At Diversified Insurance Brokers, we guide pre-retirees and retirees in comparing insurance and annuity carriers based on financial strength, product transparency, and how well solutions align with real retirement outcomes. If you’re asking, “Is Principal a good insurance company?” the short answer is usually yes. Principal has a long operating history, strong brand recognition, and a reputation for stability. But “good” doesn’t automatically mean “best for you,” especially if your goal is maximizing guaranteed income, preserving flexibility, or building a clean annuity ladder with predictable decision points.

Most shoppers don’t actually want a generic carrier review. They want clarity on three practical questions: will the company be there when the guarantee matters, will the contract behave the way they expect, and is there a better contract available for the same goal at the same time in their state. That’s why we recommend treating Principal as a strong baseline—then benchmarking it against the wider independent annuity marketplace. In many cases, Principal is competitive. In other cases, a niche income carrier, a rate-leading fixed annuity, or a bonus-driven indexed structure can be a better fit depending on your timeline and what you want the money to do.

Principal is also a company that shows up in multiple planning lanes—workplace benefits, retirement plans, life insurance, and annuities—so shoppers sometimes assume that strength in one lane automatically means best-in-class in another. In reality, annuity shopping is contract shopping. The best contract for a 62-year-old rolling over an IRA for income at 67 can be very different from the best contract for a 58-year-old trying to park cash safely for five years, and both can be different from the best solution for someone who wants maximum liquidity and minimal moving parts.

Company snapshot: what Principal is and why it matters

Principal Financial Group is headquartered in Des Moines, Iowa and is widely known for retirement services, workplace benefits, and insurance solutions. For consumers, that often translates to a sense of familiarity. People see Principal through employer-sponsored retirement plans, group benefits, or advisory channels, and then naturally wonder whether Principal is also a strong option for personal annuity planning. The answer is that Principal can be strong, but you want to evaluate the specific product design and how it fits your retirement timeline.

When you evaluate an annuity company, you are really evaluating the reliability of long-term promises. That includes claims-paying ability, reserving philosophy, investment discipline, and the company’s track record navigating different interest-rate environments. A company can be “very strong” and still offer contracts that are not the best fit for a particular goal at a particular time. That’s why we keep the review practical: focus on how Principal tends to be used, what it tends to do well, and the contract-level comparisons you should run before deciding.

For context, if you’re still sorting out the basics of what you’re buying, it helps to anchor the discussion with what a fixed annuity is and how annuities earn interest. Those two topics clarify the difference between “carrier strength” and “contract mechanics,” which is the biggest reason shoppers feel confused when comparing annuities.

What Principal tends to offer in the retirement marketplace

Principal has historically been active in retirement and savings solutions, which is a positive sign for shoppers who want a company that understands retirement planning. In practical terms, Principal tends to offer annuity options that can be used for accumulation, retirement income, or a blend of the two depending on how the contract is designed and what optional riders are available. Principal’s lineup also exists within a broader business that includes workplace retirement plans, and that can influence how and where specific products are distributed.

For many consumers, the first decision is not “Which company?” but “Which annuity category?” Some people want the simplest possible accumulation: a fixed rate for a defined term with clean rules. Others want a contract that can potentially deliver higher lifetime income later, even if the accumulation side is not the primary feature. Others want an indexed structure that may provide additional upside potential while still protecting principal from market losses, as long as they understand the crediting method trade-offs. If you are deciding between these paths, a helpful baseline is fixed annuities vs fixed indexed annuities, because it frames the choice in terms of how the contract behaves over time.

Many retirees also evaluate annuities as a “bond replacement” or “income floor” tool. In that context, you are not looking for a product that looks exciting. You’re looking for a product that behaves reliably and predictably. That is where it becomes more important to compare surrender schedules, free withdrawal provisions, and the income rider economics than to simply choose a big name. If access to funds is important, review how free withdrawals commonly work in annuity free withdrawal rules, because that page helps you spot the real-world liquidity differences between contracts.

