497 1 freedomall2.htm FREEDOM PROSP5-1-2010 freedomall2.htm - Generated by SEC Publisher for SEC Filing
PRINCIPAL FREEDOMSM VARIABLE ANNUITY
ISSUED BY PRINCIPAL LIFE INSURANCE COMPANY (THE “ COMPANY” ) 
This Prospectus is dated May 1, 2010.

The Company no longer offers or issues the Contract. This Prospectus is only for the use of the current Contract 
owners. 
 
The individual flexible premium deferred variable annuity contract (“ Contract” ) described in this Prospectus is 
funded with the Principal Life Insurance Company Separate Account B (“ Separate Account” ) and a fixed account 
(“ Fixed Account” ). The Fixed Account is a part of our General Account. The assets of each division of the Separate 
Account are invested in shares of a corresponding underlying mutual fund (the “ underlying mutual funds” ). The 
divisions available through the Contract are: 

American Century Variable Portfolios, Inc. – Class 1  Principal Variable Contracts Funds, Inc. – Class 1 (cont.) 
 •  Income & Growth Fund   •  MidCap Blend Account 
Franklin Templeton Variable Insurance Products Trust   •  MidCap Growth Account I(2) 
 •  Templeton Growth Securities Fund – Class 2   •  MidCap Value Account II(3) 
Principal Variable Contracts Funds, Inc. – Class 1   •  Money Market Account 
 •  Bond & Mortgage Securities Account   •  Mortgage Securities Account(4) 
 •  Diversified International Account   •  Short-Term Bond Account(5) 
 •  Government & High Quality Bond Account(1)   •  Short-Term Income Account 
 •  LargeCap Growth Account I   •  SmallCap Blend Account 
 •  LargeCap S&P 500 Index Account   •  SmallCap Growth Account II 
 •  LargeCap Value Account     

(1) Effective July 16, 2010, the Government & High Quality Bond Account will merge into Mortgage Securities Account, and the Mortgage Securities 
     Account will change its name to be known as Government & High Quality Bond Account. 
(2) Effective July 16, 2010, the MidCap Growth Account I will merge into MidCap Blend Account. 
(3) Effective July 16, 2010, the MidCap Value Account II will merge into MidCap Blend Account. 
(4) Effective July 16, 2010, the Mortgage Securities Account will be known as Government & High Quality Bond Account. 
(5) Effective July 16, 2010, the Short-Term Bond Account will merge into Short-Term Income Account. 
 
     This prospectus provides information about the Contract and the Separate Account that you ought to know before 
     investing. It should be read and retained for future reference. Additional information about the Contract is included 
     in the Statement of Additional Information (“ SAI” ), dated May 1, 2010, which has been filed with the Securities and 
     Exchange Commission (the “ Commission” ). The SAI is legally a part of this prospectus. The table of contents of the 
     SAI is at the end of this prospectus. You may obtain a free copy of the SAI by writing or calling: 

Principal FreedomSM Variable Annuity 
Principal Financial Group
P. O. Box 9382
Des Moines, Iowa 50306-9382
Telephone: 1-800-852-4450

An investment in the Contract is not a deposit in any bank and is not insured or guaranteed by the Federal Deposit 
Insurance Corporation or any other government agency. 
 
These securities have not been approved or disapproved by the Securities and Exchange Commission or 
any state securities commission nor has the Securities and Exchange Commission or any state securities 
commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary 
is a criminal offense. 
 
This prospectus is valid only when attached to the current prospectuses for the underlying mutual funds. 


The Contract offered by this prospectus may not be available in all states. This prospectus is not an offer to sell, or 
solicitation of an offer to buy, the Contract in states in which the offer or solicitation may not be lawfully made. No 
person is authorized to give any information or to make any representation in connection with this Contract other 
than those contained in this prospectus. 


                                                                                                       TABLE OF CONTENTS   
GLOSSARY  5 
SUMMARY OF EXPENSE INFORMATION  6 
SUMMARY  8 
   Investment Limitations  8 
   Transfers  9 
   Surrenders  9 
   Charges and Deductions  9 
   Death Benefit  9 
   Annuity Benefit Payments  9 
   Examination Offer (free look)  10 
THE PRINCIPAL FREEDOMSM VARIABLE ANNUITY  10 
THE COMPANY  10 
THE SEPARATE ACCOUNT  10 
THE UNDERLYING MUTUAL FUNDS  11 
THE CONTRACT  12 
   To Buy a Contract  12 
   The Accumulation Period  13 
   Telephone and Internet Services  17 
   The Annuity Benefit Payment Period  20 
CHARGES AND DEDUCTIONS  22 
   Mortality and Expense Risks Charge  23 
   Premium Taxes  23 
   Fixed Account Surrender Charge and Transfer Fee  23 
   Waiver of Fixed Account Surrender Charge Rider  24 
   Administration Charge  25 
   Special Provisions for Group or Sponsored Arrangements  25 
FIXED ACCOUNT  25 
   General Description  26 
   Fixed Account Accumulated Value  26 
   Fixed Account Transfers, Total and Partial Surrenders  26 
GENERAL PROVISIONS  27 
   The Contract  27 
   Delay of Payments  27 
   Misstatement of Age or Gender  28 
   Assignment  28 
   Change of Owner  28 
   Change of Annuitant  28 
   Change of Beneficiary  28 
   Contract Termination  29 
RIGHTS RESERVED BY THE COMPANY  29 
   Frequent Trading and Market-Timing (Abusive Trading Practices)  29 
PERFORMANCE CALCULATION  30 


FEDERAL TAX MATTERS  31 
   Non-Qualified Contracts  31 
   Required Distributions for Non-Qualified Contracts  31 
   IRA, SEP, and SIMPLE-IRA  32 
   Withholding  33 
   Mutual Fund Diversification  33 
STATE REGULATION  34 
GENERAL INFORMATION  34 
   Reservation Rights  34 
   Legal Opinions  34 
   Legal Proceedings  34 
   Other Variable Annuity Contracts  34 
   Payments to Financial Intermediaries  35 
   Service Arrangements and Compensation  35 
   Independent Registered Public Accounting Firm  35 
FINANCIAL STATEMENTS  35 
TABLE OF SEPARATE ACCOUNT DIVISIONS  36 
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION  41 
CONDENSED FINANCIAL INFORMATION  42 


GLOSSARY 
account – series or portfolio of a mutual fund in which a division invests. 
accumulated value – an amount equal to the Fixed Account value plus the Separate Account value. 
annuitant – the person, including any joint annuitant, on whose life the annuity payment is based. This person may or 
may not be the owner. 
annuitization date – the date the owner’s accumulated value is applied, under an annuity payment option, to make 
income payments. 
contract date – the date that the Contract is issued and which is used to determine contract years. 
contract year – the one-year period beginning on the contract date and ending one day before the contract anniver- 
sary and any subsequent one-year period beginning on a contract anniversary (for example, if the contract date is 
June 5, 2006, the first contract year ends on June 4, 2007, and the first contract anniversary is June 5, 2007). 
division – a part of the Separate Account which invests in shares of an underlying mutual fund. 
Fixed Account – an account which earns guaranteed interest. 
home office – the office where notices, requests and purchase payments must be sent. All amounts payable to us 
under the Contract are payable through the home office. 
investment options – the Fixed Account and Separate Account. 
joint annuitant – one of the annuitants on whose life the annuity benefit payment is based. Any reference to the death 
of the annuitant means the death of the first annuitant to die. 
joint owner – an owner who has an undivided interest with the right of survivorship in this Contract with another 
owner. Any reference to the death of the owner means the death of the first owner to die. 
non-qualified contract – a contract which does not qualify for favorable tax treatment under the Internal Revenue 
Code as a Qualified Plan, Individual Retirement Annuity, Roth IRA, SEP IRA, Simple IRA or Tax Sheltered Annuity. 
notice – any form of communication received by us, at the home office, either in writing or in another form approved 
by us in advance. 
owner – the person, including joint owner, who owns all the rights and privileges of this Contract. 
purchase payments – the gross amount contributed to the Contract. Fixed Account purchase payments include 
transfers into the Fixed Account from any division. 
qualified plans – retirement plans which receive favorable tax treatment under Section 401 or 403(a) of the Internal 
Revenue Code (the “ Code” ). 
transfer – moving all or a portion of your accumulated value to or among one investment option or another. Simulta- 
neous transfers are considered to be one transfer for purposes of calculating the transfer fee, if any. 
underlying mutual fund – a registered open-end investment company, or a separate division or portfolio thereof, in 
which a division invests. 


unit – the accounting measure used to calculate the value of a division prior to annuitization date. 
unit value – a measure used to determine the value of an investment in a division. 
valuation date – each day the New York Stock Exchange (“ NYSE” ) is open. 
valuation period – the period of time from one determination of the value of a unit of a division to the next. Each valu- 
ation period begins at the close of normal trading on the NYSE, generally 4:00 p.m. E.T. (3:00 p.m. C.T.) on each val- 
uation date and ends at the close of normal trading of the NYSE on the next valuation date. 
we, our, us – Principal Life Insurance Company. We are also referred to throughout this prospectus as the Company. 
written request – actual delivery to the Company at the home office of a written notice or request, signed and dated, 
on a form we supply or approve. Your notice may be mailed to: 

Principal FreedomSM Variable Annuity 
Principal Financial Group
P. O. Box 9382
Des Moines, Iowa 50306-9382 

SUMMARY OF EXPENSE INFORMATION 
 
The tables below describe the fees and expenses that you will pay when buying, owning and surrendering the Con- 
tract. 
 
The following table describes the fees and expenses that you will pay at the time that you buy the Contract, surrender 
the Contract or transfer cash value between investment options. 

                                                                                         Contract owner transaction expenses 
Sales charge imposed on purchase payments (as a percentage of     
purchase payments)  •  none 
 
Maximum surrender charge (as a percentage of amount     
surrendered)     
• surrenders from the Separate Account  •  none 
• surrenders from the Fixed Account(1)  •  6% 
 
Transfer Fee (as a percentage of amount transferred)     
• transfer from Separate Account  •  none 
• transfer from Fixed Account(1)  •  6% 
State Premium Taxes (vary by state)     
• guaranteed maximum  •  3.5% of purchase payments made 
• current  •  zero 

(1) Table of Fixed Account Surrender Charges and Transfer Fees 
 
  Surrender charge 
  and transfer fee 
Number of completed contract years  applied to Fixed Account 
since each Fixed Account  surrenders and transfers beyond 
purchase payment* was made  Free Transaction Amount 
 
0 (year of purchase payment)  6% 
1  6% 
2  6% 
3 5%
4 4%
5 3%
6 2%
7 and later 0%
*Includes amounts transferred to the Fixed Account from divisions. Each Fixed Account purchase payment begins in year 0 for purposes of calculating the percentage applied to that payment


Please note that in addition to the fees shown, the Separate Account and/or sponsors of the underlying mutual funds 
may adopt requirements pursuant to rules and/or regulations adopted by federal and/or state regulators which require 
us to collect additional transfer fees and/or impose restrictions on transfers. 
 
The following table describes the fees and expenses that are deducted periodically during the time that you own the 
Contract, not including underlying mutual fund fees and expenses. 

                                                                                                 Periodic Expenses   
 
Separate Account Annual Expenses   
(as a percentage of separate account accumulated value)   
• guaranteed maximum   
       Mortality and Expense Risks Charge  1.25% 
     Administration Charge  0.15% 
     Total Separate Account Annual Expense  1.40% 
 
• current   
     Mortality and Expense Risks Charge  0.85% 
     Administration Charge  0.00% 
     Total Separate Account Annual Expense  0.85% 

This table shows the minimum and maximum total operating expenses, charged by the underlying mutual funds, that 
you may pay periodically during the time that you own the contract. More detail concerning the fees and expenses of 
each underlying mutual fund is contained in its prospectus. 

Minimum and Maximum Annual Underlying Mutual Fund Operating Expenses   
as of December 31, 2009  
 
  Minimum  Maximum 
 
Total annual underlying mutual fund operating expenses (expenses     
   that are deducted from underlying mutual fund assets, including     
   management fees, distribution and/or service (12b-1) fees and     
   other expenses)  0.27%  1.16% 

The annual fees and expenses charged by each underlying mutual fund are shown in each fund’s current 
prospectus. 


Example 
 
This example is intended to help you compare the cost of investing in the contract with the cost of investing in other 
variable annuity contracts. These costs include contract owner transaction expenses, contract fees, separate account 
annual expenses, and underlying mutual fund fees and expenses. Although your actual costs may be higher or lower, 
based on these assumptions, your costs would be as shown below. 
 
