Yes — a Principal indexed universal life policy can be sold in a life settlement if the policyholder and the policy qualify, and Principal’s permission is not required. The owner of a life insurance policy holds transferable property rights. When a settlement closes, the carrier records a new owner and beneficiary; it neither approves nor prices the transaction. Everything that determines whether a sale is worthwhile lives in the contract and in the insured’s medical history.
Indexed universal life is the product most likely to behave differently than its owner expects. An IUL credits interest linked to an index — commonly the S&P 500 price return, which excludes dividends — subject to a cap and a participation rate, with a floor usually set at 0%. Cost-of-insurance charges, per-thousand charges and rider fees are deducted monthly from account value regardless of what the index does, and carriers may lower current caps and raise current COI rates on in-force contracts within guaranteed limits. Over twenty years that arithmetic can turn a policy illustrated as self-sustaining into one that needs real money.
Principal Financial Group is headquartered in Des Moines, Iowa, with roots dating to 1879, and its life insurance subsidiary is Principal Life Insurance Company. Principal announced a strategic review in 2021 that led it to step back from retail consumer life insurance and retail fixed annuities to focus on retirement and benefits — so many individual Principal life policies now sit in a block that is closed to new sales. Confirm the current status of your specific product with Principal as of 2026. Pine Lake Life Solutions is not affiliated with Principal.
In This Article
- A Closed Retail Block: What It Means for You
- Your Rights Do Not Shrink When a Block Closes
- Diagnose the Policy Before You Decide Anything
- The In-Force Illustration Is the Deciding Document
- How a Buyer Arrives at an Offer
- Compare Every Exit, Including Staying Put
- The First Step Is One Page
- Frequently Asked Questions
A Closed Retail Block: What It Means for You
Principal’s decision to step back from retail consumer life insurance did not cancel anyone’s policy. In-force contracts continue on their existing terms, guarantees intact, and the company continues to service them. What changes is the ecosystem around the policy.
In a closed block, no new sales flow in, the product is no longer marketed, and the agent who sold it has often moved on to other carriers or retired. Nobody has a commercial reason to review your contract. That is why closed-block policies are disproportionately represented among the lapses we hear about — not because the insurer did anything wrong, but because no one was watching the account value fall. See what to do with an orphaned policy.
Your Rights Do Not Shrink When a Block Closes
Some owners assume a closed block gives the carrier license to change terms. It does not. Guaranteed elements — guaranteed minimum crediting rates, maximum cost-of-insurance rates, guaranteed cash values where applicable — remain exactly as written. Non-guaranteed elements such as declared caps and current COI rates remain adjustable within the contract’s stated limits, the same as they always were.
You also retain every ownership right, including the right to request an in-force illustration, to change the beneficiary, to reduce the face amount, to take a policy loan, to surrender, and to sell. Confirm your specific guarantees by reading the policy schedule pages, and ask the service center to identify which elements are guaranteed and which are current. Our explanation of cost of insurance sets out where the guaranteed maximums live.
Diagnose the Policy Before You Decide Anything
Do this in one afternoon. Retrieve your last three annual statements. Note the declared cap or participation rate on each index account, the total monthly deductions for the year, the account value at each year end, and the loan balance if any. Then call Principal’s service center and ask for the projected lapse year on both current and guaranteed assumptions.
Two patterns should prompt action. Account value falling in a year the index rose means charges are outrunning credits. A projected lapse year that moves closer with each statement means the policy is on a clock. Both are common in mature IUL and both are fixable while the policy is still in force. See the annual statement, line by line.
| Element of Your Policy | Guaranteed or Current? | Can the Carrier Change It? |
|---|---|---|
| Death benefit as issued | Guaranteed while in force | No |
| Maximum cost-of-insurance rate | Guaranteed maximum in contract | No, only up to that ceiling |
| Current cost-of-insurance rate | Current | Yes, within the guaranteed maximum |
| Declared cap / participation rate | Current, with a guaranteed minimum | Yes, above the stated minimum |
| Index floor (usually 0%) | Guaranteed | No |
| Your right to sell the policy | Ownership right | No |
The In-Force Illustration Is the Deciding Document
Request it on current assumptions and again on guaranteed assumptions, in writing, and keep both. It is free to the owner. This is the document that replaces the twenty-year-old sales illustration in your file, and it is what a settlement buyer will price from.
