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Principal Financial Group Review

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UPDATED: Nov 30, 2018

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Principal Financial Group
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A Fortune 500 company, Principal Financial Group is a global insurance and financial services provider with a history in the U.S. going back nearly 140 years. The write individual and group life insurance, disability, and dental insurance, as well as providing retirement solutions that include IRAs and estate planning.

About Principal Life Insurance Company

The history of Principal goes back to the founding of Bankers Life Association in 1879 in Iowa. The company initially offered life insurance policies on a membership basis to men between the ages of 22 and 55 who were low risk – in good health and not in a high-risk occupation. This approach served them well, as growth in the first decade hit $29 million in life insurance policies and necessitated a move to a larger building in Des Moines, Iowa.

In 1909 the company reorganized to form a mutual insurance company, another successful move that brought the company safely through the Depression. Growth again led to the need for a new headquarters, and the current headquarters was built in Des Moines in 1939.

In 1941 Bankers began writing group health insurance, which became a large portion of their sales in the following years. In 1985 the company started using the name Principal Financial Group; this was followed by global expansion into new markets. An underlying company and the biggest part of the new financial group, Bankers Life become Principal Mutual Life Insurance Company around the same time. In 2001 Principal left behind its mutual association roots and became a publicly traded corporation.

Today Principal employs around 9,000 people in Des Moines alone, owns several buildings in the downtown area and has naming rights to several city landmarks. They also sponsor a PGA golf tournament, the Principal Charity Classic. Principal ranked at number 210 on the Fortune 500 in 2018.

Principal products are offered to individuals as well as to groups through employer benefit plans. The list of employee benefits is much longer than what’s offered to individuals directly, and its likely Principal brings in much more business that way. Individual products are heavily weighted towards retirement planning.

While the company headquarters remain in Des Moines, Principal offers its products across the U.S. and in a total of 18 countries around the world.

Principal Products

Principal’s products are divided into individual and group categories. Group benefits are designed to be offered as voluntary employee benefits and are only available through employers that choose to provide those benefits. Individual products are available to the general public, but they are more limited in selection. First, we will take a look at the individual product options, then take a look at what you might be offered as group benefits.

Individual Products

There are a handful of insurance products in the individual category and many investment and retirement planning options.

Life Insurance

Principal’s life insurance policies are offered either as term life insurance or permanent universal life insurance. As of the time of this review, whole life insurance is not available.

Term life is offered in 10, 15, 20, or 30-year term lengths, and all of the policies are convertible to a permanent policy. There is also a one-year term renewable policy available.

The website does not give minimum or maximum death benefit amounts, and in fact, there is little detail at all on the term life products. It was not until we went into the quoting section that we were able to glean a little more information. The death benefit field allows entries of amounts between $200,000 and $50,000,000 for term life. That is an extremely high maximum amount of insurance. We will take a closer look at the quoting system in our section on rates.

Principal has three options for permanent life: Universal, Variable Universal, and Survivorship.

Again, details on these policies are limited to a brief description of each. There are not any issue age limits, death benefit amounts, or other details found on the site. As before, we went into the quoting system where the same upper and lower limits for death benefits were presented as those we saw on the term policy.

Visitors to the site are, instead of being provided with easy to access details, referred to a financial advisor for a complimentary consultation.

Annuities

Principal Life’s annuity options are more diverse than their life insurance selections, with a choice to meet the needs of every investor from immediate needs to long-term planning.

While there are more options, there is not much more detail offered on the annuities than there is for the life insurance plans. Basic overviews of the functions of each and the needs they serve are provided.

Principal’s annuities are:

Fixed Annuities, which offer a guaranteed return of premium and guaranteed interest rates. These also offer tax advantages, flexible access, and emergency access to funds.

Single Premium Deferred Annuities, with a lump sum contribution that will provide income later in life. These are available with a variety of options including different guarantee periods and other features.

Income Annuities, including Immediate to provide income within 12 months while continuing to grow the original investment, and Deferred to provide income later in life. These annuities also have a variety of options to choose from, including:

  • Fixed period or fixed amount payouts
  • Refund terms for remaining balance
  • Joint and Survivorship options
  • Monthly, quarterly, or annual payment choices
  • Inflation protection
  • Liquidity Rider

Indexed annuities, which link your investment to a particular index offering a competitive interest rate for a low-risk investment that still offers growth. These have a guaranteed lifetime income and a guaranteed death benefit as well.