This example reflects the maximum charges imposed if you were to purchase the Contract. Also reflects the minimum 
and maximum annual underlying mutual fund operating expenses as of December 31, 2009 (without voluntary waivers 
of fees by the underlying funds, if any). This example assumes: 
 
       •  a $10,000 investment in the Contract for the time periods indicated; 
       •  a 5% return each year; 
       •  no annual contract fee; 
       •  all the accumulated value is invested in the Separate Account divisions; and 
       •  the total Separate Account charges associated with the most expensive combination of optional benefits with 
  highest/ lowest fund expense 

  If you surrender your          If you fully annuitize your 
  contract at the end of the  If you do not contract at the end of the 
  applicable time period  surrender your contract  applicable time period 
 
  1 Yr.  3 Yrs.  5 Yrs.  10 Yrs.  1 Yr.  3 Yrs.  5 Yrs.  10 Yrs.  1 Yr.  3 Yrs.  5 Yrs.  10 Yrs. 
 
Maximum Total Underlying                         
Mutual Fund Operating                         
Expenses (1.16%)  252  773  1,320  2,809  252  773  1,320  2,809  252  773  1,320  2,809 
 
Minimum Total Underlying                         
Mutual Fund Operating                         
Expenses (0.27%)  164  509  877  1,909  164   509  877  1,909  164  509  877  1,909 

SUMMARY 
 
This prospectus describes an individual flexible premium variable annuity offered by the Company. The Contract is 
designed to provide individuals with retirement benefits, including plans and trusts that do not qualify for special tax 
treatment under the Code and for purchase by persons participating in individual retirement annuity plans that meet 
the requirements of Section 408 of the Code. 
 
A significant advantage of the Contract is that it provides the ability to accumulate capital on a tax-deferred basis. The 
purchase of a Contract to fund a tax-qualified retirement account does not provide any additional tax deferred treat- 
ment of earnings beyond the treatment provided by the tax-qualified retirement plan itself. However, the Contract does 
provide benefits such as lifetime income payments, family protection through death benefits and asset allocation. 
 
This is a brief summary of the Contract’s features. More detailed information follows later in this prospectus. 
Investment Limitations 
 
•  Initial purchase payment must be $10,000 or more. 
•  Each subsequent purchase payment must be $50 or more. 
•  The total purchase payments made during the life of the Contract may not be greater than $2 million. 
 
You may allocate your net purchase payments to the investment options. 


• A complete list of the divisions may be found in the TABLE OF SEPARATE ACCOUNT DIVISIONS. Each Division 
  invests in shares of an underlying mutual fund. More detailed information about the underlying mutual funds may 
  be found in the current prospectus for each underlying mutual fund. 
• The investment options also include the Fixed Account. 
Transfers (see Separate Account Division Transfers for additional restrictions) 
 
• During the accumulation period: 
       •  from the divisions: 
  •  dollar amount or percentage of transfer must be specified; and 
  •  transfer may occur on scheduled or unscheduled basis. 
       •  from the Fixed Account: 
  •  percentage or dollar amount of transfer must be specified; and 
  •  amounts available for transfer without payment of a transfer fee are limited (see Fixed Account Transfers, 
    Total and Partial Surrenders). 
• During the annuity benefit payment period, transfers are not permitted (no transfers once payments have begun). 
 
Surrenders (total or partial) (see Separate Account Surrender and Fixed Account Transfers, Total and Partial 
Surrenders) 
 
• During the accumulation period: 
       •  a dollar amount must be specified; 
       •  surrenders before age 59 1/2 may involve an income tax penalty (see Federal Tax Matters); 
       •  surrender amounts may be subject to a surrender charge; and 
       •  a full surrender is permitted prior to the annuitization date. 
• During the annuity benefit payment period, surrenders are not permitted. 
 
Charges and Deductions 
 
• There is no sales charge on purchase payments. 
• A contingent deferred surrender charge is imposed on certain total or partial surrenders from the Fixed Account. 
• A transfer fee applies to certain transfers from the Fixed Account to divisions. 
• A mortality and expense risks daily charge equal to 0.85% per year applies to amounts in the Separate Account. 
  The Company reserves the right to increase this charge, but guarantees that it will not exceed 1.25% per year. 
• The daily Separate Account administration charge is currently zero, but the Company reserves the right to assess 
  a charge not to exceed 0.15% annually. 
• Certain states and local governments impose a premium tax. The Company reserves the right to deduct the 
   amount of the tax from purchase payments or accumulated values. 
 
Death Benefit 
 
• During the accumulation period: 
       •  the death benefit is the greater of: 
  •  accumulated value, or 
  •  purchase payments minus partial surrenders, any transaction fees, surrender charges and transfer fees. 
       •  You may choose to have death benefit payments made under an annuity benefit payment option. 
• During the annuity period, payments to your named beneficiary(ies) will continue only as provided by the annuity 
  benefit payment option selected. 
 
Annuity Benefit Payments 
 
• You may choose from several fixed annuity benefit payment options which start on your selected annuitization 
   date.   
• Annuity benefit payments are made to the owner (or beneficiary depending on the annuity benefit payment option 
  selected). You should carefully consider the tax implications of each annuity benefit payment option (see Annuity 
  Benefit Payment Options and FEDERAL TAX MATTERS). 


Examination Offer (free look) 
 
•  You may return the Contract during the free look which is generally 10 days from the date you receive your 
  Contract. The free look may be longer in certain states. 
•  We return either all purchase payments made or the accumulated value, whichever is required by applicable state 
  law. 
 
THE PRINCIPAL FREEDOMSM VARIABLE ANNUITY 
 
 
The Principal FreedomSM Variable Annuity is significantly different from a fixed annuity. As the owner of a variable 
annuity, you assume the risk of investment gain or loss (as to amounts in the divisions) rather than the insurance com- 
pany. The amount available for annuity benefit payments under a variable annuity is not guaranteed. The amount 
available for payments varies with the investment performance of the portfolio securities of the underlying mutual 
fund(s). 
 
Based on your investment objectives, you direct the allocation of purchase payments and accumulated value. There 
can be no assurance that your investment objectives will be achieved. 
 
THE COMPANY 
 
The Company is a stock life insurance company with authority to transact life and annuity business in all states of the 
United States and the District of Columbia. Our home office is located at: Principal Financial Group, Des Moines, 
Iowa 50392. We are a wholly owned subsidiary of Principal Financial Services, Inc., which in turn, is a wholly owned 
direct subsidiary of Principal Financial Group, Inc., a publicly-traded company. 
 
On June 24, 1879, we were incorporated under Iowa law as a mutual assessment life insurance company named 
Bankers Life Association. We became a legal reserve life insurance company and changed our name to Bankers Life 
Company in 1911. In 1986, we changed our name to Principal Mutual Life Insurance Company. In 1998, we became 
Principal Life Insurance Company, a subsidiary stock life insurance company of Principal Mutual Holding Company, as 
part of a reorganization into a mutual insurance holding company structure. In 2001, Principal Mutual Holding Com- 
pany converted to a stock company through a process called demutualization, resulting in our current organizational 
structure. 
 
THE SEPARATE ACCOUNT 
 
Principal Life Insurance Company Separate Account B was established under Iowa law on January 12, 1970 and was 
registered as a unit investment trust with the SEC on July 17, 1970. This registration does not involve SEC supervision 
of the investments or investment policies of the Separate Account. We do not guarantee the investment results of the 
Separate Account. There is no assurance that the value of your Contract will equal the total of the purchase payments 
you make to us. 
 
The Separate Account is not affected by the rate of return of our general account or by the investment performance of 
any of our other assets. Any income, gain, or loss (whether or not realized) from the assets of the Separate Account 
are credited to or charged against the Separate Account without regard to our other income, gains, or losses. Obliga- 
tions arising from the Contract, including the promise to make annuity benefit payments, are general corporate obliga- 
tions of the Company. Assets of the Separate Account attributed to the reserves and other liabilities under the 
Contract may not be charged with liabilities arising from any of our other businesses. 
 
The Separate Account is divided into divisions. The assets of each division invest in a corresponding underlying 
mutual fund. New divisions may be added and made available. Divisions may also be eliminated from the Separate 
Account following SEC approval. 


The Company does not guarantee the investment results of the Separate Account. There is no assurance that the 
value of your Contract will equal the total of your purchase payments. 
 
In a low interest rate environment, yields for the Money Market division, after deduction of all applicable Contract and 
rider charges, may be negative even though the underlying money market fund’s yield, before deducting for such 
charges, is positive. If you allocate a portion of your Contract value to a Money Market division or participate in a 
scheduled automatic transfers program or Automatic Portfolio Rebalancing program where the Contract value is allo- 
cated to a Money Market division, that portion of your Contract value allocated to the Money Market division may 
decrease in value. 
 
 
THE UNDERLYING MUTUAL FUNDS 
 
The underlying mutual funds are registered under the Investment Company Act of 1940 as open-end investment man- 
agement companies. The underlying mutual funds provide the investment vehicles for the Separate Account. A full 
description of the underlying mutual funds, the investment objectives, policies and restrictions, charges and expenses 
and other operational information are contained in the accompanying prospectuses (which should be read carefully 
before investing) and the Statement of Additional Information (“ SAI” ). You may request additional copies of these 
documents without charge from your registered representative or by calling us at 1-800-852-4450. 
 
We purchase and sell shares of the underlying mutual fund for the Separate Account at their net asset value. Shares 
represent interests in the underlying mutual fund available for investment by the Separate Account. Each underlying 
mutual fund corresponds to one of the divisions. The assets of each division are separate from the others. A division’s 
performance has no effect on the investment performance of any other division. 
 
The underlying mutual funds are NOT available to the general public directly. The underlying mutual funds are avail- 
able only as investment options in variable life insurance policies or variable annuity contracts issued by life insurance 
companies and qualified plans. Some of the underlying mutual funds have been established by investment advisers 
that manage publicly traded mutual funds having similar names and investment objectives. While some of the underly- 
ing mutual funds may be similar to, and may in fact be modeled after publicly traded mutual funds, you should under- 
stand that the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. 
Consequently, the investment performance of any underlying mutual fund may differ substantially from the investment 
performance of a publicly traded mutual fund. 
 
The Table of Separate Account Divisions later in this prospectus contains a brief summary of the investment objec- 
tives and a listing of the advisor and, if applicable, sub-advisor for each division. 
 
Deletion or Substitution of Divisions 
 
We reserve the right to make certain changes if, in our judgement, the changes best serve your interests or are appro- 
priate in carrying out the purpose of the Contract. Any changes are made only to the extent and in the manner permit- 
ted by applicable laws. Also, when required by law, we will obtain your approval of the changes and approval from any 
appropriate regulatory authority. Approvals may not be required in all cases. Examples of the changes we may make 
include:   
 
•  transfer assets from one division to another division; 
•  add, combine or eliminate divisions; or 
•  substitute the shares of a division for shares in another division: 
  •  if shares of a division are no longer available for investment; or 
  •  if in our judgement, investment in a division becomes inappropriate considering the purposes of the division. 
 
If we eliminate or combine existing divisions or transfer assets from one division to another, you may change allocation 
percentages and transfer any value in an affected division to another division(s) without charge. You may exercise this 
exchange privilege until the later of 60 days after a) the effective date of the change, or b) the date you receive notice 
of the options available. You may only exercise this right if you have an interest in the affected division(s). 


Voting Rights 
 
We vote shares of the underlying mutual funds owned by the Separate Account according to the instructions of own- 
ers. 
 
We will notify you of shareholder meetings of the mutual funds underlying the divisions in which you hold units. We will 
send you proxy materials and instructions for you to provide voting instructions to us. We will arrange for the handling 
and tallying of proxies received from you and other owners. If you give no voting instructions, we will vote those shares 
in the same proportion as shares for which we received instructions. 
 
We determine the number of fund shares that you may instruct us to vote by allocating one vote for each $100 of accu- 
mulated contract value in the division. Fractional votes are allocated for amounts less than $100. We determine the 
number of underlying fund shares you may instruct us to vote as of the record date established by the mutual fund for 
its shareholder meeting. In the event that applicable law changes or we are required by regulators to disregard voting 
instructions, we may decide to vote the shares of the underlying mutual funds in our own right. 
 
NOTE: Because there is no required minimum number of votes, a small number of votes can have a disproportion- 
           ate effect. 
 
THE CONTRACT 
 
The descriptions that follow are based on provisions of the Contract offered by this prospectus. You should refer to the 
actual Contract and the terms and limitations of any tax qualified plan which is to be funded by the Contract. Tax qual- 
ified plans are subject to several requirements and limitations which may affect the terms of any particular Contract or 
the advisability of taking certain action permitted by the Contract. 
 
To Buy a Contract 
 
If you want to buy a Contract, you must submit an application and make an initial purchase payment. If the application 
is complete and the Contract applied for is suitable, the Contract is issued. If the completed application is received in 
proper order, the initial purchase payment is credited within two valuation days after the later of receipt of the applica- 
tion or receipt of the initial purchase payment at the Company’s home office. If the initial purchase payment is not cred- 
ited within five valuation days, it is refunded unless we have received your permission to retain the purchase payment 
until we receive the information necessary to issue the Contract. 
 
Tax-qualified retirement arrangements, such as IRAs, SEPs, and SIMPLE-IRAs, are tax-deferred. You derive no 
additional benefit from the tax deferral feature of the annuity. Consequently, an annuity should be used to 
fund an IRA, or other tax qualified retirement arrangement to benefit from the annuity’s features other than tax 
deferral. These features may include guaranteed lifetime income, death benefits without surrender charges, guaran- 
teed caps on fees, and the ability to transfer among investment options without sales or withdrawal charges. 
 
Purchase Payments 
 
The initial purchase payment must be at least $10,000. Subsequent purchase payments must be at least $50. The 
total of all purchase payments may not be greater than $2,000,000 without our prior approval. The company reserves 
the right to increase the minimum amount for each purchase payment to not more than $1,000. 
 
Allocation of purchase payments 
Your purchase payments are allocated to the divisions and/or the Fixed Account according to your instructions. The 
percentage allocation for future purchase payments may be changed, without charge, at any time by sending a written 
request to or calling the home office. The allocation changes are effective at the end of the valuation period in which 
your new instructions are received. You may not allocate your investment to the Fixed Account if it causes the value of 
the Fixed Account to be more than $1,000,000 (without our prior approval). 


Right to Examine the Contract (free look) 
 
It is important to us that you are satisfied with the purchase of your Contract. Under state law, you have the right to 
return the Contract for any reason during the examination offer period (a “ free look” ). The examination offer period is 
the later of 10 days after the Contract is delivered to you, or such later date as specified by applicable state law. 
 
Although we currently allocate your initial purchase payments to the investment options you have selected, we reserve 
the right to allocate initial purchase payments to the Money Market Division during the examination offer period. In 
addition, we are required to allocate initial purchase payments to the Money Market Division if the Contract is issued in 
California and the owner is age 60 or older. After the examination offer period expires, your accumulated value will be 
converted into units of the divisions according to your allocation instructions. The units allocated will be based on the 
unit value next determined for each division. 
 
If you properly exercise your free look, we will rescind the Contract and we will pay you a refund of your current accu- 
mulated value plus any premium tax charge deducted, less any applicable federal and state income tax withholding 
and depending on the state in which the Contract was issued, any applicable fees and charges. The amount returned 
to you may be higher or lower than the purchase payment(s) applied during the examination offer period. Some states 
require us to return to you the amount or your purchase payment(s); if so, we will return the greater of your purchase 
payments or your current accumulated value plus any premium tax charge deducted, less any applicable federal and 
state income tax withholding and depending upon the state in which the Contract was issued, any applicable fees and 
charges. 
 
If you are purchasing this Contract to fund an IRA, SIMPLE-IRA, or SEP-IRA and you return it on or before the seventh 
day of the examination offer period, we will return the greater of: 
 
•  the total purchase payment(s) made; or 
•  your accumulated value plus any premium tax charge deducted, less any applicable federal and state income tax 
  withholding and depending upon the state in which the Contract was issued, any applicable fees and charges. 
 
To return a Contract, you must send a written request to us or to the registered representative who sold it to you before 
the close of business on the last day of the examination offer period. 
 
You may obtain more specific information regarding the free look from your registered representative or by calling us 
at 1-800-852-4450. 
 
The Accumulation Period 
 
The Value of Your Contract 
The value of your Contract is the total of the Separate Account value plus any Fixed Account value. The Fixed Account 
value is described in the section titled FIXED ACCOUNT. 
 
As owner of the Contract, you bear the investment risk. The Contract’s accumulated value reflects the investment 
experience of the divisions that you choose. It also reflects your purchase payments, partial surrenders and the Con- 
tract expenses deducted from the Separate Account. 
 
The Separate Account division accumulated value changes from day to day. To the extent the accumulated value is 
allocated to the Separate Account, you bear the investment risk. At the end of any valuation period, your Contract’s 
value in a division is: 
 
  •  the number of units you have in a division multiplied by 
  •  the value of a unit in the division. 


The number of units is the total of units purchased by allocations to the division from: 
 
  •  your initial purchase payment; 
  •  subsequent purchase payments; and 
  •  transfers from another division or the Fixed Account. 
 
minus units sold: 
 
  •  for partial surrenders from the division; 
  •  as part of a transfer to another division or the Fixed Account; and 
  •  to pay Contract charges and fees. 
 
Unit values are calculated each valuation date at the close of normal trading of the NYSE. To calculate the unit value 
of a division, the unit value from the previous valuation date is multiplied by the divisions’ net investment factor for the 
current valuation period. The number of units does not change due to a change in unit value. 
 
The net investment factor measures the performance of each division. The net investment factor for a valuation period 
is [(a plus b) divided by (c)] minus d where: 
 
  a = the share price (net asset value) of the underlying mutual fund at the end of the valuation period; 
  b = the per share amount of any dividend* (or other distribution) made by the mutual fund during the valuation 
  period; 
  c = the share price (net asset value) of the underlying mutual fund at the end of the previous valuation period; and 
  d = are the total Separate Account annual expenses. 
  *  When an investment owned by an underlying mutual fund pays a dividend, the dividend increases the net asset 
    value of a share of the underlying mutual fund as of the date the dividend is recorded. As the net asset value of 
    a share of an underlying mutual fund increases, the unit value of the corresponding division also reflects an 
    increase. Payment of a dividend under these circumstances does not increase the number of units you own in 
    the division. 
 
The Separate Account charges (if any) and the mortality and expense risks charge are calculated by dividing the 
annual amount of the charge by 365 and multiplying by the number of days in the valuation period. 
 
Purchase Payments 
•  On your application, you direct how your purchase payments will be allocated to the divisions that you choose. 
•  Allocations must be in percentages. 
•  Percentages must be in whole numbers and total 100%. 
•  Subsequent purchase payments are allocated according to your then current allocation instructions. 
•  Changes to the allocation instructions are made without charge. 
  •  A change is effective on the next valuation period after we receive your new instructions. 
  •  You can change the current allocations and future allocation instructions by: 
    •  mailing your instructions to us; 
    •  calling us at 1-800-852-4450 (if telephone privileges apply); 
    •  faxing your instructions to us at 1-866-894-2087; or 
    •  visiting www.principal.com. 
•  Changes to purchase payment allocations do not result in the transfer of any existing division accumulated values. 
  You must provide specific instructions to transfer existing accumulated values. 
•  Purchase payments are credited on the basis of the unit value next determined after we receive a purchase 
  payment. 


Division Transfers 
You may request an unscheduled transfer or set up a scheduled transfer by: 
 
  •  mailing your instructions to us; 
  •  calling us at 1-800-852-4450 (if telephone privileges apply); 
  •  faxing us at 1-866-894-2087; or 
  •  visiting www.principal.com (if internet privileges apply). 
You must specify the dollar amount of percentage to transfer from each division. In states where allowed, we reserve 
the right to reject transfer instructions from someone providing them for multiple contracts for which he or she is not 
the owner. 
 
You may not make a transfer to the Fixed Account if: 
 
  •  a transfer has been made from the Fixed Account to a division within six months; or 
  •  after the transfer, the Fixed Account value would be more than $1,000,000 (without our prior approval). 
 
Unscheduled Transfers 
•  You may make unscheduled division transfers from one division to another division or to the Fixed Account. 
•  The transfer is made, and values determined, as of the end of the valuation period in which we receive your 
  request. 
•  The transfer amount must be equal to or greater than the lesser of $50 or the total value of the division from which 
  the transfer is being made. 
 
Limitations on Unscheduled Transfers. We reserve the right to reject excessive exchanges or purchases if the 
trade would disrupt the management of the Separate Account, any division of the Separate Account or any underlying 
mutual fund. In addition, we may suspend or modify transfer privileges in our sole discretion at any time to prevent 
market timing efforts that could disadvantage other owners. These modifications could include, but not be limited to: 
 
  •  requiring a minimum time period between each transfer; 
  •  imposing a transfer fee; 
  •  limiting the dollar amount that an owner may transfer at any one time; or 
  •  not accepting transfer requests from someone providing requests for multiple Contracts for which he or she is 
    not the owner. 
 
Scheduled Transfers (Dollar Cost Averaging) 
•  You may elect to have transfers made on a scheduled basis. 
•  You must specify the dollar amount of the transfer. 
•  There is no charge for scheduled transfers and no charge for participating in the scheduled transfer program. 
•  You select the transfer date (other than the 29th, 30th or 31st) and the transfer period 
  •  quarterly (on a calendar year or contract year basis) or 
  •  semiannually or annually (on a contract year basis). 
•  If the selected date is not a valuation date, the transfer is completed on the next valuation date. 
•  Transfers continue until your value in the division is zero or we receive notice to stop the transfers. 
•  We reserve the right to limit the number of divisions from which simultaneous transfers are made. In no event will it 
  ever be less than two. 
•  If you want to stop a scheduled transfer, you must provide us notice prior to the date of the scheduled transfer. 
 
Scheduled transfers are designed to reduce the risks that result from market fluctuations. They do this by spreading 
out the allocation of your money to investment options over a longer period of time. This allows you to reduce the risk 
of investing most of your money at a time when market prices are high. The results of this strategy depend on market 
trends and are not guaranteed. 


Example:         
  Month  Amount Invested  Share Price  Shares Purchased 
  January  $100  $25.00  4 
  February  $100  $20.00  5 
  March  $100  $20.00  5 
  April  $100  $10.00  10 
  May  $100  $25.00  4 
  June  $100  $20.00  5 
  Total  $600  $120.00  33 

In the example above, the average share price is $20.00 (total of share prices ($120.00) divided by number of pur- 
chases (6)). The average share cost is $18.18 (amount invested ($600.00) divided by number of shares purchased 
(33)). 
 
Separate Account surrenders 
Surrenders from the Separate Account are generally paid within seven days of the effective date of the request for sur- 
render (or earlier if required by law). However, certain delays in payment are permitted (see GENERAL PROVISIONS 
- Delay of Payment). Surrenders before age 59 1/2 may involve an income tax penalty (see FEDERAL TAX MAT- 
TERS). You must send us a written request for any surrender. 
 
You may specify surrender allocation percentages with each partial surrender request. If you don’t provide us with 
specific percentages, we will use your purchase payment allocation percentages for the partial surrender. 
 
 
Total Surrender 
•  You may surrender the Contract on or before the annuitization date. 
•  You receive the cash surrender value at the end of the valuation period during which we receive your surrender 
  request. 
•  The cash surrender value is the total of the values of your divisions plus any amount you have in the Fixed Account 
  minus any applicable surrender charge or transaction fee. 
•  The written consent of all collateral assignees and irrevocable beneficiaries must be obtained prior to surrender. 
•  We reserve the right to require you to return the Contract to us prior to making any payment though this does not 
  affect the amount of the cash surrender value. 
 
Unscheduled partial surrender 
•  Prior to the annuitization date, you may surrender a part of the Fixed Account and/or Separate Account value by 
  sending us a written request. 
•  You must specify the dollar amount of the surrender (which must be $50 or more). 
•  The surrender is effective at the end of the valuation period during which we receive your written request for 
  surrender. 
•  The surrender is deducted from your Fixed Account value and/or your division(s) according to the surrender 
  allocation percentages you specify. 
•  If surrender allocation percentages are not specified, we use your purchase payment allocation percentages. 
•  We surrender units from the divisions and/or Fixed Account amounts to equal the dollar amount of the surrender 
  request plus any applicable Fixed Account surrender charge. 
•  The accumulated value after the unscheduled partial surrender must be equal or greater than $5,000 (we reserve 
  the right to change the minimum remaining accumulated value but it will not be greater than $10,000). 


Scheduled partial surrender 
•  You may elect partial surrenders on a periodic basis by sending us written notice. 
•  Your accumulated value must be at least $5,000 when the surrenders begin. 
•  Surrenders are made from any of the divisions and/or the Fixed Account. 
•  You may specify monthly, quarterly, semiannually or annually and pick a surrender date (other than the 29th, 30th 
  or 31st). 
•  If the selected date is not a valuation date, the transfer is completed on the next valuation date. 
•  The surrender is deducted from your Fixed Account value and/or any division(s) according to the surrender 
  allocation percentages you specify. 
•  If surrender allocation percentages are not specified, we use your purchase payment allocation percentages. 
•  We surrender units from the divisions and/or Fixed Account to equal the dollar amount of the surrender request 
  plus any applicable Fixed Account surrender charge. 
•  The surrenders continue until the accumulated value is zero or we receive written notice to stop them. 
 
Automatic Portfolio Rebalancing (APR) 
•  APR allows you to maintain a specific percentage of your accumulated value in specified divisions over time. 
•  You may elect APR at any time after the examination offer period has expired. 
•  APR is not available if you have arranged scheduled transfers from the same division. 
•  There is no charge for APR transfers and no charge for participating in the APR program. 
•  APR may be done on the frequency you specify: 
  •  quarterly (on a calendar year or contract year basis); or 
  •  semiannually or annually (on a contract year basis). 
•  You may rebalance by: 
  •  mailing your instructions to us, 
  •  calling us at 1-800-852-4450 (if telephone privileges apply); 
  •  faxing your instructions to us at 1-866-894-2087; or 
  •  visiting www.principal.com. 
 
Divisions are rebalanced at the end of the valuation period during which we receive your request. 
 
       Example: You elect APR to maintain your accumulated value with 50% in the LargeCap Value Division and 
                      50% in the Bond & Mortgage Securities Division. At the end of the specified period, 60% of the 
                      accumulated value is in the LargeCap Value Division, with the remaining 40% in the Bond & 
                      Mortgage Securities Division. By rebalancing, units from the LargeCap Value Division are sold and 
                      invested in the Bond & Mortgage Securities Division so that 50% of the accumulated value is once 
                      again in each division. 
 
Telephone and Internet Services 
 
If you elect telephone services or you elect internet services and satisfy our internet service requirements (which are 
designed to ensure compliance with federal UETA and E-SIGN laws), instructions for the following transactions may 
be given to us via the telephone or internet: 
 
  •  make purchase payment allocation changes; 
  •  set up Dollar Cost Averaging (DCA) scheduled transfers; 
  •  make transfers; and 
  •  make changes to APR. 
 
Neither the Company nor the Separate Account is responsible for the authenticity of telephone service or internet 
transaction requests. We reserve the right to refuse telephone service or internet transaction requests. You are liable 
for a loss resulting from a fraudulent telephone or internet order that we reasonably believe is genuine. We follow pro- 
cedures in an attempt to assure genuine telephone service or internet transactions. If these procedures are not fol- 
lowed, we may be liable for loss caused by unauthorized or fraudulent transactions. The procedures may include 
recording telephone service transactions, requesting personal identification (name, address, security phrase, pass- 
word, daytime telephone number, social security number and/or birth date) and sending written confirmation to your 
address of record. 


Instructions received via our telephone services and/or the internet are binding on both owners if the Contract is jointly 
owned. 
 
If the Contract is owned by a business entity or a trust, an authorized individual (with the proper password) may use 
telephone and/or internet services. Instructions provided by the authorized individual are binding on the owner. 
 
We reserve the right to modify or terminate telephone service or internet transaction procedures at any time. When- 
ever reasonably feasible, we will provide you with prior notice if we modify or terminate telephone service or internet 
services. In some instances, it may not be reasonably feasible to provide prior notice if we modify or terminate tele- 
phone service or internet transaction procedures; however, any modification or termination will apply to all Contract 
owners in a non-discriminatory fashion. 
 
Telephone Services 
Telephone services are available to you. Telephone services may be declined on the application or at any later date 
by providing us with written notice. You may also elect telephone authorization for your registered representative by 
providing us written notice. 
 
If you elect telephone privileges, instructions 
       •  may be given by calling us at 1-800-852-4450 while we are open for business (generally, between 8 a.m. and 
  5 p.m. Eastern Time on any day that the NYSE is open). 
       •  are effective the day they are received if we receive the instructions in good order before the close of normal 
  trading of the NYSE (generally 4:00 p.m. Eastern Time). 
       •  are effective the next valuation day if we receive the instructions when we are not open for business and/or after 
  the NYSE closes its normal trading. 
 
Internet 
Internet services are available to you if you register for a secure login on the Principal Financial Group web site, 
www.principal.com. You may also elect internet authorization for your registered representative by providing us written 
notice. 
 
If you register for internet privileges, instructions 
       •  are effective the day they are received if we receive the instructions in good order before the close of normal 
  trading of the NYSE (generally 4:00 p.m. Eastern Time). 
       •  are effective the next valuation day if we receive the instructions when we are not open for business and/or after 
  the NYSE closes its normal trading. 


Death Benefit 
 
This Contract provides a death benefit upon the death of the owner. The Contract will not provide death benefits upon 
the death of an annuitant unless the annuitant is also an owner or the owner is not a natural person. 
 
The following table illustrates the various situations and the resulting death benefit payment if you die before the annu- 
itization date. 

If you die and  And  Then 
 
You are the sole owner  Your spouse is not  The beneficiary(ies) receive the death benefit under the Contract. 
  named as a primary   
  beneficiary  If a beneficiary dies before you, on your death we will make equal payments to the 
    surviving beneficiaries unless you provided us with other written instructions. If no 
    beneficiary(ies) survive you, the death benefit is paid to your estate in a single pay- 
    ment. 
 
    Upon your death, only your beneficiary(ies’) right to the death benefit will continue; all 
    other rights and benefits under the Contract will terminate. 
You are the sole owner  Your spouse is  Your spouse may either 
  named as a primary  a. elect to continue the Contract; or 
  beneficiary  b. receive the death benefit under the Contract. 
 
    All other beneficiaries receive the death benefit under the Contract. 
 
    If a beneficiary dies before you, on your death we will make equal payments to the 
    surviving beneficiaries unless you provided us with other written instructions. If no 
    beneficiary(ies) survive you, the death benefit is paid to your estate in a single pay- 
    ment. 
 
    Unless your spouse elects to continue the Contract, only your spouse’s and any other 
    beneficiary(ies’) right to the death benefit will continue; all other rights and benefits 
    under the Contract will terminate. 
You are a joint owner  The surviving joint  The surviving owner receives the death benefit under the Contract. 
  owner is not your   
  spouse  Upon your death, only the surviving owner’s right to the death benefit will continue; all 
    other rights and benefits under the Contract will terminate. 
You are a joint owner  The surviving joint  Your spouse may either 
  owner is your spouse  a. elect to continue the Contract; or 
    b. receive the death benefit under the Contract. 
 
    Unless the surviving spouse owner elects to continue the Contract, upon your death, 
    only your spouse’s right to the death benefit will continue; all other rights and benefits 
    under the rider and the Contract will terminate. 
 
 
 
If  And  Then 
 
The annuitant dies  The owner is not a  The beneficiary(ies) receive the death benefit under the Contract. 
  natural person   
    If a beneficiary dies before the annuitant, on the annuitant’s death we will make equal 
    payments to the surviving beneficiaries unless the owner provided us with other writ- 
    ten instructions. If no beneficiary(ies) survive the annuitant, the death benefit is paid 
    to the owner. 
 
    Upon the annuitant’s death, only the beneficiary(ies’) right to the death benefit will 
    continue; all other rights and benefits under the Contract will terminate. 


Before the annuitization date, you may give us written instructions for payment under a death benefit option. If we do 
not receive your instructions, the death benefit is paid according to instructions from the beneficiary(ies). The 
beneficiary(ies) may elect to apply the death benefit under an annuity benefit payment option or receive the death 
benefit as a single payment. Generally, unless the beneficiary(ies) elects otherwise, we pay the death benefit in a 
single payment, subject to proof of your death. 
 
No surrender charge applies when a death benefit is paid. 
 
Amount of the Death Benefit 
The amount of the death benefit is the greater of: 
 
•  your accumulated value on the date we receive all required documents; or 
•  the total of purchase payments minus any partial surrenders, fees and charges as of the date we receive all 
  required documents and notice (including proof) of death. 
 
If you die before the annuitant and your beneficiary is your spouse, we will continue the Contract with your spouse as 
the new owner. Alternatively, within 60 days of your death, your spouse may elect to: 
 
•  apply the death benefit under an annuity payment option; or 
•  receive the death benefit as a single payment. 
 
Payment of Death Benefit 
The accumulated value remains invested in the divisions until the valuation period during which we receive the 
required documents. If more than one beneficiary is named, each beneficiary’s portion of the death benefit remains 
invested in the divisions until the valuation period during which we receive the required documents for that beneficiary. 
After payment of all of the death benefit, the Contract is terminated. 
 
The death benefit is usually paid within five business days of our receiving all documents (including proof of death) 
that we require to process the claim. Payment is made according to benefit instructions provided by you. Some states 
require this payment to be made in less than five business days. Under certain circumstances, this payment may be 
delayed (see Delay of Payments). We pay interest (as required by state law) on the death benefit from the date we 
receive all required documents until payment is made or until the death benefit is applied under an annuity benefit pay- 
ment option. 
 
NOTE: Proof of death includes: a certified copy of a death certificate; a certified copy of a court order; a written 
         statement by a medical doctor; or other proof satisfactory to us. 
 
The Annuity Benefit Payment Period 
 
Annuitization Date 
You may specify an annuitization date in your application. You may change the annuitization date with our prior 
approval. The request must be in writing. You may not select an annuitization date later than the maximum annuitiza- 
tion date found on the data pages. If you do not specify an annuitization date, the annuitization date is the maximum 
annuitization date shown on the data pages. 
 
You may annuitize your Contract at any time by electing to receive payments under an annuity benefit payment option. 
If the accumulated value on the annuitization date is less than $2,000.00 or if the amount applied under an annuity 
benefit payment option is less than the minimum requirement, we may pay out the entire amount in a single payment. 
The contract would then be canceled. You may select when you want the annuity benefit payments to begin (within the 
period that begins the business day following our receipt of your instruction and ends one year after our receipt of your 
instructions). 
 
Once annuity benefit payments begin under the annuity benefit payment option you choose, the annuity benefit pay- 
ment option may not be changed. In addition, once payments begin, you may not surrender or otherwise liquidate or 
commute any of the portion of your accumulated value that has been annuitized. 


Depending on the type of annuity benefit payment option selected, annuity benefit payments that are initiated either 
before or after the annuitization date may be subject to penalty taxes (see FEDERAL TAX MATTERS). You should 
consider this carefully when you select or change the annuity benefit payment commencement date. 
 
Annuity Benefit Payment Options 
We offer fixed annuity benefit payments only. No surrender charge is imposed on any portion of your accumulated 
value that has been annuitized. You may choose from several fixed annuity benefit payment options. Annuity benefit 
payments will be made on the frequency you choose. You may elect to have your annuity benefit payments made on 
a monthly, quarterly, semiannual, or annual basis. The dollar amount of the annuity benefit payments is specified for 
the entire annuity benefit payment period according to the annuity benefit payment option selected. There is no right to 
take any total surrenders after the annuitization date. 
 
The amount of the fixed annuity benefit payment depends on: 
 
       •  the amount of accumulated value applied to the annuity benefit payment option; 
       •  the annuity benefit payment option selected; and 
       •  the age and gender of annuitant (unless the Fixed Period Income benefit payment option is selected). 
 
Annuity benefit payments are determined in accordance with annuity tables and other provisions contained in the Con- 
tract. The annuity benefit payment tables contained in this Contract are based on the 1983 Table A Mortality Table. 
These tables are guaranteed for the life of the Contract. The amount of the initial annuity benefit payment is deter- 
mined by applying the accumulated value as of the date of the application to the annuity table for the annuitant’s annu- 
ity benefit option, gender, and age. 
 
Annuity benefit payments generally are higher for male annuitants than for female annuitants with an otherwise identi- 
cal Contract. This is because statistically females have longer life expectancies than males. In certain states, this dif- 
ference may not be taken into consideration in fixing the annuity benefit payment amount. Additionally, Contracts with 
no gender distinctions are made available for certain employer-sponsored plans because, under most such plans, 
gender discrimination is prohibited by law. 
 