Read the lapse year in each column, then find the annual premium required to carry the policy to maturity. That premium is your carrying cost and the buyer’s carrying cost, and it is the hinge of the whole decision. If the number has become unaffordable for you but is manageable for an institutional buyer with a different cost of capital, a settlement is worth pricing. See why the in-force illustration matters and use the request script.
How a Buyer Arrives at an Offer
The model is a present-value calculation: expected net death benefit, minus projected premiums to maturity, discounted at the buyer’s required return, distributed across the duration range in an independent life-expectancy report. Medical records reach those underwriters only under a HIPAA authorization you sign, and you can revoke it.
Indexed crediting is modeled conservatively, so the illustrated rate is nearly irrelevant to the offer. What matters is the insured’s age and health, the death benefit net of loans, and the premium needed to keep the contract alive. See how buyers price a policy and how the HIPAA authorization works.
Compare Every Exit, Including Staying Put
Reduce the face amount to lower charges. Consider a 1035 exchange into a guaranteed contract if coverage is still needed. Surrender for cash value if the policy is small and there is no market. Ask about a retained death benefit structure to end premiums while heirs keep part of the coverage. Do not let a loaned policy simply lapse; that can generate taxable income with no cash to cover it.
For policies that qualify, the GAO’s market study (GAO-10-775) reported typical proceeds of roughly 10% to 35% of face value, several times cash surrender value. If your family still needs the death benefit and the premium is affordable, keeping the policy is the right answer, and a good review will say so plainly. See when keeping the policy wins.
The First Step Is One Page
Send the policy cover page — issuing company, policy number, face amount, issue date — and request a free policy review. There is no cost and no obligation, and you will get a straight answer on whether the contract is a realistic candidate. To ask questions first, call (305) 209-7183.
A full transaction generally takes 60 to 120 days, with medical record collection and independent life-expectancy reports consuming most of that. Offers come in writing; closing funds are held by an independent escrow agent until the carrier confirms the ownership change; and most states provide a rescission window after funding — confirm the period that applies in your state. This page is educational only and is not legal, tax, or investment advice.
Frequently Asked Questions
Principal stopped selling retail life insurance. Is my policy still valid?
Yes. Principal announced a strategic shift in 2021 that led it to step back from retail consumer life insurance, but existing in-force policies continue on their original terms and are still serviced. Confirm your policy’s current servicing arrangements with Principal as of 2026.
Do I need Principal’s permission to sell my IUL?
No. The policy is your property and may be transferred. Principal records the new owner and beneficiary after the sale closes and does not approve or block it.
Is Pine Lake affiliated with Principal?
No. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Principal Financial Group or Principal Life Insurance Company. The name appears here only to describe the type of policy.
Does a closed block reduce what my policy is worth?
Not by itself. Buyers price the contract terms, the insured’s life expectancy and the premium needed to sustain the policy. A closed block simply means the product is no longer sold to new customers; your contractual rights are unchanged.
Can the carrier still change my caps and charges?
Non-guaranteed elements such as declared caps, participation rates and current cost-of-insurance rates can generally be adjusted within the guaranteed limits printed in your contract. Guaranteed elements, including the index floor and the maximum COI rate, cannot be changed.
How much might my policy sell for?
There is no set percentage. The federal GAO market study found typical proceeds of roughly 10% to 35% of face value, often several times cash surrender value. Age, health, net death benefit and sustaining premium determine the actual number.
No one has reviewed my policy in a decade. What should I do first?
Request an in-force illustration on current and guaranteed assumptions from Principal. It is free and it will show whether the policy is on track or heading toward lapse. Everything else follows from that document.
What do I send to get a free review?
Only the policy cover page showing the issuing company, policy number, face amount and issue date. There is no cost and no obligation. You can also call (305) 209-7183.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- What Is Indexed Universal Life
- Orphaned Policy No Agent
- What Is Cost Of Insurance
- Annual Statement Line By Line
- In Force Illustration Why It Matters
- Request In Force Illustration Script
- How Buyers Price A Policy
- Life Settlement Hipaa Authorization Explained
- Keeping The Policy Is The Right Answer
- Policy Lapsing What To Do
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.