principal vs. Similar Companies
| Company | Financial Rating | Primary Strength | Best For |
|---|---|---|---|
| Principal | A+ | Flexible underwriting | Standard health risks |
| Lincoln Financial | A | Competitive pricing | Healthy applicants |
| Transamerica | A | Product variety | Diverse needs |
| Prudential | AA- | Financial strength | Conservative buyers |
Premium Company Alternatives
For customers considering higher-tier companies, Principal compares as follows:
- Northwestern Mutual: Superior financial strength and dividends, but stricter underwriting and higher costs
- New York Life: Excellent financial ratings and brand recognition, but limited flexibility for health conditions
- MassMutual: Strong mutual company structure, but more conservative underwriting approach
Budget-Friendly Alternatives
Companies offering potentially lower costs than Principal include:
- Term life specialists: Companies like Banner Life or SBLI for pure term coverage
- Direct-to-consumer companies: Online-focused insurers with lower overhead costs
- Regional companies: Local insurers that may offer competitive rates in specific markets
Specialized Alternative Companies
For specific needs that Principal might not address optimally:
- Final expense specialists: Companies like Gerber Life for smaller coverage amounts
- High-risk specialists: Insurers that focus on difficult-to-place cases
- No-exam specialists: Companies offering streamlined simplified issue products
For customers interested in final expense coverage that Principal offers, our detailed analysis of Best Final Expense Insurance Companies of 2025 compares Principal against specialists in this market segment.
Bottom Line
Principal Life Insurance occupies a valuable middle ground between premium companies and budget alternatives, offering solid financial strength with flexible underwriting at reasonable prices.
Decision Framework for Choosing Principal
Consider Principal Life Insurance when:
- You have moderate health conditions that might challenge stricter underwriters
- You prioritize financial stability over absolute lowest cost
- You’re seeking group coverage through employer benefits
- You want straightforward products without complex features
- You’re working with an agent who specializes in Principal products
For immediate assistance evaluating whether Principal Life Insurance aligns with your specific needs and comparing alternatives, contact our team at 888-211-6171 for a personalized consultation about your life insurance options.
“Principal Life Insurance serves as an excellent middle-market option for customers who want more than budget coverage but don’t need premium company features. Their underwriting flexibility often provides solutions when household names say no.”
– Independent Insurance Broker
Frequently Asked Questions
Is Principal Life Insurance a reputable company?
Direct answer: Yes, Principal Life Insurance is a well-established, financially stable company with A+ ratings from major rating agencies.
Founded in 1879, Principal has operated for over 140 years and maintains strong financial ratings that indicate their ability to meet policyholder obligations. While they may not have the household name recognition of some competitors, they represent a solid, reliable choice for life insurance coverage.
How does Principal’s underwriting compare to other companies?
Direct answer: Principal tends to be more flexible with health conditions than many top-tier companies, often approving cases that others might decline.
Their underwriters take a more holistic approach to risk assessment, considering factors like treatment compliance and lifestyle management rather than automatically declining based on diagnosis codes. This makes them particularly valuable for applicants with diabetes, mild heart conditions, or controlled mental health conditions.
Are Principal’s life insurance rates competitive?
Direct answer: Principal’s rates are generally competitive, particularly for standard health risks, though they may not offer the lowest rates for super-healthy applicants.
Their pricing typically falls in the middle tier of the market for healthy applicants, but they often provide better value for individuals with health conditions due to their more favorable underwriting. The combination of reasonable rates and approval flexibility often results in better overall value than cheaper companies that decline coverage.
What types of life insurance does Principal offer?
Direct answer: Principal offers a complete range of life insurance products including term life, whole life, universal life, variable life, and indexed universal life insurance.
They also provide various riders and options such as disability income riders, accelerated death benefits, and child term coverage. Principal particularly excels in group life insurance through employer benefits, offering comprehensive coverage options for employees and their families.
How long does Principal’s application process take?
Direct answer: Principal’s application process 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 how quickly medical records are obtained from physicians. They offer expedited underwriting for certain coverage amounts and health profiles, which can reduce the timeline to 2-3 weeks for straightforward cases.
Does Principal offer no-exam life insurance options?
Direct answer: Yes, Principal offers simplified issue life insurance that doesn’t require a medical exam for certain coverage amounts and age groups.
No-exam options are typically available for coverage under $250,000, depending on age and health questionnaire responses. They also offer accelerated underwriting for preferred health profiles, which can eliminate the medical exam requirement even for larger coverage amounts in some cases.
How does Principal handle claims and what is their reputation for paying benefits?
Direct answer: Principal has a solid reputation for paying valid claims promptly, typically processing death benefit claims within 10-15 business days.
They maintain standard industry practices for claims processing and offer multiple payment options including lump sum distributions, installment payments, or interest-bearing accounts. Their financial strength ratings support their ability to meet all policy obligations, and they have a consistent history of paying claims without unnecessary delays or disputes.
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