You may select an annuity benefit payment option by written request only. Your selection of an annuity benefit pay- 
ment option may not be changed after annuity benefit payments begin. You may change your selection of an annuity 
benefit payment option (for which no annuity benefit payments have been made) by sending us a written request prior 
to the annuitization date. We must receive your written request on or before the annuitization date. If you fail to elect 
an annuity benefit payment option, we will automatically apply: 
 
       •  for Contracts with one annuitant – Life Income with annuity benefit payments guaranteed for a period of 
  10 years. 
       •  for Contracts with joint annuitants – Joint and Full Survivor Life Income with annuity benefit payments guaran- 
  teed for a period of 10 years. 
 
The available annuity benefit payment options include: 
       •  Fixed Period Income - Level payments are made for a fixed period. You may select a range from 5 to 30 years 
  (state variations may apply). If the annuitant dies before the selected period expires, payments continue to you 
  or the person(s) you designate until the end of the period. Payments stop after all guaranteed payments are 
  made. 
 
       •  Life Income - Level payments are made during the annuitant’s lifetime only. NOTE: There is no death benefit 
  value remaining or further payments when the annuitant dies. If you defer the first payment date, it is 
  possible that you would receive no payments if the annuitant dies before the first payment date. 
 
       •  Life Income with Period Certain - Level payments continue during the annuitant’s lifetime with a guaranteed 
  payment period of 5 to 30 years. If the annuitant dies before all of the guaranteed payments have been made, 
  the guaranteed payments continue to you or the person(s) you designate until the end of the guaranteed 
  payment period. 
 
       •  Joint and Survivor - Payments continue as long as either the annuitant or the joint annuitant is alive. You may 
  also choose an option that lowers the amount of income after the death of a joint annuitant. It is possible that 
  you would only receive one payment under this option if both annuitants die before the second payment is due. 


  If you defer the first payment date, it is possible that you would receive no payments if both annuitants die 
  before the first payment date. NOTE: There is no death benefit value remaining or future payments after 
  both annuitants have died. 
 
       •  Joint and Survivor with Period Certain - Payments continue as long as either the annuitant or the joint 
  annuitant is alive with a guaranteed payment period of 5 to 30 years. You may choose an option that lowers the 
  amount of income after the death of a joint annuitant. If both annuitants die before all guaranteed payments 
  have been made, the guaranteed payments continue to you or the person(s) you designate until the end of the 
  guaranteed payment period. 
 
       •  Joint and Two-thirds Survivor Life Income - Payments continue as long as either the annuitant or the joint 
  annuitant is alive. If either the annuitant or joint annuitant dies, payments continue to the survivor at two-thirds 
  the original amount. Payments stop when both the annuitant and joint annuitant have died. It is possible that 
  only one payment is made under this option if both annuitants die before the second payment is due. If you 
  defer the first payment date, it is possible that you would receive no payments if both annuitants die before the 
  first payment date. NOTE: There is no death benefit value remaining or future payments after both 
  annuitants have died. 
 
Other annuity benefit payment options may be available with our approval. 
Supplementary Contract 
When you annuitize your Contract’s accumulated value, we issue a supplementary fixed annuity contract that provides 
an annuity benefit payment based on the amount you have annuitized and the annuity benefit payment option that you 
have selected. The date of the first annuity benefit payment under the supplementary contract is the effective date of 
that supplementary contract unless you select a date for the first annuity benefit payment that is later than the 
supplementary contract effective date. The first annuity benefit payment must be made within one year of the 
supplementary contract effective date. 
 
Tax Considerations Regarding Annuity Benefit Payment Options 
If you own one or more tax qualified annuity contracts, you may avoid tax penalties if payments from at least one of 
your tax qualified contracts begin no later than April 1 following the calendar year in which you turn age 70 1/2. The 
required minimum distribution payment must be in equal (or substantially equal) amounts over your life or over the 
joint lives of you and your designated beneficiary. These required minimum distribution payments must be made at 
least once a year. Tax penalties may apply at your death on certain excess accumulations. You should confer with 
your tax advisor about any potential tax penalties before you select an annuity benefit payment option or take other 
distributions from the Contract. 
Additional rules apply to distributions under non-qualified contracts (see Required Distributions for Non-Qualified 
Contracts). 
 
Death of Annuitant (during the annuity benefit payment period) 
If the annuitant dies during the annuity benefit payment period, remaining annuity benefit payments are made to the 
owner throughout the guarantee period, if any, or for the life of any joint annuitant, if any. If the owner is the annuitant, 
remaining annuity benefit payments are made to the contingent owner. In all cases the person entitled to receive 
annuity benefit payments also receives any rights and privileges under the annuity benefit payment option. 
 
CHARGES AND DEDUCTIONS 
 
Certain charges are deducted under the Contract. If the charge is not sufficient to cover our costs, we bear the loss. If 
the expense is more than our costs, the excess is profit to the Company. We expect a profit from all the fees and 
charges listed below, except the Premium Tax. 
 
In addition to the charges under the Contract, there are also deductions from and expenses paid out of the assets of 
the underlying mutual funds which are described in the underlying mutual funds’ prospectuses. 


Mortality and Expense Risks Charge 
 
We assess each division with a daily charge for mortality and expense risks. The annual rate of the charge is 0.85% of 
the average daily net assets of the Separate Account. We reserve the right to increase this charge but guarantee that 
it will not exceed 1.25% per year. This charge is assessed only prior to the annuitization date. This charge is assessed 
daily when the value of an accumulation unit is calculated. 
 
We have a mortality risk in that we guarantee payment of a death benefit in a single payment or under an annuity ben- 
efit payment option. No surrender charge is imposed on a death benefit payment which gives us an additional mortality 
risk. 
 
The expense risk that we assume is that the actual expenses incurred in issuing and administering the Contract 
exceed the Contract limits on administrative charges. 
 
If the mortality and expense risks charge is not enough to cover the costs, we bear the loss. If the amount of mortality 
and expense risks charge deducted is more than our costs, the excess is profit to the Company. 
 
Premium Taxes 
 
We reserve the right to deduct an amount to cover any premium taxes imposed by states or other jurisdictions. Any 
deduction is made from either a purchase payment when we receive it, or the accumulated value when you request a 
surrender (total or partial) or it is applied under an annuity benefit payment option. Currently, premium taxes range 
from zero to 3.5%. 
 
Fixed Account Surrender Charge and Transfer Fee 
 
No sales charge is collected or deducted when purchase payments are applied under the Contract to provide an annu- 
ity benefit payment option. A surrender charge is assessed on certain total or partial surrenders from the Fixed 
Account. The amounts we receive from the surrender charge are used to cover some of the expenses of the sale of 
the Contract (commissions and other promotional or distribution expenses). If the surrender charge collected is not 
enough to cover the actual costs of distribution, the costs are paid from the Company’s General Account assets which 
will include profit, if any, from the mortality and expense risks charge. 
 
The surrender charge for any total or partial surrender is a percentage of the Fixed Account purchase payments sur- 
rendered which were received by us during the seven contract years prior to the surrender. The applicable percentage 
which is applied to the sum of the Fixed Account purchase payments (which includes amounts transferred to the Fixed 
Account from any of the divisions) paid during each contract year is determined by the following table. 
 
The Fixed Account transfer fee is assessed on certain transfers from the Fixed Account to the Separate Account (For 
contracts sold in Oregon, South Carolina and Texas, the Fixed Account transfer fee is waived). 

Table of Fixed Account Surrender Charges and Transfer Fees 
Number of completed contract years  Surrender charge and transfer fee applied 
since each Fixed Account  to Fixed Account surrenders and transfers 
purchase payment* was made  beyond Free Transaction Amount 
0 (year of purchase payment)  6% 
1  6% 
2  6% 
3  5% 
4  4% 
5  3% 
6  2% 
7 and later  0 
* Includes amounts transferred to Fixed Account from divisions. Each Fixed Account purchase payment begins in 
   year 0 for purposes of calculating the percentage applied to that payment. 


For purposes of calculating surrenders and transfers, we assume that surrenders and transfers are made in the follow- 
ing order:* 
       •  first from Fixed Account purchase payments we received more than seven completed contract years prior to the 
  surrender (or transfer); 
       •  then from the Fixed Account free transaction amount (first from the Fixed Account’s earnings, then from the 
  oldest Fixed Account purchase payments (first-in, first-out)) described below in FIXED ACCOUNT -Fixed 
  Account Free Transaction Amount; and 
       •  then from Fixed Account purchase payments we received within the seven completed contract years before the 
  surrender (or transfer) on a first-in, first-out basis. 
  * The order for tax reporting purposes is different. You should consult your tax advisor. 
 
Where permitted by state law, we reserve the right to reduce: 
       •  the surrender charge fee for any amounts surrendered from this Contract; and/or 
       •  transfer fees on amounts transferred from the Fixed Account to the Separate Account. 
These reductions would apply to Contracts that are attributable to a conversion from other products issued by the 
Company and its subsidiaries and as otherwise permitted by the Investment Company Act of 1940 (as amended). 
 
For Contracts sold in Massachusetts, Oregon, and Texas: 
       •  There is no transfer fee on purchase payments allocated to the Fixed Account after the 13th contract year. 
       •  There is no surrender charge on purchase payments allocated to the Fixed Account after the 13th contract year. 
 
Waiver of Fixed Account Surrender Charge 
The Fixed Account Surrender Charge will not apply to: 
 
       •  amounts applied under an annuity benefit payment option; or 
       •  payment of death benefit, however, the Surrender Charge does apply to purchase payments made by a 
  surviving spouse after an owner’s death; or 
       •  amounts distributed to satisfy the minimum distribution requirement of Section 401(a)9 of the Code (applies to 
  qualified Contracts only); or 
       •  amounts transferred, after the seventh contract year, from the Contract to a single premium immediate annuity 
  issued by the Company; or 
       •  any amount transferred from a Contract used to fund another annuity contract issued by the Company to the 
  contract owner’s spouse when the distribution is made under a divorce decree. 
 
Waiver of Fixed Account Surrender Charge Rider 
This Waiver of Fixed Account Surrender Charge rider waives the surrender charge on Fixed Account surrenders made 
after the first contract anniversary if the original owner or original annuitant has a critical need. This rider is automati- 
cally made a part of the Contract at issue. There is no charge for this rider. This rider may not be available in all states 
and may be subject to additional restrictions. Some rider provisions may vary from state to state. We may withdraw or 
prospectively restrict the availability of this rider at any time. For more information regarding availability or features of 
this rider, you may contract your registered representative or call us at 1-800-852-4450. 
 
Waiver of the Fixed Account surrender charge is available for critical need if the following conditions are met: 
 
       •  the original owner or original annuitant has a critical need; (NOTE: A change of ownership will terminate this 
  rider; once terminated the rider may not be reinstated.) 
       •  the critical need did not exist before the contract date. 
       •  For the purposes of this section, the following definitions apply: 
  •  critical need - owner’s or annuitant’s confinement to a health care facility, terminal illness diagnosis or total 
    and permanent disability. If the critical need is confinement to a health care facility, the confinement must 
    continue for at least 60 consecutive days after the contract date and the surrender must occur within 90 days 
    of the confinement’s end. 
  •  health care facility - a licensed hospital or inpatient nursing facility providing daily medical treatment and 
    keeping daily medical records for each patient (not primarily providing just residency or retirement care). 


  This does not include a facility primarily providing drug or alcohol treatment, or a facility owned or operated 
  by the owner, annuitant or a member of their immediate families. 
               •  terminal illness - sickness or injury that results in the owner’s or annuitant’s life expectancy being 12 months 
  or less from the date notice to receive a distribution from the Contract is received by the Company. 
               •  total and permanent disability - a disability that occurs after the contract date but before the original owner or 
  annuitant reaches age 65 and qualifies to receive social security disability payments. 
 
The Waiver of Fixed Account Surrender Charge Rider is not available for Contracts sold in Massachusetts. 
 
State variations may apply. 
 
Administration Charge 
 
We reserve the right to assess each division with a daily charge at the annual rate of 0.15% of the average daily net 
assets of the division. This charge would only be imposed before the annuitization date. This charge would be 
assessed to help cover administrative expenses. Administrative expenses include the cost of issuing the Contract, 
clerical, record keeping and bookkeeping services, keeping the required financial and accounting records, communi- 
cating with Contract owners and making regulatory filings. 
 
