Principal Financial Group is a Fortune 500 company with over $700 billion in assets under management and some of the strongest financial ratings in the industry. They also no longer sell individual life insurance to retail consumers.
In June 2021, Principal announced it would fully exit the retail consumer life insurance market — discontinuing new sales of term life and universal life products to individual buyers. Existing policies remain in force and are fully serviced, but if you’re a consumer shopping for personal life insurance coverage, Principal isn’t an option.
Where Principal does remain active — and where they genuinely excel — is the business and executive market. Buy-sell agreements, key person insurance, corporate-owned life insurance (COLI), nonqualified deferred compensation, and executive bonus plans — these are Principal’s wheelhouse. Their IUL and VUL products are specifically designed for business owners, high earners, and corporate applications.
This review covers what Principal offers today, what changed in 2021 and why, who can still access their products, and when to look elsewhere.
TL;DR — Principal Financial Life Insurance
- Key change: Principal exited retail consumer life insurance sales in June 2021. They no longer sell term, UL, IUL, or VUL to individual retail buyers.
- Still active: Principal continues selling individual life insurance through the business market — buy-sell, key person, COLI, executive compensation, and split-dollar arrangements.
- Group life: Available through employers (group term up to $1M, voluntary term up to $500K).
- Financial strength: A.M. Best A+ (Superior), S&P A+, Fitch AA-, Moody’s A1.
- Best for: Business owners needing executive benefits, buy-sell funding, or corporate-owned life insurance. Not for individual consumers shopping for personal coverage.
- Bottom line: If you’re a business owner or high-income professional with a corporate planning need, Principal’s IUL and VUL products remain highly competitive. If you’re looking for personal whole life, term, or cash value coverage for individual wealth building, Principal has left that market.
Why Trust This Guide
Insurance & Estates is an independent agency with access to 40+ top-rated carriers, including Principal. We place Principal policies for business applications where they’re the right fit — and recommend other carriers for personal coverage needs. Our team includes licensed agents and an estate planning attorney with 18+ years of experience in advanced markets planning.
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About Principal Financial Group
Company Highlights
- Founded in 1879 as Bankers Life Association in Des Moines, Iowa
- Publicly traded (NASDAQ: PFG), member of S&P 500 since 2002
- Over $700 billion in assets under management
- Approximately 20,000 employees worldwide
- Named one of the World’s Most Ethical Companies (Ethisphere, multiple years)
- Exited retail consumer life insurance in 2021; remains active in business/executive market
- Insurance products issued by Principal Life Insurance Company and Principal National Life Insurance Company
Principal Financial Group has been in business for over 145 years. Founded as Bankers Life Association by Edward Temple and other Des Moines bankers, the company rebranded to Principal Financial Group in 1985 and grew into a global financial services powerhouse spanning life insurance, asset management, retirement solutions, and disability income.
In 2019, Principal acquired Wells Fargo’s institutional retirement and trust business for $1.2 billion, strengthening its position as one of the leading retirement plan providers in the country. By 2021, under pressure from activist investor Elliott Investment Management, Principal announced a strategic review that fundamentally reshaped its insurance business.
2021: Why Principal Left the Retail Market
Strategic Shift — June 2021
In June 2021, Principal announced it would fully exit U.S. retail consumer life insurance and retail fixed annuities. The company discontinued new sales of term life and universal life products to individual retail consumers and pursued strategic alternatives — including divestiture — for approximately $25 billion in related in-force reserves.
The decision came after a comprehensive strategic review initiated in February 2021, triggered in part by Elliott Investment Management taking a significant stake in the company and pushing for changes. The review, led by Principal’s independent Finance Committee, concluded that the company’s capital was better deployed elsewhere — specifically in retirement services, asset management, and business-market insurance products where Principal held competitive advantages.
What this means in practice: if you’re an individual consumer looking for personal term life, universal life, or any retail life insurance product, Principal no longer sells to you. Your options with Principal are limited to group coverage through an employer or individual policies purchased through a business context.
Existing policyholders were unaffected. All in-force policies continue to be serviced by Principal, and policy terms remain unchanged. In February 2022, Principal sold approximately $21 billion in retail fixed annuity and commercial life insurance reserves to Talcott Resolution (a division of Sixth Street Partners), though Principal continues to provide customer service for those products.
Financial Ratings & Strength
Principal’s financial foundation remains exceptionally strong — among the highest-rated in the industry.
| Rating Agency | Rating | Category |
|---|---|---|
| A.M. Best | A+ (Superior) | 2nd highest of 16 |
| Standard & Poor’s | A+ (Strong) | 5th highest of 22 |
| Fitch | AA- (Very Strong) | 4th highest of 21 |
| Moody’s | A1 (Good) | 5th highest of 21 |
| NAIC Complaint Index | 0.26 | 74% fewer complaints than expected |
The NAIC complaint index of 0.26 is exceptional — Principal receives roughly 74% fewer complaints than expected for a company of its size. Whatever your view on their product decisions, their financial stability and claims-paying ability are not in question.