Variable Annuities, which offer more opportunity for growth by using varying investments and rates of return based on market performance. These also have a guaranteed lifetime income and have the option of both a living benefit rider and a deferred income rider.

Retirement Savings

Principal offers retirement savings plans both for individuals and through employers. They manage both 401(k) and 403(b) plans and can also assist with rollovers into an IRA or a new 401(k) plan.

Principal offers both traditional and Roth IRA options, and retirement funds can be rolled over into either one.

Additionally, Principal assists with investments in mutual funds and setting up of personal trusts for a comprehensive approach to savings and investment.

Disability Income Protection

Principal’s disability insurance program is offered to individuals to provide income when a disability renders the insured unable to work. Customized coverage options are available to adjust the plan to meet your needs.

There is a Retirement Savings Protection rider also available. This rider can be added to the disability plan to continue contributions to retirement savings even when you are unable to work.

Group Products

Employee benefits programs through Principal include retirement savings and insurance benefits. These are voluntary benefits that allow the employee to take advantage of the benefits of a group plan, such as lower rates while obtaining the coverage they want.

Group Insurance

Principal has a list of group insurance options that employers can select to offer to their employees.

Group Disability is available with long-term and short-term options. Benefit options are flexible, with short-term ranging from 40 – 66 2/3% and long-term ranging from 40 – 60%. The long-term disability plan can be integrated with individual coverage for additional benefits. These plans also allow part-time work while receiving benefits and cover for both partial and full disability.

Group Life plans are also flexible, with the option of both employer-paid and employee-paid policies. Either plan offers a range of options including:

  • Guaranteed issue
  • Spouse/dependent coverage
  • Terminal illness rider
  • Waiver of premium options
  • Accidental Death and Dismemberment (AD&D)
  • Express claims processing for amounts under $50,000

Employer-paid plans can be a flat amount or multiples of salary, with a maximum of $1 million. Employee-paid plans offer coverage up to $500,000. There are options for both plans to be portable in the event of a job change, and the two can be combined.

Dental & Vision Insurance can be offered either separately or together. Benefits include both in and out of network coverage and fully covered preventative care. The dental plan allows a selection of deductibles and co-payment amounts for flexibility.

When combined, the dental and vision plans offered integrated administration and service.

Critical Illness and Accident Insurance are both offered to provide financial protection in the event of a serious illness or an accident. These pay out benefits that can be used for any purpose and combined with disability benefits.

Group Retirement Plans

Principal works with employers to administer a variety of investment and retirement plan options for employees. These include:

  • 401(k) and 403(b)
  • Employee stock ownership plans
  • Nonqualified deferred compensation plans
  • Pension plans

Rates

Principal offers a quick quote option for individual life insurance on their website, including both term and permanent coverage.

The quoting system asks the usual questions about age and tobacco use, but also requests height and weight; this is unusual. While height and weight are often used as indicators for rating, it is rare to see them in a quoting system online. It is likely that a BMI is determined and used as part of the rate quote.

Since we do not normally enter those values in our quotes, it may affect how the rates we returned compare to other companies. We quoted a 30-year-old male in California, non-tobacco, 6’ tall and 200 lbs.

The term rates returned for a base policy amount of $200,000 (the lowest offered) were $10/month for a 10-year term, $13 for a 20-year, and $18 for a 30-year.

We then boosted the coverage to $1 million. The ten-year term returned a rate of $22. A 20-year term had a rate of $36 a month, and a 30-year term came in at $63.

Finally, we quoted permanent life insurance at both $200,000 and at $1 million. The rate for $200,000 in coverage came to $94 a month, while the $1 million in coverage came to $425 a month.

Overall, most of these rates are well within the bounds of what we have seen at other companies for similar policies. The term rates, in particular, are very reasonable – we usually quote a $100,000 policy (not offered here) and see similar rates, which makes these plans a good value.

Claims

We found the claims information on the Principal site to be difficult to locate. The website does not offer a dedicated claims page nor does it provide a link off the main page to find this information quickly.

Claims information is buried in the help section of the website, where there is a brief Q&A. This section provides a claims phone number for life insurance at 800-331-2213. There is not another option offered for assistance with a life insurance claim.

A different phone number, 800-422-3788 is provided for disability claims. This line is only available during business hours and an email option is also provided for disability claim assistance.

Another perusal through the help section led us to the forms download area, where both life and disability insurance claim forms can be downloaded, along with several other forms.

While all of the basic information for getting a claim submitted is present, it is not easy to locate and very minimal.

The Principal Website

Overall, we found the Principal website easy to navigate. It offers a lot of basic information, including overviews of different products and advice articles on investments and insurance. The site has a clean look and is less bloated with unnecessary information than some other financial websites we have seen. We would like to see more detail on the products themselves and less general information, however, a problem that is not uncommon.

The online quoting system is easy to use, and the height and weight entries may help return more accurate quotes and avoid surprises later. The system allows you to either enter the amount of coverage you want or do a calculation of your life insurance needs. It works smoothly and provides helpful results.

As we have already noted, the main issue we would like to see improved with this company’s online service is the access to claims information. A main claims tab that takes visitors directly to the information they need is something we want to see from every insurance company.

Ratings and Consumer Reviews

Principal Financial Group has an A+ rating with the Better Business Bureau (BBB), where they have been accredited since 1948. There are 83 complaints on file in the past three years, with 28 of those closed in the past 12 months. This is a small number for a company as large as Principal.

Yelp has 27 reviews of Principal with an overall one-star rating. The complaints all cite a poor customer service experience, with difficulty obtaining clear answers. There are also several complaints about difficulty with dental insurance claims being denied.

While it is always a little concerning to see the same complaints repeated for one company, the overall number of complaints is again very low. We found very few customer complaints about this company in general with none listed on the more common insurance review sites. This may be in part due to their heavy involvement in group policies, where many policyholders may have turned to the HR department to resolve an issue rather than posting a review or complaint online.

The Bottom Line

Principal Financial Group is a large company that relies on group insurance policies for a lot of their business. They have reasonable rates for their life insurance policies, particularly term life and even at high benefit amounts, which is likely to appeal to those who need a large amount of coverage.

We found nothing of major concern in the reviews of this company, although it does appear that some policyholders struggle with getting assistance from customer service, particularly for group benefits. Overall, though, Principal has a solid reputation and a solid financial footing.

For a list of companies that we recommend, visit our Best Insurance Companies page.

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Review Information

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Principal Financial Group
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About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

20 Comments

  1. Principal has been one of the best Financial Companies I have dealt with. My 401k is always on point and trends very well with market fluctuations. Had to take out a loan from 401k a couple of times throughout the years, each time never a direct deposit delay, in fact, monies have routinely posted prior to the expected grace period. It is unfortunate some of the bad experiences it appears some have had, as for myself I can only speak honestly about my experience with Principal and will highly recommend them to anyone that is seeking a solid and great Financial Company. Normally I don’t post comments but your review is spot on and I felt compelled to at least let others know that despite the negative comments there are far more positive experiences if others like myself would take the time to post.

    Reply
    • Zero Stars should be an option for ratings!

      Principal Financial is a scam artist company.

      They have my mutual funds and insist on “rebalancing” my investments even though they do not have my permission to do so and NEVER had my permission to invest my funds across so many mutual funds nor my permission to rebalance those investments.

      Their rebalancing scheme is a scam to charge fees for selling profits in the funds that make money and then charge fees to invest those profits in funds that they need to “prop-up”.

      Then, when I call their customer support line to tell them to stop this poor investment practice, they use excuses and poorly worded legal statements to not do what I as the owner of those funds have directed them to do.

      Principal Financial is NOT a good investment firm and has HORRIBLE customer service.

      Their Iowa Operators on their customer support line are snowflakes and so focused on being treated politely that they are not capable of dealing with the frustration that they have created in us as the fund owner(s).

      Reply
  2. Absolutely Horrible experience!
    Filed an STD claim after I was in an accident. While under my doctors care, I have to jump through hoops to provide all the documents they asked for. During the process of providing emergency room records, they closed the claim. The didn’t even have the courtesy and professionalism to call me to give me the status of the claim. I’ve read other reviews on Principle and I can tell you, I now have first-hand experience with these people. It’s setup not to pay on STD. Horrible, horrible experience!!!

    Reply
  3. Here is a link through the Bloomberg Group, you will find the names of the CEO and board members about half way down, scroll down till you see them, consider contacting them ( respectfully!!) At:
    https://www.bloomberg.com/quote/PFG:US

    Reply
  4. All of the above complaints should be itemized by date, time phone numbers called, addresses claims were mailed to, and sent to your Attorney General in the State where you reside. Also, send copies to the Insurance Commission in the State in which you reside.
    These are the best ways to build a figurative fire underneath poor performing insurance firms, bury them in paper, demand accountability, and find their CEO ONLINE, AND mail via certified mail your complaints and claim forms, call them at home ( be respectful) during daylight hours, again BE RESPECTFUL.
    Eventually, they have to pay attention to you. If all else fails, file in small claims court, and get a collectible summary judgment.

