Is Principal a Good Insurance Company?

Principal Financial Group is a Des Moines, Iowa financial services company founded in 1879 that operates at the intersection of retirement plans, asset management, and insurance. Principal Life Insurance Company — the lead insurance subsidiary — holds AM Best A+ (Superior), S&P A+, Moody’s A1, and Fitch AA- ratings, all with stable outlooks. With $304+ billion in assets and operations in multiple countries, Principal is a large, well-capitalized institution with deep roots in employer-sponsored retirement and benefits administration. To evaluate Principal honestly, the most important contextual fact is the strategic shift the company made beginning in 2021: Principal significantly reduced its individual retail life insurance footprint to concentrate on employer-sponsored group benefits, institutional retirement solutions, and asset management. Individual life insurance products remain available through the Benefits & Protection segment, but they are primarily directed at business owners, executives, and employer-sponsored contexts — not the general consumer individual life market. Where Principal remains genuinely competitive for individual clients is in disability income insurance, where the Income Protector product offers a noncancelable, guaranteed-renewable, true own-occupation design with level premiums — a strong product backed by an A+ carrier with a Comdex score of 90. For group dental, vision, disability, and life benefits for small and medium-sized businesses, Principal is one of the market’s well-established options. At Diversified Insurance Brokers, Jason Stolz, CLTC, CRPC, DIA, CAA, evaluates Principal with the context that matters: where it excels for individual and employer clients, and where a multi-carrier comparison is warranted before committing.

Company Snapshot

Financial Strength: A+ with Context

Principal Life Insurance Company’s AM Best A+ (Superior), S&P A+, Moody’s A1, and Fitch AA- ratings place it in a strong four-agency profile with a Comdex composite score of 90. Within the context of the professional disability income insurance market — where independent DI specialists routinely compare Principal against Guardian (Comdex 100), MassMutual (Comdex 98), The Standard (Comdex 84), and Ameritas (Comdex 83) — Principal sits in the middle of this competitive set at 90. This is not a weakness; it is calibration. An A+ carrier with a Comdex of 90 has genuinely strong claims-paying ability. The practical implication is that for a noncancelable disability income policy with a benefit period to age 65, the issuing carrier’s financial permanence over 20–30 years matters — and Principal’s four-agency A+ profile supports that commitment credibly. The underlying balance sheet data confirms the rating: year-end 2024 statutory financials show the reserve and capitalization structure that justifies the stable outlook from all four agencies. For clients evaluating Principal’s ratings against the broader carrier landscape, our resource on what an AM Best rating means covers how the A+ tier translates into practical carrier evaluation criteria for long-duration insurance commitments.

Individual Disability Income: Principal’s Strongest Individual Product

The Income Protector (form series ICC22-800) is Principal’s flagship individual disability income product and the strongest competitive case for individual clients evaluating the company. The policy is noncancelable and guaranteed renewable — meaning Principal cannot cancel it, cannot change the terms, and cannot increase the premium as long as premiums are paid on time. Premiums are level from issue, set at the time of application based on age, sex, state, and occupation class — they do not increase as the insured ages or if health changes. The True Own-Occupation Rider is available, providing benefits when the insured cannot perform the specific duties of their own occupation even if they can work in a different field — the gold standard definition for physicians, dentists, attorneys, and other professionals whose income depends on specific technical skills. The COLA (cost-of-living adjustment) rider, maximum your benefit (MYB) rider, and residual disability rider allow comprehensive customization for professional income protection. For physicians and dentists evaluating Principal’s Income Protector alongside Guardian, MassMutual, and other own-occupation DI carriers, a multi-carrier comparison using actual age, specialty, and rider configuration is the right process — premium differences across carriers at the same coverage level can be meaningful. Our resources on how to get the best disability insurance rates and the best disability insurance rates cover the multi-carrier DI comparison process. For self-employed professionals evaluating DI alongside retirement plan funding, our resource on how long a SEP IRA lasts in retirement covers the longevity risk that makes disability income protection critical for business owners without employer DI coverage.

The 2021 Individual Life Footprint Reduction

Beginning in 2021, Principal made a strategic decision to significantly reduce its individual retail life insurance presence, refocusing resources on its retirement, asset management, and group benefits businesses. Individual life products — term, universal life, IUL, VUL, and survivorship — remain technically available through the Benefits & Protection segment, primarily for business owner and executive benefit applications, but the consumer-facing individual retail life channel is substantially narrower than it was before 2021. For clients who encounter Principal in a life insurance context, the honest framing is that Principal’s life insurance today is primarily designed for employer-sponsored and business planning contexts — key person coverage, deferred compensation funding, executive benefit plans, and survivorship policies for estate planning — rather than general consumer term or permanent life insurance comparison shopping. For individual consumers seeking straightforward term life comparison across the full independent market, our multi-carrier life insurance quoter above covers the carriers competing most actively for individual retail life business. For business owners evaluating life insurance in a corporate planning context, our resources on buy-sell life insurance and key person insurance cover the applications where Principal’s remaining life products have the strongest positioning.

Group Benefits and Retirement: The Core of Principal’s Business

Principal’s strongest competitive positioning for employers is in group dental, vision, disability, and life benefits for small and medium-sized businesses — a market where it has 145+ years of institutional experience. The group dental offering includes a large provider network with rollover provisions that allow unused annual maximum benefits to carry forward, which is a meaningful plan design feature for employees who do not maximize dental benefits every year. Group short-term and long-term disability, group life and AD&D, accident, and critical illness round out a comprehensive SMB benefits package. For business owners evaluating group benefit structures, our resources on group health for 80 employees and how to get the best group health rates cover the employer benefit evaluation process in which Principal dental and disability are frequently compared. On the retirement side, Principal administers 401(k) plans, defined benefit plans, ESOPs, profit-sharing plans, and pension risk transfer products for institutional clients — a business scale that generates the investment portfolio efficiency supporting the A+ ratings. Clients with Principal 401(k) accounts through their employer should note that consumer complaints about retirement plan administration — hardship withdrawal processing, documentation requirements, and customer service responsiveness — appear consistently on consumer platforms, and this service quality pattern should be considered alongside the financial strength credentials. For retirement income planning alongside group benefits, our resources on how long a 457(b) lasts in retirement, how long a Keogh lasts in retirement, sequence of returns risk, and tax-deferred annuity strategies cover the income planning context most relevant to Principal’s employer-focused clientele approaching retirement. For long-term care planning alongside employer benefits decisions, our resource on self-insured long-term care covers the strategy that some business owners evaluate alongside a Principal disability and group benefits package. For Social Security optimization alongside retirement income, our resources on delayed retirement credits, Social Security income limits, and strategies for widows claiming Social Security cover the claiming decisions that interact directly with 401(k) and pension income timing. For burial and final expense planning alongside comprehensive benefit coverage, our resources on the burial insurance calculator, burial insurance for cancer survivors, affordable burial insurance for low-income seniors, and affordable burial insurance with no medical exam cover the final expense planning that falls outside Principal’s product scope. For the annuity market alongside Principal’s pension risk transfer and retirement distribution products, our resources on roll-up versus payout rate and the power of laddering fixed annuities cover the income design mechanics most relevant to clients rolling out of Principal-administered retirement plans.