Principal Life Insurance Company Review

by Jeff Rose on April 25, 2012 · 2 comments

Principal Life Insurance Company Review

The Principal Financial Group – also referred to as just The Principal – is considered to be one of the country’s, and the world’s, leading financial services companies. It offers its financial and insurance products to both consumers and to businesses – including those that are used for wealth accumulation and retirement solutions.

Bringing affordable, reliable policies to over 18 million clients, Principal Life Insurance is one of the top life insurance companies, making a name by providing a service that helps consumers when they need it most.

As both a finance and insurance company you can trust that they know how to responsibly handle your money.

But beyond knowing how to handle money, an insurance company needs to bring good policies at affordable rates to all customers. You can request a quote from the company for how much does life insurance cost for you and your specific health at the time. Although, keep in mind it is best to obtain quotes from several companies, such as Americo Life Insurance Company, Banner Life Insurance Company or Fidelity Life, before you make your final decision.

Insurance Products Offered By The Principal Financial Group

The Principal offers a wide variety of insurance products to both consumers and businesses. These include life insurance, disability, vision and dental coverage. Regarding life insurance, there are many different options to choose from.

The types of life insurance that are offered by The Principal include:

Universal Life Insurance

Universal life insurance provides both death benefits protection, as well as a cash value component. This type of coverage is considered to be permanent coverage, as versus term. (With term life insurance, only a death benefit is offered, with no cash value or investment component).

Provided that the cash value is enough to cover the cost of the insurance protection, universal life insurance can be a very flexible way to obtain life insurance protection. This is because, within certain limitations, the insured is allowed to allocate when and how much of the premium goes towards the insurance portion of the policy and the cash value portion of the policy.

Also, the cash inside of the policy is allowed to grow on a tax deferred basis. This means that there is no tax due on the growth of the funds until the time of withdrawal. This can essentially allow the cash to grow and compound exponentially over time.

With universal life insurance, the accumulation of the cash value, then, can be used for paying the cost of insurance protection, and / or for policy riders, or even for other expenses that are associated with the policy.

Also, universal life insurance can also provide the policy holder with other types of secondary guarantees such as no-lapse protection. This can allow for the insured to “dial in” the coverage period from ten years to age 100.

There are several universal life insurance plans that are offered by The Principal. These include the following:

  • Indexed Universal Life Flex – In addition to a permanent death benefit, this policy also provides cash value build up. Offering many of the same benefits as a traditional UL (universal life) policy, this plan provides an enhancement in the way that interest is credited to the cash value component. Here, policy holders may choose whether to allocate their policy premiums to an index linked account, to a fixed account, or to both. The opportunity for upside potential can be gained via the index-linked option while at the same time the policy also provides downside market protection of the policy holder’s principal. All of the appreciation is tax-deferred, meaning that no tax is due until the time of withdrawal.
  • Universal Life Protector IV – If having security is a priority, then this may be a good option for certain policy holders. This particular plan offers the flexibility in selecting the length of the guaranteed death benefits coverage – up to lifetime coverage. It also offers the flexibility in selecting the level of premium that is paid into the contract, as well as the flexibility of decreasing or increasing the death benefit on the policy (subject to certain limitations). Also, this plan also comes with a lapse protection feature that can help in guaranteeing that the policy will not lapse for a certain number of years, or for the policy holder’s entire lifetime.
  • Universal Life Accumulation ll – With the Principal’s Universal Life Accumulation ll plan, the policy holder will have both permanent and flexible protection, along with cash value accumulation and tax-advantaged cash value build up. It also comes with flexibility concerning how and when the policy’s premium is paid.
  • Universal Life Flex ll – The Universal Life Flex ll policy also offers the ability to secure a permanent death benefit and cash value build up, along with the flexibility that comes with UL policies. Here, this plan is designed particularly for those who wish to have affordable death benefits protection with the potential for cash value appreciation.

Variable Universal Life Insurance

A variable universal life insurance policy brings even more benefits to clients than a UL Flex, but investors should truly think about what they want out of their policy. Do you want a life insurance policy, or would you rather focus on cash-value accumulation? With ultimate policy control, the policyholder is in complete control of their insurance and the Return of Cost of insurance (COI) returns all CIO charges either at the later of your age-60 policy or on your 15th policy year.

 

A variable universal life insurance policy will combine the flexibility of universal life insurance with the growth opportunity that is provided with market-related investment accounts. Therefore, these types of policies will place a focus on the accumulation of the underlying cash value.

Variable universal life insurance will also offer flexible death benefits options – which could essentially either underperform or outperform traditional whole life insurance, as well as even a regular universal life insurance policy.