Financial strength is important, but it is not the whole story

Principal is generally regarded as financially strong. That matters because an annuity is a long-term contract and the guarantees are only as good as the issuing carrier. Strong financial strength helps support confidence in the promise. But here’s the part most shoppers miss: two financially strong carriers can offer very different contracts. One might lead on rate in a given term window, while another might lead on income factors at a certain age, while another might lead on flexibility and waiver features.

So rather than asking “Is Principal strong?” the more useful question is “Is Principal strong and does this specific contract deliver the best outcomes for my use case?” This is where illustration comparisons matter. A contract that looks fine in marketing can be materially weaker than a competitor when you compare the actual income payout, rider costs, surrender period flexibility, and free withdrawal treatment side-by-side with identical assumptions.

If you’re comparing any annuity, you should also understand surrender charges and how market value adjustments can apply in certain designs. Even a “good company” contract can create frustration if you later discover the surrender rules don’t match your lifestyle or your planned distribution schedule. If you want a clear explanation of how that works, read annuity surrender charges explained before committing.

Where Principal can stand out for retirees and pre-retirees

Principal often stands out for consumers who want a company with a long track record and a broad retirement footprint. If you already know Principal through a workplace plan or you prefer a familiar national brand, that comfort factor can matter. Some consumers also like that Principal is not a “single product” brand. They see it as a comprehensive financial services company, and they appreciate that the carrier has experience supporting retirement plan infrastructure and long-term policyholder servicing.

Another place Principal can work well is when the consumer wants a “mainstream” solution and is not chasing the maximum possible value in one narrow category. In the annuity marketplace, some carriers specialize aggressively. They may price hard for a specific term band or prioritize a specific rider structure, and that can produce strong outcomes for some buyers. But not every buyer wants that. Some buyers want a simpler decision with a stable carrier and a predictable contract, even if another carrier might beat it by a small margin on one dimension.

Principal can also be a reasonable fit when the contract you’re offered matches your planned timeline. For example, if you plan to hold the annuity through the surrender window and you do not require high liquidity early, the surrender schedule may be a minor issue. If your priority is stable accumulation and you’re using the annuity as a conservative anchor, then a clean rate and stable servicing can matter more than niche features.

Where you should be cautious: “good company” does not mean “best annuity”

The biggest mistake retirees make is assuming a company’s brand automatically equals best contract value. The annuity marketplace moves. Rates move. Rider pricing moves. Caps and participation rates change. Bonus structures vary. In some periods, the best value may come from a rate-leading fixed annuity. In other periods, the best value may come from an indexed structure with a bonus that supports higher long-term income. In other periods, the best value may come from a contract built explicitly for income factors rather than accumulation yields.

So if your goal is maximum guaranteed income, you should never choose a carrier without comparing income-focused competitors. Guaranteed lifetime income is not a generic feature; it is a design. Some carriers simply do it better at certain ages and start dates. That is why the most meaningful comparison is a real illustration pack based on your age, state, premium amount, and income start date.

It also matters whether you’re buying for accumulation or income. A contract can be great for accumulation and mediocre for income, or vice versa. Many retirees want both, and that is where product selection gets subtle. If guaranteed lifetime income is a priority, it helps to understand how an income rider works—especially the difference between account value and income base, and how roll-ups and step-ups interact with withdrawals. A foundational explainer is what a GLWB is, because it clarifies what you’re actually paying for and what the guarantee really means.

How Principal fits into common retirement strategies

Most retirees are trying to solve one of a few common problems. The first is “I want my money safe, but I need it to earn more than a bank account.” The second is “I want predictable income, but I don’t want to put everything into a lifetime income annuity today.” The third is “I want to reduce market risk and sequence-of-returns risk, but I still want a plan that feels flexible.” Principal can fit into these strategies if the contract design aligns with the goal and the pricing is competitive.

A practical way to think about annuities is in layers. Some retirees use a layer of safe fixed accumulation to cover near-term stability needs, then a layer of income-focused annuity to build a paycheck floor, and then leave the remainder of their portfolio for growth and liquidity. That layering approach often includes a ladder concept, where the retiree staggers maturity dates or surrender windows so they’re not putting all decision points in the same year. If you want to take that approach seriously, you should compare the contract’s surrender schedule and free withdrawal rules to your intended ladder structure.

