Principal Disability Insurance Review: The Best for Physicians Under 50

Principal Life Insurance Company, a member of Principal Financial Group, is one of the “Big 5” insurance carriers that underwrite “true own-occupation” disability policies. This type of long-term disability insurance is necessary for high-income professionals with specialized training, such as doctors and dentists. 

Since multiple insurance companies and coverage variations exist, let’s strip it down to the basics for easy comparison. Keep reading our Principal disability insurance review to learn about key features and coverage options.

Principal disability insurance review: Coverage details

The Principal Income Protector policy was released on May 1, 2023. This product is ideal for ages 50 and under, particularly those who work in medical, dental and legal occupations. It offers flexible coverage with various disability insurance riders, many of which require no additional cost.

Here’s a look at some key policy details for Principal disability insurance.

Principal disability insurance plan highlights

Feature	Options
Monthly coverage (maximum)	Up to $30,000
Benefit period	2 years, 5 years, Age 65, Age 67 or Age 70
Elimination period	60, 90, 180 or 365 days
Definition of disability	Total Disability While Working (“True Own Occupation”)
Standard features	Non-cancelable, guaranteed premiums, conditionally renewable, portable coverage
Policy riders	Maximize Your Benefit, Annual Increase, Presumptive Disability Benefit, Limitation of Benefits for Mental/Nervous and Substance Abuse Disorders, Catastrophic Disability Benefit, Cost of Living Adjustment, Residual Disability and Recovery Benefit

If you’re ready to get quotes from the best disability insurance companies for own-occupation coverage, fill out the form below. SLP Insurance will review your existing coverage and walk you through important insurance policy decisions. Or keep reading for more of our Principal disability insurance review.

Principal disability insurance: Pros and cons

The Principal Income Protector policy offers various benefits and drawbacks.

Pro: You can enhance the definition of disability

Physicians need disability coverage that specifically protects their medical or dental specialty income. Principal Income Protector allows you to choose a stronger definition of disability to include “Total Disability While Working,” which is a true own-occupation level of coverage. This means you can collect disability income while working in another field without putting your disability benefits at risk.

Pro: It offers a new version of a future purchase option rider

A future purchase option allows you to buy additional disability insurance coverage at a later date without another medical exam. This is a standard optional policy rider, but each insurance carrier treats it differently.

Principal offers a unique combination of FPO, and both are no-cost riders. 

• Annual increase (AI) rider. Provides a 3% automatic benefit increase each year on the policy’s anniversary date. 
• Maximize your benefit (MYB) rider. If you have an AI rider, you can add the MYB rider. It comes with unlimited increases based on income in the first three policy years. After that, you can purchase additional coverage for significant income or life events (e.g., marriage, birth or adoption, involuntary loss of group coverage).

Keep in mind that “no cost” simply means it won’t add to the cost of your policy. But your premiums will increase as your benefit increases.

Additionally, the AI rider will terminate if you decline two consecutive increases throughout the life of your policy. The MYB rider may also terminate as a result of ending the AI rider.

Pro: Has various built-in features and optional policy riders

Principal offers a wide variety of benefit periods (e.g., 2- and 5-year or until age 65, 67 or 70) and elimination periods (e.g., 60, 90, 180 or 365 days). Additionally, its monthly benefit amount maxes out at $30,000.

Here’s a breakdown of the Principal policy offerings. Note that these are very basic explanations for each feature or rider. We recommend speaking with a knowledgeable insurance broker to discuss which options make sense for you.

Built-in policy features

• Interrupted elimination period. Allows for non-consecutive days of disability to satisfy the elimination period requirement.
• Military suspension. Allows servicemembers to suspend the policy while on active duty.
• Recurring disability. Provides protection if you return to work and become disabled again from the same or related cause.
• Rehabilitation benefit. Pays an additional benefit if the policyholder participates in a rehabilitation program.
• Transplant surgery benefit. Pays a benefit if a disability is the result of a transplant.
• Waiver of premium benefit. You won’t pay premiums while on claim.

No cost policy riders

• AI rider. Automatic 3% policy benefit increase each year.
• MYB rider. Allows you to buy more coverage due to certain life events or income changes.
• Limitation of benefits for mental/nervous and substance abuse disorders (MNSA) rider. Required for emergency room physicians, anesthesiologists, pain-management physicians, nurse anesthetists, pharmacists and any resident who has declared one of these specialties.
• Presumptive disability benefit. Pays a benefit if you lose sight, hearing, speech, or both hands or feet — regardless of your ability to work.

Cost riders

• Catastrophic disability benefit. Provides an increased monthly benefit for a severe disability that prevents you from performing daily living activities (e.g., eating, dressing, bathing, etc.).
• Cost of living adjustment (COLA). Kicks in once you become disabled to help your benefits keep pace with inflation.
• Death benefit. Pays survivor benefit if you pass away while receiving disability insurance benefits.
• Capital sum benefit. Additional lump sum benefit if you lose the use of a hand or foot or sight in one eye.
• Supplemental health benefit. Additional lump sum if disabled due to a critical illness.
• Residual disability and recovery benefit. Pays a benefit if you’re still working but experience a loss of income or reduced hours or job duties.

Pro: Strong reputation for underwriting and client relations

Principal was founded in 1879 as an insurance company and has grown to become a member of the FORTUNE 500 and a global investment management leader. They have historically been a fair insurance carrier when it comes to underwriting and serving its client base.

Pro: Maintains a high financial strength rating

Principal’s most recent financial strength ratings in 2022 and 2023 are as follows:

• A.M. Best: A+, Superior (second highest of 13 rating levels)
• Fitch Ratings: AA-, Very Strong (fourth highest of 19 rating levels)
• Moody’s Investors Service: A1, Good (fifth-highest of 21 rating levels)
• S&P Global: A+, Strong (fifth-highest of 20 rating levels)

Con: The policy version isn’t available in all states

The Principal Income Protector policy isn't currently available to residents of California, Florida, Montana, New York, North Dakota, South Carolina, South Dakota or Wyoming. However, Principal serves all 50 states, with other disability insurance products available.

Con: You might lose the FPO rider if you don’t use it

The AI rider is designed to provide a flat 3% automatic annual increase until you reach age 50 or until your policy has been in place for 20 years. If you decline the increase for two years in a row, the rider will terminate — which, in turn, may terminate your MYB rider.

Con: Premiums can run several hundred dollars a month

An individual disability insurance policy is usually more expensive than group disability coverage options. But the higher cost of disability insurance comes with stronger income protection and better benefits.  

Should you apply for disability insurance with Principal?

There isn’t a one-size-fits-all solution when it comes to disability insurance. The coverage you need will depend on many factors, including your age, occupation and risk tolerance. Additionally, premiums will vary from one insurance company to another. So, you’ll want to do some comparison shopping to find the best coverage and rates.

Disability insurance offerings can change, so it’s best to get a quote and discuss options from an independent insurance broker like SLP Insurance. Fill out the form below, and our team will provide a custom quote that looks at your overall financial needs. We’ll also find the top discounts available for more affordable coverage.