e424b2
 

             
Pricing Supplement Dated June 2, 2006
   Filed Pursuant to Rule 424(b)(2)
(To Prospectus dated February 16, 2006, and
   Registration Statement Nos. 333-129763 and
Prospectus Supplement dated February 16, 2006)
      333-129763-01
 
            
      CUSIP: 74254PMH2

(PRINCIPAL FINANCIAL GROUP LOGO)

Principal Life Insurance Company
Secured Medium-Term Notes (Callable) (that are also Asset-Backed Securities)
Issued Through and Obligations of
Principal Life Income Fundings Trust 20 (the “Trust” and the “Issuing Entity”)

     The description of this pricing supplement of the particular terms of the Secured Medium-Term Notes offered hereby, and the Funding Agreement (specified below) issued by Principal Life Insurance Company (“Principal Life”) to the Trust, the payment obligations of which are fully and unconditionally guaranteed by the Guarantee (specified below) issued by Principal Financial Group, Inc. to the Trust, supplements the description of the general terms and provisions of the notes, the funding agreements and the guarantees set forth in the accompanying prospectus and prospectus supplement, to which reference is hereby made.

1. The Notes

                     
Principal Amount:
   $50,000,000     Purchasing Agent(s) Discount:   0.0482%    
 
                    
Issue Price:
     99.828%     Original Issue Date:   June 9, 2006
 
                    
Net Proceeds to the Trust:
  $49,889,900     Stated Maturity Date:   June 9, 2011
 
                    
                     
Specified Currency:
   U.S. Dollars
 
                    
Interest Payment Dates:
   June 9 and December 9 of each year.
 
                    
Initial Interest Payment Dates:
   December 9, 2006
 
                    
Regular Record Date:
  15 calendar days prior to the Interest Payment Date
 
                    
Type of Interest Rate:
   x Fixed Rate   o Floating Rate    
 
                    
Fixed Rate Notes:
   x Yes o No.   If, Yes,
 
                    
Interest Rate:
   5.70%                
 
                    
Floating Rate Notes:
   o Yes x No.   If, Yes,
 
                    
Regular Floating Rate Notes:
   o Yes   o No.   If, Yes,
Interest Rate:
    
Interest Rate Basis(es):
    
 
                    
Floating Rate/Fixed Rate Note:
  o Yes   o No.   If, Yes,
Floating Interest Rate:
    
Interest Rate Basis(es):
    
Fixed Interest Rate:
    
Fixed Rate Commencement Date:
   
 
                    
Inverse Floating Rate Note:
  o Yes   o No.   If, Yes,
Fixed Interest Rate:
    
Floating Interest Rate:
   
Interest Rate Basis(es):
    
 
                    
Initial Interest Reset Date:
    

 

 

             
Interest Rate Basis(es). Check all that apply:
       
 
   o CD Rate   o Commercial Paper Rate
 
   o CMT Rate   o Eleventh District Cost of Funds Rate
 
   o Constant Maturity Swap Rate   o Federal Fund Open Rate
 
   o LIBOR   o Federal Funds Rate
 
   o EURIBOR   o Treasury Rate
 
   o Prime Rate   o Other (See Attached)
 
            
If LIBOR:
   o LIBOR Reuters   o LIBOR Moneyline Telerate
 
        LIBOR Currency:    
 
            
If CMT Rate:
            
Designated CMT Telerate Page:
        
If 7052:
   o Weekly Average   o Monthly Average
Designated CMT Maturity Index:
        
 
            
Index Maturity:
    
 
            
Spread (+/-):
    
 
            
Spread Multiplier:
    
 
            
Interest Reset Date(s):
    
 
            
Interest Rate Determination Date(s):
    
 
            
Maximum Interest Rate, if any:
    
 
            
Minimum Interest Rate, if any:
    
 
Calculation Agent:
  Citibank, N.A.    
 
            
Exchange Rate Agent:
   Not applicable.
 
            
Computation of Interest (not applicable unless different than as specified in the prospectus and prospectus supplement):
 
Day Count Convention (not applicable unless different than as specified in the prospectus and prospectus supplement):
 
            
Amortizing Notes:
  o Yes   x No.   If, Yes,
Amortizing Schedule:
    
Additional/Other Terms
    
 
            
Discount Note:
  o Yes   x No.   If, Yes,
Total Amount of Discount:
    
Initial Accrual Period of Discount:
    
Additional/Other Terms:
    
 
            
Redemption Provisions:
  x Yes   o No.   If, Yes,
Redemption Date:
   June 9, 2009
Redemption:
  x In whole only and not in part    
  o May be in whole or in part    
Initial Redemption Percentage:
   100%
Additional/Other Terms:
   The Notes may only be redeemed on the Redemption Date.
 
            
Repayment:
  o Yes   x No.   If, Yes,
Repayment Date(s):
    
Repayment Price:
    
Repayment:
  o In whole only and not in part    
  o May be in whole or in part    
Additional/Other Terms:
    
 
            
Sinking Fund (not applicable unless specified):
  
 
            
Additional Amounts to be Paid for Withholding Tax (not applicable unless specified):
  
 
            
Securities Exchange Listing:
  o Yes   x No.   If, Yes, Name of Exchange:
 
            
Authorized Denominations:
  $1,000        

 

Ratings: The Notes issued under the Program are rated AA by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”). Principal Life expects the Notes to be rated Aa2 by Moody’s Investors Service, Inc. (“Moody’s”).

