Types of Life Insurance Sold by Principal
Principal term life insurance
Principal offers two types of term life insurance for business owners—group term life insurance and voluntary term life insurance.
Principal offers guaranteed issue term life insurance that business owners can use for themselves and key employees. Coverage up to $5 million per policy is available, with level premiums for 10 or 20 years.
Some group life insurance policies from Principal come with access to some helpful benefits, which include a will and legal document center, an emotional health support line and an identity theft protection kit.
Principal also offers group term life insurance that you can offer to your employees. You can choose to pay all, part or none of the group life insurance premiums for your employees, depending on your business budget. Additionally, you can offer Principal’s voluntary term life, which allows employees to increase their coverage at their expenses and/or add life insurance for their dependents.
Principal’s universal life insurance
Universal life insurance might be a good fit for you if you’re looking for lifelong coverage. When you have a policy that builds cash value, you can withdraw or take loans from the cash value for any reason.
Principal Universal Life Flex III offers flexible death benefits and premiums, and the potential for cash value accumulation. The death benefit is offered in three ways:
- Face amount by itself
- Face amount plus cash value
- Face amount plus premiums paid, minus loans and partial surrenders
You can withdraw or borrow against the cash value you accumulate.
Coverage amounts range from $100,000 and up for businesses and from $25,000 and up for individual buyers. People ages 0 to 85 may apply. Those who qualify can get a Universal Life Index III policy without a life insurance medical exam.
Principal Universal Life Flex III offers a guaranteed minimum annual rate of 1% for cash value accumulation.
Principal also offers Universal Life Provider Edge II for people ages 20 to 85. It has a minimum death benefit of $100,000. Those who qualify can get a Provider Edge II policy without a life insurance medical exam.
Principal also sells the Principal Survivorship Universal Life Provider policy. It covers two people under one policy and pays the death benefit when both individuals have passed away.
It’s ideal for those with legacy or estate planning needs, or for transitioning a business when a business owner has died. A big bonus: One applicant for the Survivorship Universal Life
Provider policy can be an uninsurable risk. That means the survivorship policy can be a vehicle for providing life insurance to someone who may otherwise not be able to buy coverage due to health issues.
Other key features of Principal’s survivorship life insurance include:
- Optional extended no-lapse guarantee means locked in coverage to the age of 100 for the youngest person on the policy.
- The survivor can tap into the death benefit if diagnosed with a chronic or terminal illness.
- Available for term conversions.
Principal’s indexed universal life insurance
Indexed universal life insurance may be worth considering if you’re looking for the potential to grow cash value based on an index, like an S&P 500 index. These policies also often have the flexibility to vary premiums and death benefits. Be sure to review the participation caps and fees so you’re fully aware of how the policy works.
Principal Indexed Universal Life Flex II is for people ages 20 to 85 and offers a minimum death benefit of $100,000. It gives you a flexible premium with death benefit protection in three options: fixed, increasing (based on cash value) and return of premium.
The Indexed Universal Life Flex II allows you to grow cash value based on the S&P 500 Price Return Index or the S&P 500 Total Return Index. Or choose a fixed-rate account. The policy’s cash value has a 0% growth floor and a growth cap never less than 3%.
Principal also offers another indexed universal life insurance product: the Indexed Accumulation II.
Principal’s variable universal life insurance
Variable life insurance is not a “set it and forget it” type of policy. Variable life insurance may be an attractive choice for those with long-term insurance, investment and tax-planning needs, and who are also comfortable having an active role in deciding investment options.
You can take withdrawals or loans from the cash value the policy accumulates, but the policy can lapse if the cash value amount gets too low to cover the fees that are charged each month by the insurance company.
The value of the cash value portion of a variable life insurance policy is based on premiums paid, fees and expenses charged by the insurance company, the performance of the investments and loans and withdrawals taken.
Principal sells two variable universal life insurance products—Executive VUL III and VUL Income IV. Both are designed to accumulate cash value based on market performance. There is no limit to earnings or losses, which means there’s the potential for bigger growth compared to other types of universal life insurance, but there is also a higher risk.
