Principal Financial Group Review – Services, Pricing, and Ratings
Last Updated: 01/11/2018
AM Best Grade: A+ (Superior) 5 stars
Address: 711 High Street, Des Moines, IA 50392
Phone: 1 (800) 986-3343
Also Known As: Principal, Principal Financial
Principal Financial Group is a Fortune 500 company, and operates in 18 countries throughout North America, Asia, Europe, Australia, Latin America. In 2013, Principal ranked 528th on Forbes’ Global 2000 list, which is a list that recognizes the world’s biggest and most influential companies. The company offers a large range of products and services, such as life insurance, asset management, and retirement.
Quick Review Guide:
- Company History
- Insurance Products
- Product Pricing
- Underwriting Niches
- Customer Service & Approval Process
- Financial Stability & Ratings
- Why We Like Principal
Principal Financial Group (then known as Bankers Life Association) was founded in on July 1st, 1879 by Edward Temple – a Iowan banker. Temple and five other colleagues originally started the company to sell life insurance to men between the ages of 22 and 55. The insurance was sold as memberships, and then men had to be in good health with a low-risk occupation. If any of the men died unintentionally due to consumption of alcohol or irresponsible use of drugs, insurance benefits would not be awarded. After Edward Temple died in 1909, the Board of Directors voted to change the business into a mutual life insurance company, and George Kuhns became the company’s president. After the change, Kuhns integrated the use of direct-mail advertising to reach new markets, and brought in $3 million in new sales that year.
Things continued to go well for the company, even enduring the Great Depression with no major losses. In 1985, the company (known as The Bankers Life Company at the time) finally changed its name to the one we know today – Principal Financial Group. They then expanded to markets outside of the U.S. into countries such as China, Brazil, Chile, India, and Mexico, and soon after became the publicly traded corporation we know it as today.
Principal Financial Group offers a variety of life insurance products, which consist of:
- Term Life Insurance
- Universal Life Insurance
- Variable Universal Life
- Survivorship Life Insurance
- Group Life Insurance
Most people first opt for term life insurance – it’s less expensive, less commitment, provides tax-free money to your beneficiaries when you pass away, and has the ability to be converted into permanent life insurance if you choose to do so (as long as it is within Principal’s converting guidelines). Principal offers 10-, 15-, 20-, and 30-year term lengths, and 1-year terms for those with short-term needs.
Another type of term policy Principal offers is a no medical exam life insurance program called Principal Accelerated Underwriting. If you qualify for this policy, your application can be approved in as little as 48 hours (or less), compared to the 4 week average that it usually takes life insurance companies to approve. In addition to the quick approval time, Accelerated Writing provides coverage up to $1,000,000 (very rare for a no-med exam policy), universal life options, and leniency when it comes to weight guidelines. You must be in pretty good condition health-wise to qualify, but it’s definitely worth it if you are eligible.
If you’re willing to take a more permanent step, universal or survivorship life insurance may be a better choice. Universal life insurance is a flexible permanent life insurance option that provides low-cost protection, as well as cash value accumulation at a floating interest rate. By flexible, we mean flexibility on when you make your premium payments, how much you decide to pay each month (within reason), as well as flexibility with your death benefits and savings element (a.k.a. cash value). Variable universal life insurance is similar, but provides flexibility with a more aggressive cash value accumulation approach, gives you the ability to access tax-deferred cash values without being penalized, and allows you to convert cash values to annuities for extra income that you won’t outlive.
Lastly, Principal offers survivorship life insurance. This type of policy insures the lives of two people, and provides a death benefit payable to the beneficiaries after both people have died. The life insurance death benefit can be used to help pay estate taxes or settlement costs if not given to beneficiaries.
If you’d like to learn more about companies who offer no exam policies, check out our list of the top 10 no exam life insurance companies in 2018!
For a non-smoking, 30-year-old male Californian in the “preferred plus” risk class, Principal Financial Group offers a 20-year term ($500,000 in coverage) for $29.31/month. While it is not the cheapest option, their offer is about average when compared with other companies. Taking into account that Principal is such a financially stable and highly-rated company, their average pricing might actually be considered a steal (in our humble opinion).
However, this is just an estimate. If you aren’t sure which health category you belong to, have no fear! Speak with one of our licensed agents today and tell them any dangerous or semi-dangerous hobbies you participate in, any specific medical conditions you may have, etc., and they’ll help decide if Principal Financial Group is the best life insurance company for you.