Special Provisions for Group or Sponsored Arrangements 
 
Where permitted by state law, Contracts may be purchased under group or sponsored arrangements as well as on an 
individual basis. 
 
Group Arrangement – program under which a trustee, employer or similar entity purchases Contracts covering a 
       group of individuals on a group basis. 
 
Sponsored Arrangement – program under which an employer permits group solicitation of its employees or an 
       association permits group solicitation of its members for the purchase of Contracts on an individual basis. 
 
The charges and deductions described above may be reduced or eliminated for Contracts issued in connection with 
group or sponsored arrangements. The rules in effect at the time the application is approved will determine if reduc- 
tions apply. Reductions may include but are not limited to sales of Contracts without, or with reduced, mortality and 
expense risks charges, administrative charge or surrender charges. 
 
Eligibility for and the amount of these reductions are determined by a number of factors, including the number of indi- 
viduals in the group, the amount of expected purchase payments, total assets under management for the Contract 
owner, the relationship among the group’s members, the purpose for which the Contract is being purchased, the 
expected persistency of the Contract, and any other circumstances which, in our opinion, are rationally related to the 
expected reduction in expenses. Reductions reflect the reduced sales efforts and administrative costs resulting from 
these arrangements. We may modify the criteria for and the amount of the reduction in the future. Modifications will not 
unfairly discriminate against any person, including affected Contract owners and other contract owners with contracts 
funded by the Separate Account. 
FIXED ACCOUNT 
 
This prospectus is intended to serve as a disclosure document only for the Contract as it relates to the Separate 
Account. It only contains selected information regarding the Fixed Account. More information concerning the Fixed 
Account is available from the home office or from a registered representative. 
 
You may allocate purchase payments and transfer amounts from the Separate Account to the Fixed Account. Assets 
in the Fixed Account are held in the General Account of the Company. Because of exemptive and exclusionary provi- 
sions, interests in the Fixed Account are not registered under the Securities Act of 1933 and the General Account is 
not registered as an investment company under the Investment Company Act of 1940. The Fixed Account is not sub- 
ject to these Acts. The staff of the Commission does not review the prospectus disclosures relating to the Fixed 
Account. However, these disclosures are subject to certain generally applicable provisions of the federal securities 
laws relating to the accuracy and completeness of statements made in the prospectus. 


General Description 
 
Our obligations with respect to the Fixed Account are supported by the Company’s General Account. The General 
Account is the assets of the Company other than those allocated to any of the Company’s Separate Accounts. Subject 
to applicable law, the Company has sole discretion over the assets in the General Account. 
 
The Company guarantees that purchase payments allocated to the Fixed Account earn interest at a guaranteed inter- 
est rate. In no event will the guaranteed interest rate be less than 3% compounded annually. 
 
Each purchase payment allocated or amount transferred to the Fixed Account earns interest at the guaranteed rate in 
effect on the date it is received or transferred. This rate applies to each purchase payment or amount transferred 
through the end of the contract year. 
 
Each contract anniversary, we declare a renewal interest rate that is guaranteed and applies to the Fixed Account 
value in existence at that time. This rate applies until the end of the contract year. Interest is earned daily and com- 
pounded annually at the end of each contract year. Once credited, the interest is guaranteed and becomes part of the 
accumulated value in the Fixed Account from which deductions for fees and charges may be made. 
Fixed Account Accumulated Value 
 
Your Contract’s Fixed Account accumulated value on any valuation date is the sum of: 
•  purchase payments allocated to the Fixed Account; 
•  plus any transfers to the Fixed Account from the Separate Account; 
•  plus interest credited to the Fixed Account; 
•  minus any surrenders, surrender charges, or transaction fees allocated to the Fixed Account; 
•  minus any transfers (and transfer fees) to the Separate Account. 
 
Fixed Account Transfers, Total and Partial Surrenders 
 
Transfers and surrenders from your investment in the Fixed Account are subject to certain limitations. In addition, sur- 
renders and transfers from the Fixed Account may be subject to a charge or fee (see Fixed Account Surrender Charge 
and Transfer Fee). The total amount you may transfer and/or surrender from the Fixed Account may not exceed your 
Fixed Account value. 
 
You may transfer amounts from the Fixed Account to the divisions before the annuitization date and as provided 
below. The transfer is effective on the valuation date following our receiving your instructions. You may transfer 
amounts by making either a scheduled or unscheduled Fixed Account transfer. You may not make both a scheduled 
and unscheduled Fixed Account transfer in the same contract year. 
 
Fixed Account Free Transaction Amount 
Each contract year, a certain portion of your Fixed Account value may be: 
 
  •  withdrawn free of the surrender charge; or 
  •  transferred to the Separate Account free of the transfer fee. 
 
The surrender charge and transfer fee do not apply to Fixed Account surrenders or transfers (or a combination of 
surrenders and transfers) which do not exceed the greater of: 
 
  •  your Fixed Account’s earnings (Fixed Account value minus unsurrendered/non-transferred Fixed Account 
    purchase payments still subject to a surrender charge or transfer fee); or 
  •  10% of your total Fixed Account value recalculated as of the later of the contract date or last contract 
    anniversary; or 
  •  an amount surrendered to satisfy the minimum distribution requirement of Section 401(a)9 of the Code, 
    provided that the amount surrendered does not exceed the minimum distribution amount which would have 
    been calculated based on the value of this Contract alone. 
In addition, 10% of Fixed Account purchase payments during the current Contract year may be surrendered without a 
surrender charge or transferred without a transfer fee. 


Any Fixed Account Free Transaction amount not withdrawn or transferred in a contract year is not added to the Fixed 
Account Free Transaction amount available for any following contract year(s). 
 
Unscheduled Fixed Account Transfer 
You may make an unscheduled transfer from the Fixed Account each contract year as follows: 
 
       •  The transfer is effective on the valuation date following our receiving your instructions. 
       •  You must specify the dollar amount or percentage to be transferred. 
       •  Amounts in excess of the Fixed Account Free Transaction Amount may be subject to a transfer fee. 
       •  You may transfer up to 100% of your Fixed Account value (without incurring the transfer fee) within 30 days 
  after a contract anniversary if: 
  •  your Fixed Account value is less than $1,000, or 
  •  the renewal interest rate for your Fixed Account value for the current contract year is more than one 
    percentage point lower than the weighted average of your Fixed Account interest rates for the preceding 
    contract year. 
If you do not meet one of the preceding conditions, transfers from the Fixed Account may be subject to a surrender 
charge (see Fixed Account Surrender Charge and Transfer Fee). 
 
Scheduled Fixed Account Transfer (Dollar Cost Averaging) 
You may make scheduled transfers on a periodic basis from the Fixed Account as follows: 
 
       •  You may establish scheduled transfers by: 
  •  mailing your instructions to us; 
  •  calling us at 1-800-852-4450 (if telephone privileges apply); 
  •  faxing your instructions to us at 1-866-894-2087; or 
  •  visiting www.principal.com. 
       •  Transfers occur on a date you specify (other than the 29th, 30th or 31st of any month). 
       •  If the selected date is not a valuation date, the transfer is completed on the next valuation date. 
       •  The minimum transfer amount is $50. 
       •  Transfers continue until your value in the Fixed Account is zero or we receive your notice to stop them. 
       •  If you stop the transfers, you may not start them again without our prior approval. 
 
GENERAL PROVISIONS 
 
The Contract 
 
The entire Contract is made up of the Contract, amendments, riders and endorsements and data pages. Only our cor- 
porate officers can agree to change or waive any provisions of a Contract. Any change or waiver must be in writing 
and signed by an officer of the Company. 
 
Delay of Payments 
 
Surrenders are generally made within seven days after we receive your instruction for a surrender in a form accept- 
able to us. This period may be shorter where required by law. However, payment of any amount upon total or partial 
surrender, death, annuitization of the accumulated value or the transfer to or from a division may be deferred during 
any period when the right to sell mutual fund shares is suspended as permitted under provisions of the Investment 
Company Act of 1940 (as amended). 
 
The right to sell shares may be suspended during any period when: 
 
       •  trading on the New York Stock Exchange is restricted as determined by the Commission or when the Exchange 
  is closed for other than weekends and holidays, or 
       •  an emergency exists, as determined by the Commission, as a result of which: 
  •  disposal by a mutual fund of securities owned by it is not reasonably practicable; 
  •  it is not reasonably practicable for a mutual fund to fairly determine the value of its net assets; or 
  •  the Commission permits suspension for the protection of security holders. 


If payments are delayed the transaction will be processed on the first valuation date following the expiration of the per- 
mitted delay unless we receive your written instructions to cancel your surrender, annuitization, or transfer. Your writ- 
ten instruction must be received in the home office prior to the expiration of the permitted delay. The transaction will be 
completed within seven business days thereafter. 
 
In addition, we reserve the right to defer payment of that portion of your accumulated value that is attributable to a pur- 
chase payment made by check for a reasonable period of time (not to exceed 15 business days) to allow the check to 
clear the banking system. 
 
We may also defer payment of surrender proceeds payable out of the Fixed Account for a period of up to six months. 
 
Misstatement of Age or Gender 
 
If the age or, where applicable, gender of the annuitant has been misstated, we adjust the income payable under your 
Contract to reflect the amount that would have been payable at the correct age and gender. If we make any overpay- 
ment because of incorrect information about age or gender, or any error or miscalculation, we deduct the overpayment 
from the next annuity benefit payment or annuity benefit payments due. Underpayments are added to the next annuity 
benefit payment. 
 
Assignment 
 
If your Contract is part of your qualified plan, IRA, SEP, or Simple-IRA, you may not assign ownership. 
 
You may assign your non-qualified Contract. Each assignment is subject to any payments made or action taken by the 
Company prior to our notification of the assignment. We assume no responsibility for the validity of any assignment. 
An assignment or pledge of a Contract may have adverse tax consequences. 
 
An assignment must be made in writing and filed with us at the home office. The irrevocable beneficiary(ies), if any, 
must authorize any assignment in writing. Your rights, as well as those of the annuitant and beneficiary, are subject to 
any assignment on file with us. Any amounts paid to an assignee are treated as a partial surrender and is paid in a sin- 
gle payment lump sum. 
 
Change of Owner 
 
If your Contract is part of your qualified plan, IRA, SEP, or SIMPLE-IRA, you may not change either the owner or the 
annuitant. 
 
You may change the owner of your non-qualified Contract at any time. Your request must be in writing and approved 
by us. After approval, the change is effective as of the date you signed the request for change. If ownership is 
changed, the Waiver of Fixed Account Surrender Charge rider is not available. 
 
If an annuitant who is not an owner dies while the Contract is in force, a new annuitant may be named unless the 
owner is a corporation, trust or other entity. 
 
Change of Annuitant 
 
If an annuitant who is not an owner dies while the Contract is in force, a new annuitant may be named unless the 
owner is a corporation, trust or other entity. If a new annuitant is not named within 60 days of our receiving notice 
(including proof) of the original annuitant’s death, you will become the annuitant. If the owner of the contract is not a 
natural person, the annuitant’s death is treated as the death of the owner. 
 
Change of Beneficiary 
 
Before the annuitization date, you have the right to name a beneficiary. This may be done as part of the application 
process or by sending us a written request. Unless you have named an irrevocable beneficiary, you may change your 
beneficiary designation by sending us a written request. A joint annuitant may not be named as a beneficiary. 


Contract Termination 
 
We reserve the right to terminate the Contract and make a single payment (without imposing any charges) to you if 
your accumulated value at the end of the accumulation period is less than $2,000. Before the Contract is terminated, 
we will send you a notice to increase the accumulated value to $2,000 within 60 days. Termination of the Contract will 
not unfairly discriminate against any owner. 
 
Important Information about Customer Identification Procedures 
 
To help the government fight the funding of terrorism and money laundering activities, Federal law requires financial 
institutions to obtain, verify, and record information that identifies each person who opens an account. When you open 
an account, we will ask for your name, address, date of birth, and other information that will allow us to verify your 
identity. We may also ask to see your driver’s license or other identifying documents. 
 
If concerns arise with verification of your identification, no transactions will be permitted while we attempt to reconcile 
the concerns. If we are unable to verify your identity within 30 days of our receipt of your initial purchase payment, the 
account(s) will be closed and redeemed in accordance with normal redemption procedures. 
 
Reports 
 
We will mail to you a statement of your current accumulated value, along with any reports required by state law, at 
least once per year prior to the annuitization date. After the annuitization date, any reports will be mailed to the person 
receiving the annuity benefit payments. 
 