Executive VUL III is designed specifically for business owners and has a minimum death benefit of $100,000.
VUL Income IV has a minimum death benefit of $100,000 and qualified applicants can get coverage within 24 hours without a medical exam.
Other Types of Insurance Sold by Principal
Group accident insurance
Group accident insurance from Principal can be added to a benefits package and pays an up-front, lump-sum benefit to employees who are injured in an accident that’s covered by the policy.
Group accidental death and dismemberment (AD&D) insurance
Business owners can add Principal’s AD&D insurance to their group life insurance benefits package.
Group critical illness insurance
Principal’s critical illness insurance is another offering that business owners can add to group life insurance choices for employees. It pays out a lump-sum benefit if an employee is diagnosed with a qualifying critical illness.
Principal’s Life Insurance Riders
Riders are supplemental coverage that can be added to a life insurance policy. Life insurance riders can tailor your coverage to better fit your needs and provide coverage in specific situations that your standard policy excludes. The riders available will depend on the policy you have, your age and your location.
Principal’s life insurance riders include:
- Alternate surrender value rider offers higher early cash surrender amounts for business-owned policies that can improve the company’s financial health.
- Business value increase rider offers face amount increases every three years based on increases in the value of your business.
- Change of insured rider allows you to switch from one insured person to another as long as the new person is under age 69 and doesn’t have any serious health conditions.
- Children term insurance rider adds coverage on a child.
- Chronic illness rider allows you to use your death benefit money immediately after being diagnosed with a chronic illness and use the money however you like.
- Cost of living increase rider allows you to increase your coverage—for an extra cost— every three years until age 55.
- Death benefit guarantee rider guarantees the policy will not lapse before age 85 as long as certain premium conditions are met.
- Enhanced cash surrender value rider can provide high cash-surrender values early in the life of your policy. It pays the net value of your policy plus an additional amount if the policy is fully surrendered.
- Extended no-lapse guarantee can keep your policy from lapsing regardless of the net cash value amount.
- Life paid-up rider is a safeguard that prevents your policy from lapsing when you take loans and withdrawals against the cash value.
- Salary increase rider allows you to annually increase your coverage as your salary increases without taking any additional medical exams.
- Terminal illness rider allows you to access a portion of your death benefit if you’re diagnosed with a qualifying terminal illness.
- Waiver of monthly policy charge rider applies if you have a qualifying disability—you no longer have to pay monthly charges.
Principal Life Insurance Customer Satisfaction
Principal matched the industry average for customer satisfaction in J.D. Power’s 2021 Individual Life Insurance Study. Out of 21 large life insurance companies evaluated, Principal ranked tenth, with a score of 776 (out of 1,000).
State Farm topped the list (882), followed by Nationwide (813), Northwestern Mutual (807), Pacific Life (801) and Mutual of Omaha (795).
Principal Company History
Principal Life Insurance is a Fortune 500 company that was established in 1879 and is based in Des Moines, Iowa. For more than 140 years, Principal has been selling insurance and retirement products to individuals and businesses in multiple countries. The company has more than 50 million customers and 18,500 employees worldwide.
In 2021, Principal announced that it would stop selling individual life insurance products, focusing only on life insurance for business owners and businesses.
Principal Charitable Causes
As part of Principal Life Insurance’s environmental, social and governance (ESG) strategy, the company pledged $30 million over the next two years to advance economic mobility and financial empowerment through the Principal Foundation. In addition, the company partnered with Kiva to provide more than 31,000 microloans to female entrepreneurs in 35 countries.
Between 2021 and 2022, Principal reduced its net greenhouse gas emissions by 6.5%. Last year, the company issued its first sustainability bond for $600 million to finance sustainability initiatives, like green buildings, renewable energy, pollution prevention and control and clean transportation.
Principal Quick Facts
- Location of headquarters: Des Moines, Iowa
- Assets: $714 billion
- How to buy Principal life insurance: Principal’s life insurance products are sold through financial professionals. A form available on Principal’s website will connect you to an agent.
Principal Life Insurance Review 2022 – Forbes Advisor - Forbes
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