Yes — you can sell a Principal universal life policy in a life settlement; it is your property, and neither Principal nor the company now servicing your policy needs to approve the sale. Universal life is the most commonly settled policy type in the market, and Principal UL owners have an extra reason to look hard at their options: Principal exited retail U.S. life insurance sales in 2021, leaving its individual life policies in a closed block that continues to be serviced, partly through reinsurance arrangements (verify your policy’s current administrator, 2026).
Closed blocks and universal life are a demanding combination. UL policies depend on credited interest and cost-of-insurance charges that the company can adjust within contractual limits, and industry-wide, older UL blocks have seen charges rise sharply as insureds age. Owners who bought Principal UL decades ago at illustrated rates that never materialized are now often facing premium demands their retirement budgets can’t absorb.
Before you lapse or surrender, understand what the policy is worth to a buyer. This guide covers the warning signs, the documents, and the decision. Pine Lake Life Solutions is not affiliated with Principal.
In This Article
- Your Policy Survived Principal’s Exit — Here’s What Changed
- Why Universal Life Dominates the Settlement Market
- Five Warning Signs Your Principal UL Is in Trouble
- Fix It or Sell It: The Options Ranked
- Documents to Gather — and Who Services Your Policy Now
- Process, Timeline, and Safeguards
- Other Principal Policy Types
- Frequently Asked Questions
Your Policy Survived Principal’s Exit — Here’s What Changed
Principal announced in 2021 that it would stop selling retail individual life insurance in the United States, refocusing on retirement and benefits businesses. In-force policies were not terminated; they moved into a closed block that continues to be administered, with portions of the business reinsured to third parties (verify which entity services your contract — the name on your latest annual statement is authoritative, as of 2026).
Your contract’s terms are unchanged: the death benefit, the guaranteed minimum interest rate, and the maximum cost-of-insurance rates in the policy all still bind whoever administers it. What a closed block changes is trajectory. No new policies enter, the insured population ages together, and monthly charges climb with age across the whole block. For a flexible-premium product like UL — where underfunding quietly compounds — that makes an annual check of the policy’s health essential rather than optional.
Why Universal Life Dominates the Settlement Market
UL separates premiums from insurance charges: you pay what you choose, the account value earns interest, and the company deducts the monthly cost of insurance. When credited rates run below the original illustration — as they did across the industry through years of low interest rates — the account value erodes while charges accelerate with age. Owners in their 70s and 80s then face a brutal choice: pay sharply higher premiums, or watch the policy lapse after decades of payments.
That squeeze is exactly why UL is the most-settled policy type. A buyer values the death benefit, not your depleted account value, so a UL policy near exhaustion can still command a real offer. The federal GAO study (GAO-10-775) found settled policies typically brought 10% to 35% of face value — roughly 4 to 8 times cash surrender value on average, and the multiple is often most dramatic for underfunded UL because the surrender value is so small. Compare the paths in settlement vs. surrender.
Five Warning Signs Your Principal UL Is in Trouble
Request an in-force illustration from your policy’s current administrator — one projection at your current premium, one at the level premium needed to reach age 100 or maturity. Then check for:
- Projected lapse within 10–15 years at your current payment level.
- Account value declining year over year even while premiums are paid.
- A jump in the premium requested versus what you historically paid.
- Monthly deductions accelerating — visible in your annual statement’s transaction detail.
- Loans or withdrawals quietly compounding against the account.
Any one of these puts the policy on a countdown. The worst response is the passive one — keep half-funding it until it lapses worthless. The better responses are deliberate: refund it, restructure it, surrender it, or sell it, whichever the numbers favor.
| UL Health Check | Where to Look | Red Flag |
|---|---|---|
| Projected lapse date | In-force illustration, current premium | Lapse within 10–15 years |
| Account value trend | Last 3 annual statements | Falling while premiums are paid |
| Required premium | Level-pay-to-maturity illustration | Well above what you have been paying |
| Monthly deductions | Statement transaction detail | Accelerating year over year |
| Loans and withdrawals | Statement loan section | Balance compounding against the account |
| Servicing entity | Latest premium notice | None — just confirm who administers the closed block |
Fix It or Sell It: The Options Ranked
In rough order from most coverage kept to cleanest exit:
- Refund the policy at the level the illustration demands — right only if heirs truly need the coverage and the dollars are there.
- Reduce the face amount. Lower death benefit means lower monthly charges; the account stretches further with no new cash.
- Partial surrender or loan. Extracts cash but accelerates the lapse spiral — handle with care.