Quarterly statements will reflect purchase payments and partial surrenders occurring during the quarter as well as the 
balance of units owned and accumulated values. 
 
RIGHTS RESERVED BY THE COMPANY 
 
We reserve the right to make certain changes if, in our judgement, they best serve the interests of you and the annu- 
itant or are appropriate in carrying out the purpose of the Contract. Any changes will be made only to the extent and in 
the manner permitted by applicable laws. Also, when required by law, we will obtain your approval of the changes and 
approval from any appropriate regulatory authority. Approvals may not be required in all cases. Examples of the 
changes the Company may make include: 
 
       •  transfer assets in any division to another division or to the Fixed Account; 
       •  add, combine or eliminate divisions in the Separate Account; or 
       •  substitute the units of a division for the units of another division: 
  •  if units of a division are no longer available for investment; or 
  •  if in our judgement, investment in a division becomes inappropriate considering the purposes of the 
    Separate Account. 
 
Frequent Trading and Market-Timing (Abusive Trading Practices) 
 
This Contract is not designed for frequent trading or market timing activity of the divisions. If you intend to trade fre- 
quently and/or use market timing investment strategies, you should not purchase this Contract. The Company does 
not accommodate market timing. 
 
We consider frequent trading and market timing activities to be abusive trading practices because they: 
 
       •  Disrupt the management of the underlying mutual funds by: 
  •  forcing the fund to hold short-term (liquid) assets rather than investing for long term growth, which results in 
    lost investment opportunities for the fund; and 
  •  causing unplanned portfolio turnover; 
       •  Hurt the portfolio performance of the underlying mutual funds; and 
       •  Increase expenses of the underlying mutual fund and separate account due to: 
  •  increased broker-dealer commissions; and 
  •  increased recordkeeping and related costs. 


If we are not able to identify such abusive trading practices, the abuses described above will negatively impact the 
Contract and cause investors to suffer the harms described. 
We have adopted policies and procedures to help us identify and prevent abusive trading practices. In addition, the 
underlying mutual funds monitor trading activity to identify and take action against abuses. While our policies and pro- 
cedures are designed to identify and protect against abusive trading practices, there can be no certainty that we will 
identify and prevent abusive trading in all instances. When we do identify abusive trading, we will apply our policies 
and procedures in a fair and uniform manner. 
If we, or an underlying mutual fund that is a division with the Contract, deem abusive trading practices to be occurring, 
we will take action that may include, but is not limited to: 
 
       •  Rejecting transfer instructions from a Contract owner or other person authorized by the owner to direct 
  transfers; 
       •  Restricting submission of transfer requests by, for example, allowing transfer requests to be submitted by 
  1st class U.S. mail only and disallowing requests made via the internet, by facsimile, by overnight courier or by 
  telephone; 
       •  Limiting the number of unscheduled transfers during a Contract year to no more than 12; 
       •  Prohibiting you from requesting a transfer among the divisions for a minimum of 30 days where there is 
  evidence of at least one round-trip transaction (exchange or redemption of shares that were purchased within 
  30 days of the exchange/redemption) by you; and 
       •  Taking such other action as directed by the underlying mutual fund. 
 
We will support the underlying mutual funds’ right to accept, reject or restrict, without prior written notice, any transfer 
requests into a fund. 
 
In some instances, a transfer may be completed prior to a determination of abusive trading. In those instances, we will 
reverse the transfer (within two business days of the transfer) and return the Contract to the investment option 
holdings it had prior to the transfer. We will give you notice in writing in this instance. 
 
PERFORMANCE CALCULATION 
The Separate Account may publish advertisements containing information (including graphs, charts, tables and 
examples) about the performance of one or more of its divisions. The Contract was not offered prior to April 30, 1999. 
However, shares of Accounts in which certain divisions of the Separate Account invest were offered prior to that date. 
The Separate Account may publish advertisements containing information about the hypothetical performance of one 
or more of its divisions for this Contract as if the Contract had been issued on or after the date the mutual fund in which 
the division invests was first offered. The hypothetical performance from the date of the inception of the mutual fund in 
which the division invests is calculated by reducing the actual performance of the underlying mutual fund by the fees 
and charges of this Contract as if it had been in existence. 
Other divisions of the Separate Account were not offered until April 30, 1999. Performance data for these divisions are 
calculated utilizing standardized performance formulas and shows performance since the inception date of the 
division. 
The yield and total return figures described below vary depending upon market conditions, composition of the 
underlying mutual fund’s portfolios and operating expenses. These factors and possible differences in the methods 
used in calculating yield and total return should be considered when comparing the Separate Account performance 
figures to performance figures published for other investment vehicles. The Separate Account may also quote 
rankings, yields or returns as published by independent statistical services or publishers and information regarding 
performance of certain market indices. Any performance data quoted for the Separate Account represents only 
historical performance and is not intended to indicate future performance. For further information on how the Separate 
Account calculates yield and total return figures, see the SAI. 
From time to time the Separate Account advertises its Money Market Division’s “ yield” and “ effective yield” for these 
Contracts. Both yield figures are based on historical earnings and are not intended to indicate future performance. The 
“ yield” of the division refers to the income generated by an investment in the division over a 7-day period (which period 
is stated in the advertisement). This income is then “ annualized.” That is, the amount of income generated by the 
investment during that week is assumed to be generated each week over a 52-week period and is shown as a 
percentage of the investment. The “ effective yield” is calculated similarly but, when annualized, the income earned by 
an investment in the division is assumed to be reinvested. The “ effective yield” is slightly higher than the “ yield” 
because of the compounding effect of the assumed reinvestment. 


The Separate Account also advertises the average annual total return of its various divisions. The average annual 
total return for any of the divisions is computed by calculating the average annual compounded rate of return over the 
stated period that would equate an initial $1,000 investment to the ending redeemable Contract value. 
FEDERAL TAX MATTERS 
 
The following description is a general summary of the tax rules, primarily related to federal income taxes, which in our 
opinion are currently in effect. These rules are based on laws, regulations and interpretations which are subject to 
change at any time. This summary is not comprehensive and is not intended as tax advice. Federal estate and gift tax 
considerations, as well as state and local taxes, may also be material. You should consult a qualified tax adviser about 
the tax implications of taking action under a Contract or related retirement plan. 
 
Non-Qualified Contracts 
Section 72 of the Internal Revenue Code governs the income taxation of annuities in general. 
       •  Purchase payments made under non-qualified Contracts are not excludable or deductible from your gross 
  income or any other person’s gross income. 
       •  An increase in the accumulated value of a non-qualified Contract owned by a natural person resulting from the 
  investment performance of the Separate Account or interest credited to the DCA Plus Accounts and the Fixed 
  Account is generally not taxable until paid out as surrender proceeds, death benefit proceeds, or otherwise. 
       •  Generally, owners who are not natural persons are immediately taxed on any increase in the accumulated 
  value. 
The following discussion applies generally to Contracts owned by natural persons. 
       •  Surrenders or partial surrenders are taxed as ordinary income to the extent of the accumulated income or gain 
  under the Contract. 
       •  The value of the Contract pledged or assigned is taxed as ordinary income to the same extent as a partial 
  surrender. 
       •  Annuity benefit payments: 
  •  The“ investment in the contract” is generally the total of the purchase payments made. 
  •  The basic rule for taxing annuity benefit payments is that part of each annuity benefit payment is considered 
    a nontaxable return of the investment in the contract and part is considered taxable income. An “ exclusion 
    ratio” is applied to each annuity benefit payment to determine how much of the payment is excludable from 
    gross income. The remainder of the annuity benefit payment is includable in gross income for the year 
    received. 
  •  After the purchase payment(s) in the Contract is paid out, the full amount of any annuity benefit payment is 
    taxable. 
For purposes of determining the amount of taxable income resulting from distributions, all Contracts and other annuity 
contracts issued by us or our affiliates to the same owner within the same calendar year are treated as if they are a 
single contract. 
 
Transfer of ownership may have tax consequences to the owner. Please consult with your tax advisor before changing 
ownership of your Contract. 
 
Required Distributions for Non-Qualified Contracts 
 
In order for a non-qualified Contract to be treated as an annuity contract for federal income tax purposes, the Internal 
Revenue Code requires: 
 
       •  If the person receiving payments dies on or after the annuitization date but prior to the time the entire interest in 
  the Contract has been distributed, the remaining portion of the interest is distributed at least as rapidly as under 
  the method of distribution being used as of the date of that person’s death. 
       •  If you die prior to the annuitization date, the entire interest in the Contract will be distributed: 
  •  within five years after the date of your death; or 
  •  as annuity benefit payments which begin within one year of your death and which are made over the life of 
    your designated beneficiary or over a period not extending beyond the life expectancy of that beneficiary. 
       •  If you take a distribution from the Contract before you are 59 1/2, you may incur an income tax penalty. 


Generally, unless the beneficiary elects otherwise, the above requirements are satisfied prior to the annuitization date 
by paying the death benefit in a single payment, subject to proof of your death. The beneficiary may elect, by written 
request, to receive an annuity benefit payment option instead of a single payment. 
 
If your designated beneficiary is your surviving spouse, the Contract may be continued with your spouse deemed to be 
the new owner for purposes of the Internal Revenue Code. Where the owner or other person receiving payments is 
not a natural person, the required distributions provided for in the Internal Revenue Code apply upon the death of the 
annuitant. 
 
IRA, SEP, and SIMPLE-IRA 
The Contract may be used to fund IRAs, SEPs, and SIMPLE-IRAs. 
•  IRA – An Individual Retirement Annuity (IRA) is a retirement savings annuity. Contributions grow tax deferred. 
•  SEP-IRA – A SEP is a form of IRA. A SEP allows you, as an employer, to provide retirement benefits for your 
  employees by contributing to their IRAs. 
•  SIMPLE-IRA – SIMPLE stands for Savings Incentive Match Plan for Employers. A SIMPLE-IRA allows employees 
  to save for retirement by deferring salary on a pre-tax basis and receiving predetermined company contributions. 
 
The tax rules applicable to owners, annuitants and other payees vary according to the type of plan and the terms and 
conditions of the plan itself. In general, purchase payments made under a retirement program recognized under the 
Internal Revenue Code are excluded from the participant’s gross income for tax purposes prior to the annuity benefit 
payment date (subject to applicable state law). The portion, if any, of any purchase payment made that is not excluded 
from their gross income is their investment in the Contract. Aggregate deferrals under all plans at the employee’s 
option may be subject to limitations. 
 
Tax-qualified retirement arrangements, such as IRAs, SEPs, and SIMPLE-IRAs, are tax-deferred. You derive 
no additional benefit from the tax deferral feature of the annuity. Consequently, an annuity should be used to fund 
an IRA, or other tax qualified retirement arrangement to benefit from the annuity’s features other than tax deferral. 
These features may include guaranteed lifetime income, death benefits without surrender charges, guaranteed caps 
on fees, and the ability to transfer among investment options without sales or withdrawal charges. 
 
The tax implications of these plans are further discussed in the SAI under the heading Taxation Under Certain Retire- 
ment Plans. Check with your tax advisor for the rules which apply to your specific situation. 
 
With respect to IRAs, IRA rollovers and SIMPLE-IRAs there is a 10% penalty under the Internal Revenue Code on the 
taxable portion of a “ premature distribution.” The tax is increased to 25% in the case of distributions from SIMPLE- 
IRAs during the first two years of participation. Generally, an amount is a “ premature distribution” unless the distribu- 
tion is:   
 
  •  made on or after you reach age 59 1/2; 
  •  made to a beneficiary on or after your death; 
  •  made upon your disability; 
  •  part of a series of substantially equal periodic payments for the life or life expectancy of you or you and the 
    beneficiary; 
  •  made to pay certain medical expenses; 
  •  for health insurance premiums while employed; 
  •  for first home purchases (up to $10,000); 
  •  for qualified higher education expenses; 
  •  for qualified disaster tax relief distributions (up to $100,000); or 
  •  for qualified reservist distributions. 
For more information regarding premature distributions, please consult your tax advisor. 


