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Principal Financial Life Insurance Review
Principal primarily focuses on employer-sponsored (group) life insurance and voluntary/worksite benefits, with most U.S. individual retail life activity curtailed following a 2021 strategic review. Existing individual policies remain in force, but new offerings are now centered on workplace distribution. Historically, Principal offered standard term and permanent options; today, its standout strength is in group coverage and flexible enrollment designed for small and mid-sized employers.
If you hold an inforce permanent policy, you can generally borrow against the policys value or initiate a partial surrender, and these advances are typically tax-free. Principal deducts outstanding loans from the death benefit when you die or if you surrender the policy. If you choose a full surrender, you will pay income tax on any portion of the proceeds that exceeds your total premiums paid.
Your beneficiaries also have choices for receiving their death benefits. They can elect a lump-sum distribution, choose income options that provide payments over their remaining life, or keep the death benefit in an interest-bearing account they can access on demand.
Rider availability varies by policy type and state. Across the market, accidental death benefit and waiver of premium remain common options, and living benefit features have expanded since 2020 (for example, accelerated death benefits for terminal, chronic, or critical illness, and optional longterm care riders). In the workplace, Principal commonly pairs group life with AD&D and other valueadded services, allowing many customers to assemble robust coverage through employer plans.
The Life Insurance Factors We Analyzed
Customer experience
Principals customer experience is best viewed in the context of current industry benchmarks. J.D. Powers latest U.S. Individual Life Insurance Study highlights rising digital shopping and service expectations. Nationally, the American Customer Satisfaction Index reports life insurance customer satisfaction in the high 70s on a 000 scale, indicating generally solid consumer sentiment. The National Association of Insurance Commissioners (NAIC) publishes a linespecific Complaint Index in which 1.00 equals the market average; values below 1.00 indicate proportionally fewer verified complaints.
Online quoting is now common across the industry. Principal offers consumerfacing digital estimate tools in some lines and streamlined, adviserassisted paths to apply; most life insurance purchases still involve an adviser or employer enrollment, but the ability to compare options digitally makes shopping easier.
Financial strength
Principal Financial has long been regarded as financially strong by the major rating agencies. For the most current insurer financial strength ratings and outlooks, check Moodys, AM Best, and S&P Global for the specific operating entities that underwrite policies.
Strong financial strength is an important indicator that your life insurer can meet longterm obligations to policyholders.
Coverage and rider information
Principal sells the two major types of life insurance: term and permanent. Today the companys emphasis is on group life (employerpaid or voluntary). Historically, its individual portfolio included universal life insurance, indexed universal life insurance, variable universal life insurance, and survivorship insurance; following the 2021 strategy shift, availability of new retail individual life coverage is limited.
If youre looking for shortterm coverage, note that Principals legacy term life options were among the more flexible, with terms of one, 10, 15, 20, and 30 years and a conversion privilege to permanent coverage without a new medical exam. For new coverage needs, consult an adviser about current availability; workplace plans commonly provide simplified or guaranteedissue options during open enrollment.
Principals other standout option historically was survivorship insurance. This type of policy covers two lives and pays the death benefit upon the death of the second individual. It remains useful in estate planning, and interest has been rising ahead of the scheduled 2026 sunset of the temporarily expanded federal estate tax exemption, which could bring more estates into scope.
Principals strength is more pronounced under group and corporate policies, where plans often package life insurance with accidental death and dismemberment and other benefits. In the broader individual market, accidental death and waiverofpremium riders remain widely available, while living benefits (terminal, chronic, or critical illness accelerations and optional longterm care riders) have become more prominent since 2020.
Life insurance coverage features
Principal Financial Life Insurance Overview: Financial Strength, Availability, and History
Over its many years in business, Principal Financial has built an excellent reputation in the industry. It has a strong balance sheet, with significant assets to fund operations and protect policyholders.
The company has an A+ rating with the Better Business Bureau and performs competitively in independent satisfaction studies, with relatively low complaint levels indicated when a carriers NAIC Complaint Index falls below 1.00. Customers generally report positive experiences with Principals products and service.
- In business since: 1879
- S&P Global financial strength rating: Refer to S&P Global for the current insurer financial strength rating (IFSR)
- Moody’s financial strength rating: Refer to Moody’s for the current insurance financial strength rating
- AM Best financial strength rating: Refer to AM Best for the current financial strength rating (FSR)
- States served: 50
The Competition
All information accurate as of November 8, 2025.
The Bottom Line
Principal today is best known for employersponsored benefits, including group life; its U.S. individual retail life footprint has been significantly reduced since 2021. If you have access to Principal through your employer, youll likely find competitive, customizable options with convenient digital enrollment. For individual life needs outside the workplace, availability may be limited; compare quotes across carriers and focus on financial strength, rider features (including living benefits), and total value. Customerexperience benchmarks from J.D. Power and the NAIC, along with industrylevel ACSI scores, suggest generally solid satisfaction across the life segment.
Principal Financial Life Insurance FAQ
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