e424b2
 

             
Pricing Supplement Dated September 26, 2006
  Filed pursuant to Rule 424(b)(2)
(To Prospectus dated February 16, 2006, and
       Registration Statement Nos. 333-129763
Prospectus Supplement dated February 16, 2006)
      and 333-129763-01
      CUSIP: 74254PPB2

(PRINCIPAL FINANCIAL GROUP LOGO)

Principal Life Insurance Company
Secured Medium-Term Notes (that are also Asset-Backed Securities)
Issued Through and Obligations of
Principal Life Income Fundings Trust 23 (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:
   $ 250,000,000     Purchasing Agent(s) Discount:   0.35%    
 
                    
Issue Price:
     99.987%     Original Issue Date:   September 29, 2006
 
                    
Net Proceeds to the Trust:
  $ 249,092,500     Stated Maturity Date:   September 30, 2011
 
                    
                     
Specified Currency:
   U.S. Dollars
 
                    
Interest Payment Dates:
  March 30 and September 30 of each year.
 
                    
Initial Interest Payment Date:
  March 30, 2007
 
                    
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:
   5.15%                
 
                    
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   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 Note:
  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:
  o Yes   x No.   If, Yes,
Redemption Date:
            
Redemption
  o In whole only and not in part    
  o May be in whole or in part    
Additional/Other Terms:
            
 
            
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 Aa3 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
Barclays Capital Inc.
   $ 118,750,000  
J.P. Morgan Securities Inc.
   $ 118,750,000  
Banc of America Securities LLC
   $ 2,500,000  
Credit Suisse Securities (USA) LLC
   $ 2,500,000  
Deutsche Bank Securities Inc.
   $ 2,500,000  
Lehman Brothers Inc.
   $ 2,500,000  
Merrill Lynch, Pierce, Fenner & Smith
        
Incorporated
   $ 2,500,000  
 
Total:
   $ 250,000,000  
             
Purchasing Agent(s) Acting as Agent:
  o Yes   x No.   If Yes:
         
Purchasing Agent(s)   Principal Amount
 
                             
 
Total:
                                  
                     
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.:
4-53918                
 
                    
Deposit:
  $250,000,015
 
                    
Net Deposit:
$249,092,500
 
                    
Effective Date:
September 29, 2006
 
                    
Stated Maturity Date:
September 30, 2011
 
                    
Specified Currency:
   U.S. Dollars
 
                    
Interest Payment Dates:
  March 30 and September 30 of each year
 
                    
Initial Interest Payment Date:
  March 30, 2007
 
                    
Type of Interest Rate:
   x Fixed Rate   o Floating Rate      
 
                    
Fixed Rate Funding Agreement:
   x Yes o No.   If, Yes,
 
                    
Interest Rate:
   5.15%
 
                    
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:
  o Yes   x No.   If, Yes,
Redemption Date:
            
Redemption:
  o In whole only and not in part    
  o May be in whole or in part    
Additional Other Terms:
            
 
            

 

             
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:
  September 29, 2006
 
    
Additional/Other Terms If any: