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About Principal
Principal Financial Group is a major Iowa-based financial services company with over 145 years of history in retirement products. Principal Life specializes in variable annuities, registered index-linked annuities (RILAs), and income-focused solutions for pre-retirees and retirees. Known for product flexibility and structured segment options, Principal offers both accumulation and income strategies with meaningful choices around downside protection and rider features.
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How we scored them
Income Options85/100
Financial Strength96/100
Fees & Costs78/100
Flexibility88/100
Customer Service82/100
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The tradeoffs
What works
- Strong A+ ratings from both AM Best and S&P
- Flexible structured segment design on RILA products with multiple protection levels
- Three-rider approach on income VAs allowing buyers to choose accumulation strategy
- Competitive RILA participation rates with optional performance lock-in feature
- Automatic deferred income rider on some VAs with no additional cost
What to watch
- RILA products carry real downside risk beyond buffers—not principal-protected
- Interim value adjustments on RILA mid-term withdrawals can be substantial
- Layered fee structures on income products can exceed 3% annually
- Complex product designs require buyer understanding of structured products
- Some products have limited state availability
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What you could receive
Estimated guaranteed lifetime income based on a single premium payment. Actual rates may vary.
| Investment | Age | Monthly | Annual | Guarantee |
|---|---|---|---|---|
| $100,000 | 60 | $500 | $6,000 | Lifetime |
| $250,000 | 65 | $1,400 | $16,800 | Lifetime |
| $500,000 | 65 | $2,800 | $33,600 | Lifetime |
| $1,000,000 | 70 | $6,200 | $74,400 | Lifetime |
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Fee schedule
| Fee type | Amount | Description |
|---|---|---|
| Variable Annuity M&E | 0.60% - 0.95% | Mortality and Expense charge on variable products, depending on product |
| Income Rider Fee | 1.25% - 1.55% | Annual charge on benefit base for guaranteed lifetime withdrawal riders |
| Surrender Charge | Varies by product | Declining schedule ranging from 3-8% in year 1, declining to 0% over 3-7 years |
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Early withdrawal penalties
Charges apply to amounts above the annual free withdrawal (typically 10%).
| Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 | Yr 6 | Yr 7 | Yr 8 | Yr 9 | Yr 10 |
|---|---|---|---|---|---|---|---|---|---|
| 8% | 8% | 7% | 6% | 5% | 4% | 0% | 0% | 0% | 0% |
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Best fit for these buyers
Investors comfortable with market-linked or structured products seeking income
Buyers who want flexibility to choose different accumulation strategies for income riders
Pre-retirees aged 45-70 planning both growth and eventual lifetime income
Those valuing product depth with multiple indices, segment terms, and buffer options
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Frequently asked questions
Is Principal a good annuity company?
Principal earns an average rating of 4.0/5 across the 5 products we've reviewed, with an AM Best rating of A+ and S&P rating of A+. Their financial strength is rated "Superior" with $650+ Billion in total assets. Principal is particularly strong in financial strength.
How much income can I get from a Principal annuity?
Income depends on your investment amount and age. For example, a $500,000 investment at age 65 could generate approximately $33,600 per year in guaranteed lifetime income. A $250,000 investment at the same age could generate about $16,800 per year.
What are the fees for Principal annuities?
Principal charges Variable Annuity M&E: 0.60% - 0.95%, Income Rider Fee: 1.25% - 1.55%, Surrender Charge: Varies by product. Fee structures vary by product — review the specific product details before purchasing.
What is the surrender period for Principal annuities?
Principal annuities typically have a 10-year surrender period. Charges start at 8% in year one and decline to 0% in the final year. Most products allow 10% annual free withdrawals without penalty.