The Principal Financial Life Insurance Review 2016

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The Principal Financial Group is one of the leading providers of life insurance in the U.S., with a comprehensive selection of term life and whole life insurance packages to suit a variety of needs. The company’s online life insurance quotes calculator makes it easy to get a personalized price for term life coverage, but before you sign on the dotted line, take the time to consider all aspects of the business, including its financial strength and customer service record.

Company Profile

The Principal Financial Group, often called The Principal, is a family of companies offering financial services and divisions, including the Principal Life Insurance Company and the Principal National Life Insurance Company. It dates back to 1879 and has grown to become a global investment management leader and a member of the Fortune 500. The company has an impressive list of recognitions and financial achievements:

  • Named World’s Most Ethical Company by Ethisphere Institute in 2015
  • Named one of America’s Best Employers by Forbes in 2015
  • Received over 90 Best in Class designations over 10 years from the Defined Contribution Services Survey by PLANSPONSOR magazine
  • Holds $572.7 billion assets under management

The Principal was the seventh top writer of life insurance, health insurance and annuities in 2015, according to statistics published by the Insurance Information Institute. The company wrote direct premiums of $23,416,059, which amounts to 3.8% of the market.

Financial Strength

When you take out a life insurance policy, you need the peace of mind that comes from knowing the company that sells you the policy has the financial strength to stay in business and pay your death benefit when the time comes. Financial credit ratings from companies such as A.M. Best and Standard & Poor’s are good indicators of a company’s investability and the potential it has to generate wealth in the future. The Principal Life Insurance Company holds high ratings with all four of the major rating companies.

Rating companyRatingOutlook
Moody's Investors ServiceA1 (good)Stable
Standard & Poor'sA+ (strong)Stable
A.M. BestA+ (superior)Stable
Fitch RatingsAA- (very strong)Stable


Another factor to consider when choosing life insurance is how many complaints the issuing company receives. The complaint ratio statistics published by the National Association of Insurance Commissioners is a good indicator of a company’s customer service, as it represents the company’s U.S. Market Share of closed complaints compared to the company’s U.S. Market Share of premiums for a specific policy type. The national median is 1, so any company scoring less than 1 has a very low number of complaints for its size. The Principal Life Insurance Company has a very low complaint ratio for its individual life insurance policies, although it has increased year on year since 2013:

  • 2015: 0.09
  • 2014: 0.07
  • 2013: 0.08

Because state insurance departments provide this data voluntarily, it may be incomplete, so you shouldn’t use the published complaint ratio as the sole basis for making an insurance purchase. Read reviews and consider word-of-mouth recommendations, too.

Available Insurance Products

The Principal offers term life insurance and whole (permanent) life insurance. Each product type has its specific advantages.

Term Life

The Principal’s term life insurance is a cost-effective option that’s particularly well-suited to cover diminishing costs, such as the balance of your mortgage. The policy is in effect for a defined term, with options ranging from 1–30 years, and you have an opportunity to convert to a whole life insurance policy with the same benefit without the need to provide further evidence of insurability. Premiums vary based on your age, gender, desired term length and whether or not you’re a smoker. For example:

  • 30-year-old non-smoking male in CA requiring $200,000 for 30 years = $19 per month
  • 30-year-old non-smoking female in CA requiring $200,000 for 30 years = $16 per month

For an even more thorough depiction of how The Principal’s term life insurance stacks up against a number of competitors, review the table below to get a better idea of what you might expect to pay. This table reviews the average annual premiums for a $500,000, 20-year term life insurance policy for healthy, nonsmoking men and women ages 30 and 40.

CompanyAnnual Premium for Men Age 30Annual Premium for Women Age 30Annual Premium for Men Age 40Annual Premium for Women Age 40
American General$244$209$354$329
Protective Life$245$216$348$304
Mutual of Omaha$248$218$383$323
Banner Life$250$215$415$310
John Hancock$280$245$490$370
The Principal$290$250$422$335
Accordia Life$305$275$450$390
Minnesota Life$310$275$440$380
Lincoln Financial Group$325$270$445$350

Whole Life

Whole life insurance lasts for your entire life and guarantees a death benefit while it also accrues cash value, which makes it a good way to ensure your family’s financial security. The Principal offers three types of whole life insurance: universal life insurance, variable universal life insurance and survivorship insurance. Universal life policies offer additional flexibility, while survivorship insurance covers two lives and makes it possible to leverage certain tax deductions while you do your estate planning.


With so many insurance providers operating throughout America, each determined to snag a share of the market, choosing the right one for you and your family may seem like a daunting prospect. It may seem that Principal Financial checks all the boxes with its impressive financial position, low complaint ratio and comprehensive coverage options, but it pays to research other possibilities by reading reviews and comparing companies using online comparison tools. Bear in mind that the right product for your family may not be the cheapest, and it may not come from one of the larger insurance providers. The ideal product is one that matches your requirements closely and comes from a reliable provider. The chances of finding something that fulfills your needs increases as you consider more options.


Kevin Outlaw
Kevin Outlaw is a freelance writer, blogger, and editor. His passion for the written word, and his desire to help people succeed, is apparent in the articles and blogs he has written for many industry-leading websites.

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