    Reply
  5. This company is horrible….They never return your numerous telephone calls, poor customer service!! It takes 2 weeks to receive correspondence from them when they are needing more information from your employer on a new claim filed. They never give you a straight answer!!

    Reply
  6. This company is a joke and their customer service from the disability adjusters is horrible. I have this insurance thru my employer for STD, and I was off work from Oct 2, 2017 thru October 15, 2017. I have yet to receive anything from Principal Disability. I had tried numerous times to get in touch with my adjuster, [Redacted] and to no avail. She had some personal issues for a couple of weeks and did not work. You would think her supervisor would have reassigned my case or finished it up for her. Every time I would call Principal to see the status for my claim, they would tell me that she would need to talk to me about my case and to just leave a voicemail that she never responded to. I received a letter on 12-01-17 saying they denied my claim because I had insufficient proof of an actual disability. The letter was dated 11-17-17. (Since when did it start taking two weeks for mail to arrive???) I went to my doctor several times between my initial phone interview with Principal on 10-09-17. If this person would have responded to my voicemail or at least had someone else to ACT concerned with me, this denial letter could have been avoided, and I could have gotten my claim. This was the worst insurance experience I have ever had. There were no apologies from [Redacted] when she finally did call me back to let me know why the claim was denied. I just wonder if they ever take into consideration that I was off work because I was ill and did not get paid by employer since it was supposed to come from them. Also, the main consideration was that I was ill and could not work per my doctor.

    Reply
  7. This is absolutely the worst company ever! There customer service is horrible. I have a STD claim for injuries to my left shoulder due to a head on collision with a drunk driver. They denied my first claim stating there wasn’t enough evidence as to why I was unable to work. This is according to their consultant. I had to ask my doctor to return me to work at least part-time due to financial issues. I sent in a second claim to cover the hours I am unable to work and all I am getting now is a run around. They have the information that I need surgery to correct my shoulder injury but still they are not responding. [Redacted] and [Redacted] should NOT be speaking with anyone as their customer service is terrible. They tell you that they will call you back and then days later I am having to call them back and can NEVER reach them always a voice mail to leave a message for which they don’t call you back. If you request to speak with someone else I have to go through the same information over and over again. I have had to request that the Dr. put me back to full duty even with my injury due to the financial issues they are causing and this is causing me MUCH pain. I would NEVER recommend this company to anyone and if your employer has this company has your STD or LTD insurance I would definitely look elsewhere! This company prides itself on NOT paying benefits that are due based on some “nurse” that doesn’t have a clue what she is talking about but thinks that she knows what you can and can’t handle based on your job description. Wake up people until you have walked in the shoes of those with the injury, you can’t possibly know what they can and can’t do. If you are needing to deal with this company for anything you might as well forget it, you won’t get what you are entitled to! TERRIBLE, TERRIBLE COMPANY!

    Reply
  8. Worst company I’ve ever dealt with. No one is on the same page. Waited for money to be rolled over from one company to this one for 2 months before it actually showed in the account. After many calls to this company they told me 5 different dates for the money to be in the account. Decided to take the money out due to bad feelings from this company and couldn’t see the money in the account to do so. Took me calling and asking to be emailed forms to take the money out and now being told it could take up to 2 weeks to actually see the money. The money has just been sitting there and I still cannot see it in the account. Makes me wonder what they would have done with it had I not been calling every other day.

    Reply
  9. I just received a letter from them saying I have no appeals left on my disability claim,It got to a point that I didn’t even have the money to see a doctor because they wouldn’t give me my ltd and that’s why they denied me because I didn’t have enough documentation from a doctor,what a croc I could have seen a doctor if they would have gave me my ltd.really a horrible company to deal with

    Reply
  10. I agree this is the worst company I have ever seen,they have done everything to deny my benefits. I just can’t say enough bad things about them. I’m losing everything because the won’t give me my LTD that I paid for for so long, what a ripoff. They could at least give me back the money I paid them for this policy,watch these people they will screw u over.

