Principal Financial Group: Life Insurance for Employers

Christian Worstell
In this article...
  • Principal Financial Group offers innovative financial products to individuals and groups. Learn more about Principal life insurance and long-term savings plans.

Principal Financial Group is one of the nation’s leading providers of employer benefits, including life insurance policies. The company also offers innovative financial solutions for individuals who want help planning for retirement and other savings goals.

About Principal Financial Group

In 1879, Principal Financial Group opened for business strictly as an insurance company. Today, its offerings include long-term savings solutions for individuals and companies globally, and the company is a leading provider of benefits for small- and medium-sized businesses in the United States. The organization has a diverse leadership team and promotes ethical business practices, creating a stable climate for investing.

What Life Insurance Products Does Principal Financial Group Offer?

Principal Financial Group delivers retirement and investment solutions to individuals and employers. Its financial solutions may be optimized for growth or help investors protect the assets they already have. The company's available products and services include IRAs, annuities, trusts and employer-sponsored retirement plans, as well as group life insurance.

Individual Retirement Accounts

IRAs are tax-advantaged accounts that let individuals save for retirement. Funds typically can’t be withdrawn without penalty before the account holder reaches the age of 59-1/2, and annual limitations for tax deductions may apply. To accommodate differing investment goals, Principal offers two types of IRAs:

  • The Principal IRA: This standard IRA lets the client take charge of investments by choosing a goal, such as asset growth or protection or a specific retirement date. Account holders can choose from investment options, such as stocks, bonds, annuities and mutual funds. For help making smart investment decisions, clients have access to Principal’s experienced financial professionals and other complimentary financial wellness resources.
  • The Principal SimpleInvest IRA: This managed IRA is aimed at individuals who prefer to have someone else to manage their investments. Using an algorithm, SimpleInvest IRAs automatically create and adjust an investment mix personalized to an investor’s financial needs and goals, taking factors, such as risk tolerance and anticipated retirement age, into consideration. SimpleInvest clients have access to Principal's robo-advisor and a team of financial professionals, both of which can provide guidance and answer questions. This option typically includes an annual program fee, which equals .85% of the overall account balance.

Variable Annuities

Principal’s variable annuities are a tax-deferred way for investors to procure a guaranteed retirement income. The IRS doesn't set contribution limits, and account holders control their investment options. These plans typically include an insurance death benefit that doesn’t require underwriting for approval, and the payout won’t need to pass through probate.


A trust through Principal Financial Group can legally protect a consumer's assets, distributing them according to the trustor's wishes after their death. Principal offers several types of trusts, including:

  • Irrevocable life insurance trusts: Principal’s ILITs are designed to eliminate the estate taxation of life insurance funds. Trusts are funded with Principal’s life insurance products and serviced through Principal Trust, which works directly with a client’s attorney or financial professional to streamline the estate-planning process.
  • Charitable trusts: Charitable trusts take assets away from the estate, securing an income stream to facilitate the purchase of life insurance to benefit a client’s heirs.
  • Private split-dollar arrangements: Designed to protect investors against estate taxes, these arrangements maximize annual gift tax exclusions to benefit heirs.

Employer-Sponsored Retirement Plans

Principal’s retirement plan options let employers provide crucial benefits to workers, including:

  • 401(k) and 403(b) plans: These employer-sponsored retirement plans offer workers long-term growth and savings potential, reduced taxable income and automatic payroll deductions. Employers may choose to match a percentage of employee contributions.
  • Non-qualified deferred compensation plans: These plans offer employees a tax-deferred way to supplement employer-sponsored retirement plans. Plans may include a personalized investment strategy and compounded earnings, and payouts typically aren't affected by age restrictions.

Group Life Insurance

Although Principal discontinued its line of individual life insurance products in 2021, consumers may still get death benefits through the company’s variable annuities and trust products. Principal also sells two types of group life insurance benefits to employers, including:

  • Group term life: Principal's employer-paid plans offer up to $1 million in benefits, with optional dependent coverage for spouses or children aged 26 and under. If employment ends, plans may be convertible to individual policies, so coverage can continue.
  • Voluntary term life: These employer-sponsored plans let employees purchase policies through payroll deductions, with coverage up to a maximum of $500,000. Workers may also get optional dependent coverage for spouses or children aged 26 and under. Conversion and portability options are available for individuals whose employment ends.

Although no new life insurance plans are being issued through Principal Financial Group, the company will continue servicing its existing life insurance policies.  

Additional Products

Principal also offers several life insurance-adjacent products, including:

  • Disability income insurance: Disability insurance acts as a financial backup if you become seriously ill or injured and can’t work.
  • Disability income retirement insurance: If you become seriously ill or disabled, a DI retirement insurance policy places money in a trust, which may be used as retirement income later in life. Investments are based on the insured’s risk tolerance, and payments can be made to the trust until age 65 or 67. Once the insured reaches retirement age, payments are made in monthly installments.

The Pros and Cons of Principal Life Insurance

Principal Financial Group brings more than 140 years of financial protection experience to its clients. The company has strong financial ratings through the major industry ratings agencies, such as Fitch and S&P Global, with an overall stable outlook, so investors can feel comfortable trusting the company with their money. However, Principal no longer offers individual life insurance policies, so plans are only available through employer-sponsored benefits packages.

Principal Financial Group Reviews: What People Are Saying

Favorable reviews of Principal Financial Group note that it’s a trustworthy company with reasonable rates. Satisfied consumers praise its exceptional customer service standards, noting that its representatives are able to successfully answer questions and resolve any issues that arise. However, some customers note delays when requesting hardship withdrawals or rollover distributions.  

Is a Principal Life Insurance Policy Right for You?

Principal life insurance policies may be ideal for companies and organizations that want to provide group life insurance benefits to workers or members. Companies can choose between employer-paid plans and optional employee-purchased coverage, with benefits that may reach $1 million. These plans typically offer options for conversion to an individual plan for workers who are no longer employed with the company.

Christian Worstell
About the Author

Christian Worstell is a senior Medicare and health insurance writer with He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.

Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.

While at HelpAdvisor, Christian has written hundreds of articles that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.

Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.

A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism. You can find Christian’s most recent articles in our blog.

If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at

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