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What Principal Offers Today
Principal’s current product lineup reflects its post-2021 strategy: business-focused life insurance, group/employer benefits, disability income, annuities, and retirement services.
Group Life Insurance (Through Employers)
Principal remains a leading provider of group benefits for small and mid-sized businesses. Available group life products include employer-paid group term life (up to $1 million) with optional dependent coverage for spouses and children under 26, voluntary term life through payroll deduction (up to $500,000) with portability and conversion options, and accidental death and dismemberment (AD&D) coverage bundled with group life plans.
If your employer offers Principal group coverage, it’s generally a solid benefit worth taking advantage of — though it shouldn’t replace an individually owned policy for comprehensive protection.
Individual Disability Income Insurance
Principal continues to offer individual long-term disability insurance directly to consumers — one of the few individual products they still sell outside the business market. Their disability products are well-regarded in the industry.
Annuities
Principal still offers variable annuities as part of its retirement solutions suite. Fixed annuity sales were discontinued alongside the retail life exit in 2021.
Business & Executive Life Insurance Products
This is where Principal remains genuinely competitive and worth considering. While they exited the retail consumer market, they continue to actively sell individual life insurance policies for business-owned and business-sponsored applications.
Term Life Insurance
Principal’s convertible term life is available for ages 20-80 with 10, 15, 20, and 30-year terms. For clients age 65+, the minimum face amount is $1 million (with exceptions for specific business cases like buy-sell arrangements). Principal’s accelerated underwriting program allows no-exam coverage up to $3-5 million for qualifying applicants in the top two health classes.
Indexed Universal Life (IUL)
Indexed universal life is where Principal has historically been one of our go-to carriers for business applications. Their current IUL lineup includes:
IUL Accumulation II: Designed for long-term growth and income distribution, targeting ages 35-55. Features S&P 500 index accounts (including a Total Return index option that sets Principal apart from many competitors), optional high early cash surrender value rider, three death benefit options, and a 10-year no-lapse guarantee. Available in all states except New York.
IUL Flex II: Flexible coverage with moderate cash value potential for ages 35-65. Positioned for budget-conscious buyers who want index-linked growth without the direct market risk of variable products.
Both IUL products include downside protection — your cash value won’t lose money when the market drops, though caps limit upside in strong market years.
Variable Universal Life (VUL)
VUL Income IV: Market-based cash value growth with over 70 investment options, dollar-cost averaging accounts, and a death benefit guarantee to age 65. Targets high-income earners ages 35-55 with moderate-to-high risk tolerance.
Executive VUL III: Specifically designed for corporate-owned life insurance (COLI) and business-sponsored applications. Features over 100 investment options, death benefit guarantee to age 85, and pricing optimized for nonqualified deferred compensation plan funding. Repriced effective March 2, 2026, for all states except New York.
Survivorship Universal Life
Survivorship coverage is available for estate planning applications, covering two lives and paying the death benefit upon the second death. Principal’s survivorship products can issue coverage even when one of the two insureds is otherwise uninsurable — a significant advantage for estate planning situations.
Common Business Applications for Principal Life Insurance
- Buy-Sell Agreements: Funding partnership or shareholder agreements with life insurance proceeds
- Key Person Insurance: Protecting the business against loss of essential employees
- Corporate-Owned Life Insurance (COLI): Informally financing deferred compensation obligations
- Executive Bonus (Section 162) Plans: Tax-advantaged compensation for key executives
- Split-Dollar Arrangements: Shared premium structures between employer and employee
- Nonqualified Deferred Compensation: Supplemental retirement benefits funded through life insurance
Available Riders
Principal offers a focused but practical rider selection on eligible policies:
Terminal Illness Death Benefit Advance Rider: Accelerates a portion of the death benefit upon terminal diagnosis. Available at no additional cost.
Chronic Illness Death Benefit Advance Rider: Advances death benefit for qualifying chronic illness — a meaningful addition that not all carriers include.
Waiver of Monthly Policy Charge Rider: Waives policy charges during permanent disability.
Children’s Term Insurance Rider: Coverage for the insured’s children ages 14 days to 18 years, with a maximum duration to age 25. $5,000-$25,000 coverage per child, one set premium regardless of number of children.
Who Principal Is For (And Who Should Look Elsewhere)
Principal May Be Right If You:
- Need life insurance for a business application — buy-sell, key person, COLI, or executive compensation
- Are a high-income earner or business owner seeking IUL or VUL with competitive index options
- Want accelerated underwriting on permanent coverage up to $3-5 million without a medical exam
- Need survivorship coverage for estate planning — especially with one uninsurable spouse
- Have access to Principal through your employer’s group benefits
- Need individual disability income insurance
Look Elsewhere If You:
- Are an individual consumer shopping for personal term life, universal life, or whole life coverage
- Want dividend-paying whole life insurance — Principal doesn’t offer whole life at all
- Are considering infinite banking, Volume-Based Banking, or any participating whole life strategy
- Need individual coverage that doesn’t tie to a business entity
- Prefer a mutual company structure — Principal is a publicly traded stock company (NASDAQ: PFG)
For individual whole life and cash value strategies, consider mutual companies like MassMutual, New York Life, Guardian, or Penn Mutual. For competitive individual term rates, see our guide to the best life insurance companies. For IUL comparisons, see our IUL overview.