    Reply
  11. This is the worse company to deal with regarding claiming the benefits of a deceased beloved one. My brother passed away 3 months ago. He had no immediate beneficiary such as a wife or kids. I am the only one left as a claimant as a beneficiary. I have been getting bounced back and forth like a ping pong ball from the ex-employer and Principal. Principal refuses to provide information such as what is missing in order to complete the process. The ex-employer states they have provided all required information. Principal refuses to provide a fax number, address or an email for me to provide my brother’s Death Certificate if that is what is missing. Principal has no compassion to those that have to deal with the closing of a beloved business matters. It seems that Principal does NOT want to pay out my brother’s 401K plan. They want to hold it like if they earned it. The workers seem cold hearted…….do NOT care about anyone. I have to relive my brother’s death every time I have to deal with Principal. This company should be out of business.
    John Hancock insurance did not give me any hassle like this. They actually guided me to what needed to be done in order to claim his benefits. This company should learn to communicate better between everyone who is trying to do business with them.

    Reply
  12. A. Alvarado
    My company unfortunately uses Principal Financial as well and I couldn’t agree more.
    I filed a claim for STD in January and it is now February 14, still no update or payment of any kind.
    The entire group seems to be employed by heartless, un-empathatic beings who specialize in finding solutions to NOT pay out on claims and argue against all types of evidence & proof that is supplied.
    In a time of need and crisis is when people should be able to count on the insurance company benefits that you have been paying towards—but not principal financial. Yoi can count on them not following through and making your life a living hell!

    Reply
    • I had exactly the same experience. They gave me the run around for a month and then decided to tell me the claim was denied. I was treated like a criminal. Had I know they were so slimy I would have embellished all of my symptoms and lied. The insurance useless since they do not allow you to use it. They are awful people!!!!

      Reply
  13. Principal Insurance is the absolute worst company to deal with. God forbid you actually need to file a claim. They force you into hiring a lawyer to collect on a disability claim. Most people filing for disability are already going through the worst time of their life. Then they have to fight to collect on their benefits. This company has zero compassion for people. They are right up there on the “axis of evil” scale. It wouldn’t surprise me to find out they are a terrorist backed company.

    Reply
  14. This place is a joke!!! Any employer with any care for their employees welfare and family should not use this company! They are tyrants and could care less about anyone!! This is the type of company that should not be allowed to do business in America. I am about to lose my house and other things because of the lack of competence and care that they continue to show. I’m currently looking for new employment because my company seems to endorse them and their lack of benefits provided. I believe with all my heart that this is the type of company who has their day coming at judgment and it will not be pretty!

    Reply
    • Could not agree more! They are a horrible evil company!!!

      Reply
  15. What a scam. I receive a life insurance policy every quarter that my ex husband, who divorced me to marry the babysitter, carries on me. He has paid more than $6,000 to the company and he has basically stripped me of all rights except my soul. He has left me penniless.. Principal will not give me a dime on the policy for cancelling. They say it has no value. Is that possible and shouldn’t it be illegal for someone who seems to want you dead and gone to carry a life insurance policy on someone they won’t even acknowledge as being alive? And has alienated my two small children from me as well? I’ve been heartbroken for five years now. He has not allowed me to see my children in almost two years Principal Life is greedy to say the least and cold.

    Reply
  16. We “had” Principal for Dental through my husband employer. Absolutely the greediest insurance. I had a proven cracked tooth (right down the middle) and need not only a crown but later a root canal as the tooth was cracked down the middle. My insurance covered the 50% and Principal refused to cover their portion because there wasn’t enough evidence. So after the appeals and several amazing pictures to show the cracked tooth they still said they wouldn’t cover because there wasn’t enough deterioration of the tooth. I might add it was incredibly painful. I called and they had a very unprofessional administrative person tell me the pictures were terrible and wouldn’t give me the name to the person whom decided my tooth wasn’t bad enough. Our bill was 1200 and my insurance covered 500. They refused and then relinquished $24. I’m so unsatisfied and irritated. They are horrible and I would never choose them again for any insurance at all.
    Sarah Stevens

    Reply
    • We have had the same issue with disability insurance through this company. They are the worst company to use. We have paid for services through employer for over 15 years and when a claim was filed they took about 46 days to send the first check and we never knew if another one was coming after that. Another incident arose and now they are refusing to pay saying there isn’t a diagnosis for the injury so they have denied the claim. They approved one week stating that should be long enough to be out of work based on thier opinion. Absolutely a rip off!! You have to argue and fight with them just to get anything done or a cent they owe you. No one should use this company for any insurance or income needs.

      Reply

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