             
Purchasing Agent(s) Purchasing Notes as Principal:
  x Yes   o No.   If, Yes,
         
Purchasing Agent(s)
   Principal Amount
Lehman Brothers Inc.
   $ 50,000,000  
 
    
 		  
Total:
   $ 50,000,000  
             
Purchasing Agent(s) Acting as Agent:
  o Yes   x No.   If, Yes,
         
Purchasing Agent(s)
   Principal Amount
 
        
 
    
 		  
Total: 
     50,000,000   
                 
State of Organization of the Trust:
New York            
 
                
Additional/Other Terms:
             
 
                
Special Tax Considerations:
             
 
                
2. The Funding Agreement
              
 
                
Funding Agreement Issuer:
Principal Life Insurance Company
 
                
Funding Agreement No.:
7-07984            
 
                
Deposit Amount:
  $50,000,015        
 
                
Net Deposit:
$49,889,900        
 
                
Effective Date:
June 9, 2006        
 
                
Stated Maturity Date:
June 9, 2011        
 
                
Specified Currency:
 U.S. Dollars        
 
                
Interest Payment Dates:
  June 9 and December 9 of each year  
 
                
Initial Interest Payment Date:
  December 9, 2006
 
                
Type of Interest Rate:
   x Fixed Rate   o Floating Rate    
 
                
Fixed Rate Funding Agreement:
   x Yes o No.   If, Yes,
 
                
Interest Rate:
   5.70%            
 
                
Floating Rate Funding Agreement:
   o Yes x No.   If, Yes,
 
                
Regular Floating Rate Funding Agreement:
   o Yes   o No.   If, Yes,
Interest Rate:
                
Interest Rate Basis(es):
                
 
                
Floating Rate/Fixed Rate Funding Agreement:
  o Yes   o No.   If, Yes,
Floating Interest Rate:
    
Interest Rate Basis(es):
    
Fixed Interest Rate:
    
Fixed Rate Commencement Date:
   
 
                
Inverse Floating Rate Funding Agreement:
  o Yes   o No.   If, Yes,
Fixed Interest Rate:
    
Floating Interest Rate:
    
Interest Rate Basis(es):
    
 
                
Initial Interest Rate, if any:
    
 
                
Initial Interest Reset Date:
    
             
Interest Rate Basis(es). Check all that apply:
       
 
   o CD Rate   o Commercial Paper Rate
 
   o CMT Rate   o Eleventh District Cost of Funds Rate
 
   o Constant Maturity Swap Rate   o Federal Funds Open Rate
 
   o LIBOR   o Federal Funds Rate
 
   o EURIBOR   o Treasury Rate
 
   o Prime Rate   o Other (See Attached)
 
            
If LIBOR:
   o LIBOR Reuters Page   o LIBOR Moneyline Telerate
 
        LIBOR Currency:    
 
            
If CMT Rate:
            
Designated CMT Telerate Page:
        
If 7052:
   o Weekly Average   o Monthly Average
Designated CMT Maturity Index:
        

 

             
Index Maturity:
            
 
            
Spread (+/-):
            
 
            
Spread Multiplier:
            
 
            
Interest Reset Date(s):
            
 
            
Interest Rate Determination Date(s):
            
 
            
Maximum Interest Rate, if any:
            
 
            
Minimum Interest Rate, if any:
            
 
            
Calculation of Interest (not applicable unless different than as specified in the prospectus and prospectus supplement):
       
 
            
Day Count Convention (not applicable unless different than as specified in the prospectus and prospectus supplement):
       
 
            
Amortizing Funding Agreement:
  o Yes   x No.   If, Yes,
Amortizing Schedule
            
Additional/Other Terms
    
 
            
Discount Funding Agreement:
  o Yes   x No.   If, Yes,
Total Amount of Discount:
            
Initial Accrual Period of Discount:
            
Additional/Other Terms:
    
 
            
Redemption Provisions:
   x Yes   o No.   If, Yes,
Redemption Date:
   June 9, 2009        
Redemption:
  x In whole only and not in part    
  o May be in whole or in part    
Initial Redemption Percentage:
   100%
 
Additional/Other Terms:
   The Funding Agreement may only be redeemed on the Redemption Date.
 
            
Repayment:
  o Yes   x No.   If, Yes,
Repayment Date(s):
            
Repayment Price:
            
Repayment:
  o In whole only and not in part    
  o May be in whole or in part    
Additional/Other Terms:
            
 
            
Sinking Fund (not applicable unless specified):
    

Additional Amounts to be Paid For Withholding Tax (not applicable unless specified):

Ratings: The Funding Agreement issued under the Program is rated AA by S&P. Principal Life expects the Funding Agreements to be rated Aa2 by Moody’s.

     
Additional/Other Terms if any:
   
 
    
Special Tax Considerations:
   
 
    
3. The Guarantee
    
 
    
Guarantee Issuer:
  Principal Financial Group, Inc.
 
    
Effective Date:
  June 9, 2006
 
    
Additional/Other Terms: