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Update on Principal After September 30th

Published on September 28, 2021

 

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Update on Principal After September 30, 2021

New Business

  • Principal made a strategic decision to exit the “retail” US life insurance market. 
  • They are committed to insuring the “business market”.
  • In 2020, they launched a guaranteed issue term platform which is a core focus.
  • They are imminently releasing a Private Placement VUL, pending broker dealer approval.
  • They are also releasing a new Survivorship product in January 2022.
  • The current product portfolio including term and CAUL will continue to be available with no changes to pricing or compensation.
  • Enhanced Capacity for Jumbo cases will still be available.

The new focus is on the Business Market, which is defined as the following:

  • Insurance for business owners and their key employees for business planning purposes.
  • Insurance for business owners, their key employees, and their relatives for personal planning purposes.
  • Trust owned insurance for business owners, their key employees, and their relatives for personal planning purposes.
  • New Accelerated Underwriting program for high income earners without an exam up to 50 million for clients affiliated in the business market as noted above.

In Force Block of Business

  • Principal’s desire is to not sell their in-force block of business but rather cede it to a reinsurer and maintain control of policy administration.
  • They expect this process to take anywhere from 6-18 months.
  • No intention to change any term conversion options or provisions.
  • No internal conversations about selling off the term, index UL or VUL block – primary goal is to sell GUL block.
  • Clients can continue to increase face amounts on in-force policies (with full underwriting at current age), leveraging more favorable/older pricing.  

To summarize, Principal plans on maintaining as much control of in-force policy administration as possible. Their strategic focus going forward will be on “business insurance” while still allowing for personal policies on business owners, key employees, and their relatives.  

Contact your GBS Brokerage Manager to discuss how to work with Principal in the future.

 

 

THANK YOU

 

We at GBS Insurance thank you again for your business. For more information or insurance quote requests, please contact your brokerage manager or give us a call at (800) 473-5966

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Woodland Hills, CA 91367

Phone: (800) 473-5966

GBS Insurance and Financial Services, Inc. do not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

© 2021 Arthur J. Gallagher & Co. 

 

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