There are several variable universal life insurance to choose from, including:

  • Variable Universal Life – Business – This variable universal life insurance plan is designed to provide death benefits protection, as well as to help business owners with protecting their companies, and to retain key employees. It also can help with implementing tax-advantaged retirement benefits for key employees as well. Some of the primary benefits of this plan include survivor benefits, tax-deferred growth of the cash value component, tax-free liquidity, and a great deal of flexibility and control over the policy by the policy holder.
  • Variable Universal Life Income lll – The VUL Income lll policy is a great way for policy holders to protect loved ones while at the same time working towards their retirement income goals. The tax deferred growth of the cash value component of the policy can help in supplementing retirement income in the future. And, the automated income distribution feature provides the policy holder with easy access to the accumulated value of the income from the policy. Other features include the ability to increase or decrease the death benefit as the insured’s needs change; the ability to change the amount and / or the timing of the premium payment; and the ability to choose which investment options may be able to help the policy holder to meet best his or her retirement income needs the best.
  • Variable Universal Life Income ll – This policy also provides tax-deferred growth of the cash value component, and allows the ability to build up a substantial retirement income source for the future. Like the VUL lll plan, this also offers numerous investment options to choose from.
  • Benefit Variable Universal Life ll – The Benefit Variable Universal Life ll plan is specifically designed to provide policy holders with the protection that they need, as well as to serve as a tax-deferred product that can enhance their future retirement income. Its automated income distribution feature produces an easy access to the accumulated value of the cash. And, the life paid up rider offers protection against potential lapse of the policy due to over-loan.

Survivorship Life Insurance

A survivorship life insurance policy will cover two individuals’ lives under one single policy. Here, the death benefit will pay out upon the death of the second individual. These types of policies are often used for estate planning purposes, as they can work in conjunction with the unlimited marital deduction. In doing so, the estate then will become taxable upon the death of the second spouse to die.

The Principal offers the Survivorship Universal Life Protector ll policy (Principal SUL Protector ll). This will insure the lives of two people, and it pays out the death benefit at the passing of the surviving insured person.

This plan helps with providing the liquidity that may be needed for paying high estate taxes that are due, as well as for keeping one’s business operational, transferring wealth to the next generation, and / or making a gift to a loved one or to a favorite charity.

The minimum amount of death benefit on the Survivorship Universal Life Protector ll policy is $250,000. This plan is known for having affordable premium payments. If also provides a lapse protection provision, as well as several choices of death benefits options.

Term Life Insurance

Term life insurance is the backbone of any company, a basic, short-term policy available for most potential clients.  The Principal offers basic term life insurance coverage as well. Here, death benefit only protection is offered for those who are seeking pure life insurance coverage. With term life insurance, protection is offered for a specific term, such as 10, 15, 20, or 30 years. Often, the policy is renewable – sometimes without having to prove evidence of insurability.

There are several term life products that are offered by The Principal. These include:

  • 10 Year Term – This product offers life insurance protection for ten years, allowing insureds to obtain affordable coverage. Beginning in the 11th year, the premiums will increase each year.
  • 15 Year Term – This product offers life insurance for a guaranteed level 15 year period at an affordable premium price. Beginning in the 16th year, the premium price will increase annually.
  • 20 Year Term – This product offers life insurance protection for 20 years at an affordable premium price and beginning in the 21st year, the premium will go up annually.
  • 30 Year Term – With the 30-year term life insurance product, insureds will get a life insurance product that is guaranteed level for 30 years. Beginning in the 31st year, the premiums will increase annually.
  • One Year Term – The Principal also offers a niche one-year term life insurance product for shorter term life insurance protection needs.

If your period of insurance expires, just reapply, with no need to present your health history or evidence of insurability, just so long as the death benefits do not change. With a solid base of term life insurance to build on, Principal Life Insurance is a great choice already, and has more services to add to their already impressive insurance policies.

How and Where to Obtain the Best Life Insurance Quotes

When seeking life insurance quotes on policies from The Principal Life Insurance Company – or those of any life insurer – it is typically best to work with a company or an agency that has access to more than just one insurance carrier. This is because you will be better able to obtain a non-biased comparison on life insurance policies, benefits, and premium quotes – and you can then, in turn, decide which one will be best for your specific needs.

If you are in the process of looking for life insurance quotes, we can help. We work with many of the best life insurance companies in the industry today, and we can assist you in getting the important details that you need for making an informed purchase decision. We can do this for you without you needing to meet in person with an insurance agent – and you can receive the information directly from your computer. To begin the process, all you need to do is use the form on this page.

Should you have any additional questions, please feel free to contact us directly. Our experts will be happy to walk you through any information that you need regarding life insurance quotes, features, and companies. We can be reached directly via phone, toll-free, by calling 888-836-7071. We understand that purchasing life insurance can be confusing at times. That’s why we’re here. So, contact us today – we’re here to help.

 

{ 2 comments… read them below or add one }

James Van Straten November 13, 2012 at 4:47 pm

I would like to know the annual payout on a one-life annuity, with all payments ceasing upon my death, if I were to purchase a $300,000 annuity at age eighty, with the first payment coming a year after purchase (at age 81).

I want to compare Principal’s payout to three other insurance companies.

Thank you,

James Van Straten

Reply

Jeff Rose November 15, 2012 at 7:45 pm

@ James If you provide some more info, we would be able to run quotes across several life insurance companies, not just Principal.

Reply

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