Principal Financial Group works with its clients to build, protect and advance each clients financial health via insurance, asset management, retirement solutions. Better known as simply “Principal”, the company is a global force and certainly ranks as one of the best life insurance companies in the world.
In the following review of Principal Financial we will take a look at the history of the company, its financials, ratings, products, riders and anything else of value as we bring to you the best Principal Financial Life Insurance review available.
Review of Principal Financial Life Insurance
Principal Financial offers great choices on the top universal life insurance policies available. The company also offers some unique automated accelerated underwriting on its permanent coverage that makes it onto our list of best life insurance no exam companies for cash value growth. So with that in mind, let’s take a look at how Principal Financial got to where it is today.
About Principal Financial Group
Founded back in 1879, Principal began as Bankers Life Association, founded by Edward Temple. In 1985, Bankers Life became the Principal Financial Group. From its humble beginnings over 138 years ago, the Principal has grown mightily. The company currently has over $629 billion in assets under management. The company employs over 14,000 people globally, with over 10,000 employees in the United States alone.
As of June 2016, Principal Financial Group ranked 236 on the Fortune 500 companies list based on revenues. The company is publicly traded and has been a member of the S&P 500 index since 2002.
Principal Life Insurance Financial Ratings
Principal Life Insurance Company’s ratings:
- A.M. Best: A+, Superior
- Fitch: AA-, Very Strong
- Moody’s: A1, Good
- Standard and Poor’s: A+, Strong
- Comdex Ranking: 90
These excellent financial ratings exemplify Principal’s commitment to stable, long term growth, providing peace of mind to all Principal life insurance policyholders.
Products Offered by Principal Financial Group
Principal Financial offers some excellent products and services including retirement related services, mutual funds, investment management, disability income insurance, annuities and life insurance.
Insurance for Individuals and Family, including
- Term life insurance
- Universal life insurance policies
- Indexed universal life insurance policies
- Variable universal life insurance policies
- Fixed Annuities
- Income Annuities
- Variable Annuities
Disability Income Insurance
For Employers and Employees
- Disability Insurance
- Non-Qualified Deferred Contribution Plans
- Life Insurance
- Dental Insurance
- Vision Insurance
- Critical Care Insurance
Life Insurance Policies offered by Principal Life Insurance Company
Principal Life offers both term life and permanent life insurance. The best life insurance coverage for you depends on your specific personal and business needs and goals. Each type of policy has its advantages. Take time to understand the differences, specifically term life vs permanent life.
Benefits of Term Life Insurance
- More Affordable Initial Premium
- Primary Income Earner Income Protection
- Mortgage Protection Specifically Tailored to Your Term
- Conversion Option to Switch to Permanent Coverage
Benefits of Permanent Life Insurance
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Executive Bonus (Section 162) Plans
- Non-Qualified Deferred Compensation Plans
- Split Dollar Life Insurance
- Infinite Banking
Life insurance policies offered through Principal Financial
Principal offers term life policies and various universal life insurance policies. Included under the category of universal life is indexed universal life and variable universal life.
Principal Life Insurance Company offers its convertible term life insurance for ages 20-80. You can choose from 10, 15, 20 and 30 year terms.
Principal Accelerated Underwriting for up to $1,000,000 of death benefit coverage is available for healthy applicants that qualify for the top two health rate classes, super preferred and preferred. The accelerated underwriting program does not require lab testing or medical exams. Normal turn around time for policies to be issued and placed in force is 10 days.
Principal Life offers cash value life insurance including Universal Life, Indexed Universal Life and Variable Universal Life.
Universal Life offers cash value growth, along with flexible premium payments and an adjustable death benefit.
Principal’s Universal Life Insurance Policies include:
- UL Accumulation II
- UL Flex II
- UL Protector IV
- UL Provider Edge
Indexed Universal Life
Indexed Universal Life (IUL) offers the same flexible premiums and death benefit as universal life. There is also a fixed account option that earns a guaranteed minimum interest. With IUL policies, you also have the option of earning interest crediting through an indexed account. With the indexed account, your money is not directly invested in the market, but rather the indexed account is credited interest based upon a formula that tracks the performance of underlying major indices, such as the S&P 500.
Principal’s Indexed Universal Life Insurance Policies include:
- Indexed UL Accumulation
- Indexed UL Flex II
- Index Advantage UL
- Survivorship UL Protector II
Indexed UL Accumulation
Principal’s Indexed UL Accumulation is available for age 18-85. It provides an optional rider for high early cash surrender values. You can choose three death benefit options, including a level death benefit, increasing death benefit, or return of premium death benefit. There is a 10 year no-lapse guarantee as long as minimum premium payments are made.
Variable Universal Life
Variable Life Insurance (VUL) provides the flexibility of Universal Life, but also the potential to increase your cash value by transferring your money into different sub-accounts directly into the underlying asset class, similar to mutual funds. Unlike universal life and indexed universal life, there is no guaranteed floor to protect your policy from loss. VUL policies require active management due to the inherent risk of investing in the market, including the potential to lose your money.
Principal’s Variable Universal Life Insurance Policies include:
- VUL Business
- VUL Income I
- VUL Income II
Additional Benefits of Cash Value Life Insurance
There are distinct benefits of cash value life insurance, which include:
Tax free life insurance policy loans
Borrowing against your cash value allow tax free access to the money in your policy. As the owner of the policy, you have a contractual right to borrow from the carrier, with your cash value acting as collateral. You can borrow from your policy whenever, and for whatever you choose. Any outstanding loan, plus interest, will reduce your death benefit if you die without having repaid the loan.
Tax deferred cash value growth
Under 7702 of the Internal Revenue Code, your cash value growth is tax deferred. You will not be taxed on any gains in your policy until you withdraw the gains or surrender the policy. You can withdraw from your policy income tax free up to your basis. You can avoid taxes all together by using policy loans, rather than withdrawals.
Tax free death benefit
Your death benefit on your life insurance is not taxed to your beneficiary. As long as your estate is under the federal exemption limit, or your own state inheritance tax level, no tax from your life insurance proceeds will be taxable. For larger estates, careful asset protection planning is necessary.
Principal Life Insurance Company’s Policy Riders
The following riders from Principal Financial are offered on select Principal Life Insurance Company policies.
Principal Financial Life Insurance Review Conclusion
Principal is a solid choice for anyone considering any of the companies insurance products. With strong financial ratings and superior product options, Principal is often our go to choice for indexed universal life insurance. However, there is no perfect company. The best life insurance company for you will be based on a combination of your needs, goals and objectives. Only by speaking wtih you and asking some questions can we safely make a recommendation on what company and policy will be in your best interest.
Do you have questions or would you like to see a Principal Life Insurance illustration or an illustration for any of the other companies we represent? Give us a call today for a free life insurance consultation with an advanced markets professional.