- Full surrender. You receive the cash surrender value; for an eroded UL, often a disappointing number.
- Life settlement. Sell for a lump sum that, for qualifying policies, typically runs several times surrender value — including retained-death-benefit structures covered in how the policy options work.
Baseline market eligibility: insured generally in senior years, death benefit of $100,000 or more, policy in force at least two years — the full screen is at what policies qualify.
Documents to Gather — and Who Services Your Policy Now
Because Principal’s individual life block is closed and partly reinsured, start by confirming the current administrator: the entity named on your latest annual statement or premium notice. Then gather:
- The policy cover page — insurer, policy number, face amount, issue date. Enough on its own to start a free review.
- Your latest annual statement — death benefit, account value, surrender value, loans, monthly deduction history.
- An in-force illustration — current-premium and level-pay-to-maturity projections.
Pine Lake’s free policy review starts with the cover page alone; call (305) 209-7183. Knowing your exact cash surrender value — after any remaining surrender charges — gives you the floor every offer must beat.
Process, Timeline, and Safeguards
Expect roughly 60 to 120 days from first screen to funded payment: eligibility review (days), documentation with medical records and life-expectancy estimates (2–4 weeks), written offers, contracts with independent escrow, then the administrator records the new owner and escrow releases funds. Most states provide a rescission window after closing.
Two cautions specific to a struggling UL. First, keep the policy in force through closing — a policy that lapses mid-transaction is worth nothing; tell the reviewer immediately if the account is close to exhaustion so timing is managed. Second, the usual safeguards are non-negotiable: written offers with gross and net-of-commission figures, independent escrow before any ownership change, and a HIPAA release that is specific and revocable.
Other Principal Policy Types
The closed Principal block also includes whole life, term, and guaranteed UL, each with its own settlement math. Whole life brings guaranteed cash value into the comparison; term generally must still be convertible — a deadline worth checking immediately in a closed block; and GUL’s locked no-lapse premiums make it a favorite among buyers. See our guides to selling a Principal whole life policy, a Principal term policy, or a Principal GUL policy.
Frequently Asked Questions
Principal doesn’t sell life insurance anymore. Can I still sell my UL policy?
Yes. Principal’s 2021 exit ended new retail sales, not existing contracts. Your policy sits in a closed block that continues to be serviced, and it remains your transferable property. The sale process is the same as for any carrier’s policy — no permission from the servicing company is needed.
Why is universal life the most commonly settled policy type?
Because UL’s flexible-premium design left many older policies underfunded just as cost-of-insurance charges accelerate with age. Owners facing steep premium demands in their 70s and 80s often prefer selling to lapsing, and buyers value the death benefit far above the eroded account value.
My account value is nearly gone. Is the policy still worth anything?
Possibly, yes. Buyers price the death benefit and the future premiums needed to keep the policy in force — not your account balance. An underfunded UL on an insured whose age and health fit the market can still draw a meaningful offer. Ask for a review before the policy lapses, not after.
How much could a settlement pay versus surrendering?
The federal GAO study (GAO-10-775) found settled policies typically brought 10% to 35% of face value, roughly 4 to 8 times cash surrender value on average — verify current 2026 figures. For eroded UL policies the gap over surrender is often at its widest because the surrender value is so small.
Who administers my Principal policy now?
Check the name and phone number on your most recent annual statement or premium notice. Because parts of Principal’s closed individual life block were reinsured, servicing may sit with a different entity than the Principal brand you remember. That administrator is where in-force illustration requests go.
What is an in-force illustration and why do I need one?
It is a projection showing how your policy performs at given premium levels going forward — the single most revealing document for a UL owner. Request one at your current premium and one at the level premium to maturity. It is free from the administrator and drives both the fix-it and sell-it analysis.
What do I send to start a free review?
Just the policy cover page — insurer, policy number, face amount, issue date. Pine Lake reviews policies with $100,000 or more in death benefit at no cost or obligation. Call (305) 209-7183 or send the page.
How long does selling take, and what if my policy might lapse first?
Plan on roughly 60 to 120 days. If the account value is close to exhaustion, say so up front — keeping the policy in force through closing is essential, and sometimes a small bridging premium is the difference between a five-figure payment and nothing.
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
- Life Settlement Vs Surrender
- Cash Surrender Value Life Insurance
- What Policies Qualify For Life Settlement
- How It Works Policy Options
- Sell My Principal Whole Life Policy
- Sell My Principal Guaranteed Universal Policy
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.