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Frequently Asked Questions
Does Principal still sell life insurance to individuals?
Not to retail consumers. In June 2021, Principal fully exited the U.S. retail consumer life insurance market. They discontinued new sales of term and universal life products to individual retail buyers. However, Principal continues to sell individual life insurance policies for business applications — buy-sell agreements, key person insurance, corporate-owned life insurance, executive bonus plans, and nonqualified deferred compensation. Group life insurance is also available through employers.
What happened to existing Principal life insurance policies?
All in-force policies continue to be serviced by Principal. Policy terms, coverage amounts, premiums, and guarantees remain unchanged. In 2022, Principal sold approximately $21 billion in retail fixed annuity and commercial life insurance reserves to Talcott Resolution, though Principal continues to provide customer service. If you hold an existing Principal policy, contact them at 800-986-3343.
Why did Principal exit the retail life insurance market?
The exit resulted from a strategic review initiated in February 2021, driven in part by activist investor Elliott Investment Management taking a stake in the company. The review concluded that Principal’s capital was better deployed in retirement services, asset management, and business-market insurance — areas where they held stronger competitive advantages and could generate better returns for shareholders.
Is Principal good for business life insurance?
Yes. Principal’s IUL and VUL products remain highly competitive for business applications. Their IUL Accumulation II offers a unique S&P 500 Total Return index option, and the Executive VUL III is specifically designed for COLI and deferred compensation plan funding. Their accelerated underwriting program offers no-exam coverage up to $3-5 million for qualifying applicants — one of the higher thresholds in the industry for no-exam life insurance.
Does Principal offer whole life insurance?
No. Principal has never been a whole life carrier. Their permanent life products are all forms of universal life — UL, IUL, and VUL. If you’re looking for dividend-paying whole life from a mutual company, Principal is not an option.
Can I use Principal life insurance for infinite banking?
No. Infinite banking and Volume-Based Banking strategies require participating whole life insurance from mutual companies with paid-up addition riders and favorable loan recognition features. Principal’s products are all non-participating universal life variants owned by a stock company — structurally incompatible with IBC methodology.
How does Principal’s IUL compare to other carriers?
Principal’s IUL Accumulation II is competitive in the business market, particularly for its S&P 500 Total Return index option and accelerated underwriting at high face amounts. However, for individual consumer IUL needs (which Principal no longer serves in the retail market), carriers like National Life Group, Pacific Life, or Lincoln Financial offer comparable products with broader distribution. IUL products generally should be evaluated through detailed policy illustrations rather than product spec comparisons alone.
Is Principal a mutual company?
No. Principal Financial Group is a publicly traded stock company (NASDAQ: PFG). This means the company answers to shareholders, not policyholders. If mutual company structure matters to your planning strategy — and we believe it should for whole life and cash value applications — Principal does not fit.
Principal Financial Life Insurance Review — Conclusion
Principal Financial is a financially strong, well-managed company with a clear identity: business-market life insurance and retirement services. Their decision to exit retail consumer life insurance in 2021 was a shareholder-driven move that narrowed their focus but didn’t diminish their capabilities in the areas where they remain active.
For business owners and high-income professionals who need buy-sell funding, key person coverage, corporate-owned life insurance, or executive compensation planning, Principal’s IUL and VUL products offer competitive features, strong underwriting, and the kind of financial stability that matters when you’re planning decades ahead.
For everyone else — individual consumers shopping for whole life, personal term coverage, or any strategy built around cash value accumulation and dividends — Principal isn’t in that business anymore, and frankly, as a stock company, they were never the ideal fit for those applications in the first place.
Our Position on Principal Financial
We use Principal for business life insurance applications where their IUL and VUL products are legitimately among the best in the market. For personal life insurance — especially whole life, infinite banking, and wealth-building strategies — we recommend mutual companies where policyholder interests are structurally aligned with the carrier’s incentives. If you need help determining which approach fits your situation, reach out to our team.
— Insurance & Estates
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4 comments
Cindy Brewington
I need this place to call me or email me please.
Steven Gibbs
Hi Cindy, unfortunately, we do not have the ability to have someone at Principal connect with you since we are a private company with no affiliation. We write articles about various companies and sometimes folks are confused by this. You’ll need to go back and make sure you’re on the company website and connect that way. Best, Steve Gibbs for I&E
Samuel M Roberts
I’m having problem to view my deduction, therefore, I’m requesting that you please to reset my password.
Insurance&Estates
Hello Samuel, it looks like you may be trying to reach Principal and sometimes folks get confused and think that we’re them due to our articles. You’ll need to make sure you’re inquiring on their website.
Best,
I&E