Principal IDI underwriting guideline changes in response to COVID-19
With the impact of COVID-19 still high, Principal is re-introducing temporary lab and physical measurement underwriting guidelines in California and New York. These more liberal limits make the guidelines for these two states consistent with the permanent guidelines in other states.
Effective immediately, no physical measurements and labs are needed for applicants ages 18-50 up to the amounts listed below for applications where the written or residence state is either California or New York. These temporary limits are in effect until March 31, 2021:
Disability Income (DI)—$10,000/month
Business Overhead Expense—$25,000/month
Disability Buy-Out and Key Person—$750,000
Principal highly recommends the use of Human API and encourages your clients to connect their records through that process. Your underwriter can provide more information on Human API if you need it.
**Updated July 23, 2020 **
In April, Principal implemented temporary adjustments to their underwriting guidelines to help your clients continue to get the coverage they need, while requiring less medical information during difficult times. The temporary guidelines will expire July 31, 2020. But Principal is excited to announce the traditional guidelines that go back into effect August 1 will feature new, more liberal limits for many of your clients.
Higher lab and physical measurement limits
During the course of COVID-19, Principal did an in-depth analysis of their limits. These new limits strike a great balance of convenience for you and your clients, and a sufficient level of information for Principal to be able to make good underwriting decisions.
Effective August 1, your clients age 50 and younger will have no lab or physical measurement requirements for the following products and benefit amounts:
- Disability Income: up to $10,000 per month
- Business Overhead Expense and Business Loan Protection rider: up to $25,000 per month
- Disability Buy-Out and Key Person: up to $750,000
All other guidelines remain as they were pre-COVID-19.
Additional things to know
- Limits for applications where the applicant is a resident of California or New York return to pre-COVID-19 levels:
- Disability Income: up to $6,000 per month
- Business Overhead Expense and Business Loan Protection rider: up to $10,000 per month
- Disability Buy-Out and Key Person: up to $360,000
- Multi-life cases, ages 51-64, will have pre-COVID-19 limits of $6,000 per month for Disability Income, $10,000 per month for Business Overhead Expense and Business Protection Rider, and $360,000 for Disability Buy-Out and Key Person.
- The new benefit limits do not apply to:
- Income verification limits for Simplified DI
- The Medical Resident Program
There will be a 30-day transition period for business quoted prior to August 1 and where the permanent guidelines are less favorable than the temporary guidelines. To be underwritten based on the temporary guidelines, a case must have an illustration dated prior to August 1 and an application received in the home office by August 31.
** March 23, 2020 **
As we’re monitoring the COVID-19 impact, we’re making adjustments that allow us to continue to serve customers. Use this resource with your clients who place their trust in our insurance solutions. We’ll update this page as needed to address common questions and offer support.
Effective immediately, the individual disability insurance (IDI) underwriting department at Principal® is changing underwriting guidelines for exams and labs. These changes will be effective through May 31 and will be revisited regularly as the pandemic news unfolds.
Labs and physical measurements
No physical measurements and labs are needed for up to the amounts listed below. For amounts beyond those listed below, we’ll evaluate the medical records to determine if labs and physical measurements are needed. We highly recommend the use of Human API and encourage your client to connect their records through that process. Your underwriter can provide more information on Human API if you need it.
- Disability Income: $10,000/month
- Business Overhead Expense: $25,000
- Disability Buy Out and Key Person: $1,000,000
Attending physician statements
We’re temporarily expanding the use of Human API for all medical record requests. Please contact your underwriter and they can let you know the process for Human API if you’re interested in utilizing that process in lieu of the traditional APS.
We recognize that 2019 tax forms may not be available. We’ll attempt to use 2018 information and any 2019 information available (e.g. W2, 1099, etc.) to evaluate your client’s application.
As you have questions, contact your BUA representative. We’re here and ready to help, in any way we can.