When applying for life insurance, you have to interview with an underwriter, who will determine your health status and place you in a class. Luckily, each company has underwriting niches or leniencies that can ultimately get you better rates. Some of Principal’s leniencies include:
Leniency to Those Over 70
In general, most life insurance companies, including Principal, are much more lenient toward those ages 71 or older when it comes to underwriting. So if you fall into this category but maybe have a few medical conditions, you may still qualify for great rates.
To qualify for “preferred” rates with Principal: those ages 20-44 cannot have blood pressure levels higher than 140/85, those who are ages 45-64 cannot exceed levels of 140/90, and anyone ages 65-85 must have levels of 145/90 or lower. If you are in the age range of 20-64 and have blood pressure levels of 145/90 or less, you can still qualify for their “super standard”, or standard rates.
To be a candidate for “preferred” rates regarding cholesterol, for ages 20-64 your total cholesterol cannot exceed 270, and your cholesterol/HDL ratio cannot exceed 5.5. For ages 65-85, total cholesterol cannot be higher than 280, and your cholesterol/HDL ratio cannot exceed 6.0 (medication may be disregarded). In terms of cholesterol maximum averages among life insurance companies, Principal does seem to have a little more leniency, so this may be a good choice if your levels are a little higher.
The “preferred” rate guidelines for tobacco use is as follows: no use for two years for ages 20-70, and no use for three years with those ages 71-85. Regarding cigars, you are allowed to smoke up to 12 a year as long as urine comes back negative for other tobacco use. Many companies won’t offer “preferred” until the 5 year mark of no use, so this is a great option for those in-betweeners.
There should be no abuse of alcohol or drugs within the last 10 years to get a “preferred” rating. If you want the absolute best rates, there should be no substance abuse history at all.
Customer Service & Approval Process
Now we’re going to be completely honest with you – Principal (like any other company) is not perfect. Principal Financial Group is a BBB accredited business, and their website states that Principal has received and closed 76 complaints over the past three years, 32 of which have been closed in the last 12 months. In relation to other companies, 76 complaints in three years for such a large company is actually not too bad. And it’s not all bad, of course! There have been many positive reviews as well. Here’s one satisfied customer review:
“I had a 401k through my employer which was invested with Principal. I could go online and check my investment activity…I can makes changes when I please from one type of investment to another. Still, there is always my appointed reliable and knowledgeable investment broker ready to answer questions by phone. I am now receiving a small monthly disbursement. It is automatically deposited to my checking account, and always on time…I have not had one problem with the handling of my 401k or my present IRA. Principal Financial Group is a great company with which to do business.”
Let’s talk about the approval process: if you are eligible and opt to go for the no-exam route, the whole process only takes up to 48 hours (as discussed earlier). If you need to take a medical exam during your application process, the whole thing is still pretty fast. Principal reported that their underwriting takes on average of five days to a week before an applicant is approved. Many other companies can take three to four weeks, so Principal really crushes the competition with their fast approval times.
Financial Stability & Ratings
When you sign on with a new company, it’s always a smart move to research the company’s financial strength to make sure you’re in good hands. The life insurance industry is a very heavy regulated industry, not only getting rankings from four independent rating agencies, but also appointing a commissioner in each state to oversee each company’s operations.
As of 2017, Principal Financial Group has over $692 billion in total assets under management, delivered more than $19 billion in positive net cash flows, and received a “stable outlook” rating from all four independent rating companies.
Principal Financial Group’s Financial Stability Ratings:
- A.M. Best: A+ (Superior)
- Fitch: AA- (Very Strong)
- Standard & Poor’s: A+ (Strong)
- Moody’s: A1 (Good)
Why We Like Principal Financial Group
At Term Life Advice, we represent over 60 companies; making sure each company we represent is a strong and reliable company. In this article, we discussed all the great qualities that Principal Financial Group holds. Here’s a brief overview of what those are:
- Over a 135-year history of brilliance
- Term, universal, group, and survivorship life insurance options
- Multiple underwriting leniencies
- Additional policy benefits
- Competitive and affordable pricing
- Great customer service
- High ratings from the big four rating companies
Term Life Advice is an owner-operated life insurance agency that works directly with highly-rated life insurance companies including Principal Financial Group. This could be the perfect company for you; but it is always best to shop around and compare rates to make sure that you and your new life insurance company are fully compatible.
If you’d like to get an accurate quote based on your age and health, or to determine if Principal Financial Group is your best choice for coverage, give us a call today toll-free at: 855-902-6494. Our services are free, and our agency can quickly compare your options and rates by asking you a few questions about your health and lifestyle.
You can also request a free instant quote online below to instantly compare rates from more than 60 highly-rated life insurance companies in less than a minute.