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Reminder: Term renewal billing process

02/11/2025

When Principal® level term policies (10-, 15-, 20-, and 30-Year) complete their Initial Level Premium Period, they renew for successive one-year terms at new, higher premium amounts. To help reduce any surprise to policy owners paying by Pre-Authorized Check (PAC), we introduced a change to provide them advance notice of their premium change. A letter is sent to policy owners 60 days prior to the end of the Initial Level Premium Period, notifying them of the new premium amount and giving them the option of remaining on PAC or changing to direct bill. Below for a sample of this letter.

Here's an overview of policy owner options:

  • If they want to continue with PAC, no further action will be required. Their PAC withdrawal will be adjusted to the higher amount and will continue to draft as before. 
  • If they want to discontinue PAC and switch to paper billing, they’ll need to contact the home office directly or change their option at www.principal.com. 
  • For those that don’t respond, we’ll continue to draft by PAC at the higher premium amount. 
  • If they’re already on direct bill, nothing changes.

This process was initially effective for Principal® 10-Year Term policies renewing for their 11th policy year and Principal® 15-Year Term renewing for their 16th year, starting in 2024. The same process will be in effect for Principal® 20-Year Term policies as they reach the end of their Initial Level Premium Periods starting in 2026.   

Benefit for your clients

With the 60-day letter, we provide policy owners with the lead time they need to make a decision that’s right for their situation—like maintaining their preferred payment method, moving to direct bill, changing the premium mode, or seeking other options.  

Questions?

Contact policy holder service at 800-247-9988. 
 
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Sample policy owner letter

Dear Policy Owner,

In accordance with the terms specified in the policy, the premium for the Term life insurance policy shown above will be increasing from $USD to $USD on the upcoming policy anniversary date of Month/Day/Year.

Because you’re reaching the end of your initial level premium period, you may notice a notable increase in your premium amount. This is because your level premiums are ending (see your data pages for details). Your policy will continue to renew for successive one-year periods each year; however, your premium can potentially increase each year as well. If you’d like to discuss your options, please contact your financial representative or call our home office at the number below.

What does this mean to me?

  • If you’re set up to receive a paper bill, there’s no action needed at this time.
  • If you’re set up for automatic premium withdrawals and you’d like to continue with the withdrawals, at the higher amount, no action is needed.
  • However, if you’d like to discontinue the automatic withdrawals and switch to a paper bill, you need to contact us or go online to make that change as soon as possible.

We’re here to help. If you have any questions, please call us at the number listed below. Thanks for choosing Principal for your insurance needs. 


For financial professional/institutional use only.
Insurance products issued by Principal National Life Insurance Company (except in NY) and Principal Life Insurance Company®, and the companies available through the Preferred Product Network, Inc. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., Member SIPC and/or independent broker/dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392.
 

4187158-022025

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