Another strategy is “bridge planning.” Some retirees want to delay Social Security, but they don’t want to draw heavily from a volatile portfolio in the early retirement years. In that case, an annuity can create stability and reduce the pressure to sell investments during a down market. Whether Principal is a strong candidate for that depends on the contract type and the income economics you can secure at your age.

What to compare before you choose a Principal annuity

There are a few contract-level comparisons that matter more than almost everything else. First, compare the surrender schedule against your actual plan. If you think you might need large withdrawals early, you must know how surrender charges work and whether a market value adjustment is part of the contract design. Second, compare the free withdrawal provision. Many contracts allow annual penalty-free withdrawals up to a percentage, but the details vary and those details can matter when life happens.

Third, compare the income rider economics if lifetime income is part of the strategy. Rider fee levels, roll-up rates, step-up mechanics, and payout factors at your income start date can produce a wide spread in income outcomes across carriers. Two contracts can look similar in a brochure and be materially different in a real illustration. Fourth, compare beneficiary and legacy treatment if leaving money to family is part of your goal. This is not just about “is there a death benefit,” but about how it is calculated, how it is processed, and what options beneficiaries have. A helpful guide is annuity beneficiary death benefits.

Finally, compare the broader “fit” dimension: are you comfortable buying through a captive channel, or do you want an independent broker comparison across carriers? If you want a true market comparison, this is why working with an independent brokerage matters. A clear explanation of the value of access is covered in best independent insurance agent discussions, because access impacts pricing, features, and how quickly you can pivot if a carrier changes terms.

Who Principal may be a good fit for

Principal may be a good fit if you prioritize financial stability, prefer a mainstream national brand, and you are offered a contract design that is competitive for your specific goal. It can also be a good fit if your plan is straightforward—such as conservative accumulation for a known time horizon—and the pricing in your state is strong relative to current market leaders.

Principal can also make sense for consumers who already have an established relationship through an advisor or workplace channel and who value continuity. That said, we still recommend benchmarking because a quick comparison often reveals whether your comfort choice is also a high-value choice. Sometimes it is. Sometimes the market offers meaningfully stronger outcomes elsewhere.

When you should definitely compare beyond Principal

You should definitely compare beyond Principal if your primary goal is maximizing guaranteed lifetime income from a given premium. Income competition is intense in the annuity market, and the best outcome is rarely guaranteed by choosing a large carrier alone. You should also compare beyond Principal if liquidity is essential and you want the most flexible free withdrawal provisions you can find without sacrificing guarantee quality.

You should also compare beyond Principal if you are evaluating fixed indexed annuities for a blend of accumulation and income. Indexed annuity crediting is not “one size fits all.” Some contracts may offer stronger crediting terms for certain index strategies, while others may be more conservative but cleaner. If you want a deeper understanding of how indexed annuities work before you compare carriers, a helpful primer is how a fixed indexed annuity works.

Finally, you should compare beyond Principal if you suspect you’re only seeing a narrow slice of the market through a limited distribution shelf. The purpose of comparison is not to “avoid Principal.” The purpose is to confirm that the contract you’re considering is truly the best fit for your retirement goals in your state at the time you purchase.

How we help you compare Principal the right way

At Diversified Insurance Brokers, our process is built around outcomes and clarity. We start with your goal—safe accumulation, retirement income, or a blended strategy—and then we narrow to a shortlist of carriers that are strong in that category at that moment. We verify state availability, compare contract rules that affect real-world flexibility, and produce side-by-side illustrations using consistent assumptions so you can make a confident decision.

We also focus on “behavior under stress,” meaning how the contract performs if rates move, if markets decline, or if you need money earlier than planned. A contract that looks great in perfect conditions can be frustrating if the liquidity provisions are too tight or if the rider economics are not aligned with your timeline. Our job is to help you understand those trade-offs before you buy, not after.

If you want to start with a market benchmark and then see how Principal compares, you can review today’s broader annuity marketplace and then request a personalized illustration pack. That way, you’re not guessing whether a contract is competitive—you’re seeing it in black and white based on your own numbers.