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Financial Professionals Financial professional news Billing process for upcoming 20-Year Term policy renewals
July 08, 2026

Billing process for upcoming 20-Year Term policy renewals

Principal® 20-Year Term policies (2006 series) issued in 2006 and beyond will soon be reaching the end of their initial level term period. Beginning in year 21, these policies will renew for successive one-year terms, at increasing premium rates. To help minimize the effect of higher renewal amounts, and to allow time for you to have discussions with your impacted clients about their long-term coverage options, billing for these policies will be set to the shortest billing period available (providing the lowest premium amount) prior to the start of policy year 21. 

What your clients can expect

A letter (see sample below) will be sent to policy owners 60 days prior to the end of the 20th policy year notifying them of their new premium amount and the payment mode their policy will be changed to prior to the start of year 21. Billing for renewing policies will automatically be changed, based on their current mode, as follows:
 

  • Pre-Authorized Check (PAC): Annual, semi-annual, or quarterly mode will be changed to monthly PAC. If already on monthly PAC, no billing change will occur.
  • Direct bill: Annual or semi-annual mode will be changed to direct bill quarterly.
     

Additionally, the modal factor (typically applied for payment periods less than annual) will be eliminated for these policies, further reducing the amount for all those not paying annually. 

With the 60-day letter, we’re providing clients with the lead time they need to make a decision that works for their situation.  

Questions?
Contact policy holder service at 800-247-9988. 
 


Sample Letter for policy owner on PAC billing:

Dear [Policy Owner],

In accordance with the terms specified in the policy, the annual premium for the Term life insurance policy shown above will be increasing from $700 to $2,400 on the upcoming policy anniversary date of 9/1/2026. You are currently paying on a quarterly basis. 

Because you’re reaching the end of your initial level premium period, you may notice a substantial 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, and your premium will likely increase annually as well. If you would 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 currently set up for monthly automatic premium withdrawals, there is no change other than the increase in the premium amount. 
  • If you’re set up for quarterly, semi-annual, or annual automatic premium withdrawals, we will be switching you to a monthly automatic premium withdrawal beginning on the upcoming anniversary date. Your new monthly withdrawal amount will be $200. 
    • By utilizing this more frequent payment option, the payment is more manageable and allows you to keep your coverage in place for a longer period of time while you decide what is best for your situation.
    • We will waive the additional charges that are normally associated with the more frequent payment option.
    • Please note that you will not receive a monthly letter reminding you of the upcoming draw.

If you’d prefer that your premium payment frequency remains unchanged, please contact us as soon as possible.


What happens next?

If you don’t contact us, your new premium amount will be automatically withdrawn from your account on a monthly basis.  If this represents a change for you, you will also receive a letter confirming the new frequency and payment amount. If you have any questions, please contact us at the number shown below.

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.

Sincerely,

Individual Life Insurance Customer Service