Rollover IRAs 
 
If you receive a lump-sum distribution from a qualified retirement plan, tax-sheltered annuity or governmental 457(b) 
plan, you may maintain the tax-deferred status of the distribution by rolling it over into an eligible retirement plan or 
IRA. You can accomplish this by electing a direct rollover from the plan, or you can receive the distribution and roll it 
over into an eligible retirement plan or IRA within 60 days. However, if you do not elect a direct rollover from the plan, 
the plan is required to withhold 20% of the distribution. This amount is sent to the IRS as income tax withholding to be 
credited against your taxes. Amounts received prior to age 59 1/2 and not rolled over may be subject to an additional 
10% excise tax. You may roll over amounts from a qualified plan directly to a Roth IRA. As part of this rollover, previ- 
ously taxed deferred funds from the qualified plan are converted to after-tax funds under a Roth IRA. Generally, the 
entire rollover is taxable (unless it includes after-tax dollars) and is included in gross income in the year of the rollover/ 
conversion. For rollovers/conversion to Roth IRAs done in 2010 only, the taxpayer does have a choice of electing a 
two-year spread option that allows deferral including the taxable amounts in gross income to years 2011 and 2012. 
For more information, please see your tax advisor. 
Required Minimum Distributions for IRAs 
The Required Minimum Distribution (RMD) regulations dictate when individuals must start taking payments from their 
IRA. Generally speaking, RMDs for IRAs must begin no later than April 1 following the close of the calendar year in 
which you turn 70 1/2. Thereafter, the RMD is required no later than December 31 of each calendar year. 
The RMD rules apply to traditional IRAs, as well as SEP-IRA’s and SIMPLE-IRAs, during the lifetime and after the 
death of IRA owners. They do not, however, apply to Roth IRAs during the lifetime of the Roth IRA owner. If an 
individual owns more than one IRA, the RMD amount must be determined for each, but the actual distribution can be 
satisfied from a combination of one or more of the owner’s IRAs. 
Failure to comply with the RMD rules can result in an excise tax penalty. This penalty equals 50% of the amount of the 
RMD that exceeds the actual distribution amount (if any) that occurred during the calendar year in question. 
Roth IRAs 
 
The Contract may be purchased to fund a Roth IRA. Contributions to a Roth IRA are not deductible from taxable 
income. Subject to certain limitations, a traditional IRA, SIMPLE-IRA or SEP may be converted into a Roth IRA or a 
distribution from such an arrangement may be rolled over to a Roth IRA. However, a conversion or a rollover to a Roth 
IRA is not excludable from gross income. If certain conditions are met, qualified distributions from a Roth IRA are tax- 
free. For more information, please contact your tax advisor. 
 
Withholding 
Annuity benefit payments and other amounts received under the Contract are subject to income tax withholding unless 
the recipient elects not to have taxes withheld. The amounts withheld vary among recipients depending on the tax 
status of the individual and the type of payments from which taxes are withheld. 
Notwithstanding the recipient’s election, withholding may be required on payments delivered outside the United 
States. Moreover, special “ backup withholding” rules may require us to disregard the recipient’s election if the recipient 
fails to supply us with a “ TIN” or taxpayer identification number (social security number for individuals), or if the Internal 
Revenue Service notifies us that the TIN provided by the recipient is incorrect. 
 
Mutual Fund Diversification 
The United States Treasury Department has adopted regulations under Section 817(h) of the Code which establish 
standards of diversification for the investments underlying the Contracts. Under this Code Section, Separate Account 
investments must be adequately diversified in order for the increase in the value of non-qualified Contracts to receive 
tax-deferred treatment. In order to be adequately diversified, the portfolio of each underlying mutual fund must, as of 
the end of each calendar quarter or within 30 days thereafter, have no more than 55% of its assets invested in any one 
investment, 70% in any two investments, 80% in any three investments and 90% in any four investments. Failure of a 
mutual fund to meet the diversification requirements could result in tax liability to non-qualified Contract holders. 
 
The investment opportunities of the mutual funds could conceivably be limited by adhering to the above diversification 
requirements. This would affect all owners, including owners of Contracts for whom diversification is not a requirement 
for tax-deferred treatment. 


STATE REGULATION 
 
The Company is subject to the laws of the State of Iowa governing insurance companies and to regulation by the 
Insurance Department of the State of Iowa. An annual statement in a prescribed form must be filed by March 1 in each 
year covering our operations for the preceding year and our financial condition on December 31 of the prior year. Our 
books and assets are subject to examination by the Commissioner of Insurance of the State of Iowa, or the 
Commissioner’s representatives, at all times. A full examination of our operations is conducted periodically by the 
National Association of Insurance Commissioners. Iowa law and regulations also prescribe permissible investments, 
but this does not involve supervision of the investment management or policy of the Company. 
 
In addition, we are subject to the insurance laws and regulations of other states and jurisdictions where we are 
licensed to operate. Generally, the insurance departments of these states and jurisdictions apply the laws of the state 
of domicile in determining the field of permissible investments. 
 
GENERAL INFORMATION 
 
Reservation Rights 
 
The Company reserves the right to: 
 
       •  increase the minimum amount for each purchase payment to not more than $1,000; and 
       •  terminate a Contract and distribute the accumulated value if no purchase payments are made during two 
  consecutive calendar years and the accumulated value (or total purchase payments less partial surrenders and 
  applicable surrender charges and transfer fees) is less than $2,000. The Company will first notify you of its 
  intent to exercise this right and give you 60 days to increase the accumulated value to at least $2,000. 
 
Legal Opinions 
 
Legal matters applicable to the issue and sale of the Contracts, including our right to issue Contracts under Iowa Insur- 
ance Law, have been passed upon by Karen Shaff, General Counsel and Executive Vice President. 
 
Legal Proceedings 
 
There are no legal proceedings pending to which Separate Account B is a party or which would materially affect Sep- 
arate Account B. 
 
Other Variable Annuity Contracts 
 
The Company currently offers other variable annuity contracts that participate in Separate Account B. In the future, we 
may designate additional group or individual variable annuity contracts as participating in Separate Account B. 
 
Householding 
 
To avoid sending duplicate copies of materials to owners, only one copy of the prospectus and annual and semi- 
annual reports for the funds will be mailed to owners having the same name and address on our records. The consoli- 
dation of these mailings, called householding, benefits us through reduced mailing expense. If you want to receive 
multiple copies of these materials, you may call us at 1-800-852-4450. You may also notify us in writing. Individual 
copies of prospectuses and reports will be sent to you within thirty (30) days after we receive your request to stop 
householding. 


Payments to Financial Intermediaries 
 
The Company pays compensation to broker-dealers, financial institutions, and other parties (“ Financial 
Intermediaries” ) for the sale of the Contract according to schedules in the sales agreements and other agreements 
reached between the Company and the Financial Intermediaries. Such compensation generally consists of 
commissions on purchase payments made on the Contract. The Company and/or its affiliates may also pay other 
amounts (“ Additional Payments” ) that include, but are not limited to, marketing allowances, expense reimbursements, 
and educational payments. These Additional Payments are designed to provide incentives for the sale of the 
Contracts as well as other products sold by the Company and may influence the Financial intermediary or its 
registered representative to recommend the purchase of this Contract over competing annuity contracts or other 
investment options. You may ask your registered representative about these differing and divergent interests, how 
your registered representative is personally compensated, and how your sales representative’s broker-dealer is 
compensated for soliciting applications for the Contract. 
 
Service Arrangements and Compensation 
 
The Company has entered into agreements with the distributors, advisers, and/or the affiliates of some of the mutual 
funds underlying the Contract and receives compensation for providing certain services including, but not limited to, 
distribution and operational support services, to the underlying mutual fund. Fees for these services are paid 
periodically (typically, quarterly or monthly) based on the average daily net asset value of shares of each fund held by 
the Separate Account and purchased at the Contract owners’ instructions. Because the Company receives such fees, 
it may be subject to competing interests in making these funds available as investment options under the Contract. 
The Company takes into consideration the anticipated payments from underlying mutual funds when it determines the 
charges assessed under the Contract. Without these payments, charges under the Contract are expected to be 
higher. 
 
Independent Registered Public Accounting Firm 
 
The financial statements of Principal Life Insurance Company Separate Account B and the consolidated financial 
statements of Principal Life Insurance Company are included in the SAI. Those statements have been audited by 
Ernst and Young LLP, independent registered public accounting firm, for the periods indicated in their reports which 
also appear in the SAI. 
 
FINANCIAL STATEMENTS 
 
The financial statements of the Principal Life Insurance Company which are included in the SAI should be considered 
only as they relate to our ability to meet our obligations under the Contract. They do not relate to investment 
performance of the assets held in the Separate Account. 


TABLE OF SEPARATE ACCOUNT DIVISIONS 
The following is a brief summary of the investment objectives of each division. There is no guarantee that the objec- 
tives will be met.   
 
American Century VP Income & Growth Division 
                                                       Invests in:  American Century VP Income & Growth Fund- Class II 
Investment Advisor:  American Century Investment Management, Inc. 
                         Investment Objective:  to seek dividend growth, current income and appreciation. The account will 
  seek to achieve its investment objective by investing in common stocks. 
 
Bond & Mortgage Securities Division 
                                                       Invests in:  Principal Variable Contracts Funds Bond & Mortgage Securities Account — 
  Class 1 
                               Investment Advisor:  Principal Global Investors, LLC through a sub-advisory agreement with 
  Principal Management Corporation 
                           Investment Objective:  seeks to provide current income. 
 
Diversified International Division   
                                                         Invests in:   Principal Variable Contracts Funds Diversified International Account - Class 1 
Investment Advisor:   Principal Global Investors, LLC through a sub-advisory agreement with 
   Principal Management Corporation 
Investment Objective:   seeks long-term growth of capital. 
 
Government & High Quality Bond Division (will merge into Mortgage Securities effective July 16, 2002) 
                                                         Invests in:   Principal Variable Contracts Funds Government & High Quality Bond Account - 
   Class 1(will merge into the Principal Variable Contracts Funds Mortgage Secu- 
   rities Account - Class 1 effective July 16, 2010) 
Investment Advisor:   Principal Global Investors, LLC through a sub-advisory agreement with 
   Principal Management Corporation 
Investment Objective:   to seek a high level of current income, liquidity and safety of principal. 


LargeCap Growth I Division   
Invests in:  Principal Variable Contracts Funds LargeCap Growth Account I - Class 1 
Investment Advisor:  T. Rowe Price Associates through a sub-advisory agreement and Brown 
  Investment, LLC through a Sub-advisory agreement with Principal Manage- 
  ment Corporation 
Investment Objective:  seeks long-term growth of capital. 
 
LargeCap S&P 500 Index Division   
Invests in:  Principal Variable Contracts Funds LargeCap S&P 500 Index Account - Class 1 
Investment Advisor:  Principal Global Investors, LLC through a sub-advisory agreement with Princi- 
  pal Management Corporation 
Investment Objective:  to seek long-term growth of capital by investing in stocks of large U.S. compa- 
  nies. The Account attempts to mirror the investment results of the Standard & 
  Poor’s 500 Index. 
 
LargeCap Value Division   
Invests in:  Principal Variable Contracts Funds LargeCap Value Account - Class 1 
Investment Advisor:  Principal Global Investors, LLC through a sub-advisory agreement with Princi- 
  pal Management Corporation 
Investment Objective:  seeks long-term growth of capital. 
 
MidCap Blend Division   
Invests in:  Principal Variable Contracts Funds MidCap Blend Account - Class 1 
Investment Advisor:  Principal Global Investors, LLC through a sub-advisory agreement with 
  Principal Management Corporation 
Investment Objective:  seeks long-term growth of capital. 


MidCap Growth I Division (will merge into the MidCap Blend effective July 16, 2010) 
Invests in:  Principal Variable Contracts Funds MidCap Growth Account I - Class 1 (will 
  merge into the Principal Variable Contracts Funds MidCap Blend Account - 
  Class 1 effective July 16, 2010) 
Investment Advisor:  Mellon Capital Management Corporation through a sub-advisory agreement 
                                                                         with Principal Management Corporation
Investment Objective:  to seek long-term growth of capital. The Account will attempt to achieve its 
  objective by investing primarily in growth stocks of medium market 
  capitalization companies. 
 
MidCap Value II Division (will merge into the MidCap Blend effective July 16, 2010) 
Invests in:  Principal Variable Contracts Funds MidCap Value Account II - Class 1(will 
  merge into the Principal Variable Contracts Funds MidCap Blend Account - 
  Class 1 effective July 16, 2010) 
Investment Advisor:  Jacobs Levy Equity Management, Inc. through a sub-advisory agreement with 
  Principal Management Corporation 
Investment Objective:  to seek long-term growth of capital by investing primarily in equity securities of 
  companies with value characteristics and medium market capitalizations. 
 
Money Market Division   
Invests in:  Principal Variable Contracts Funds Money Market Account - Class 1 
Investment Advisor:  Principal Global Investors, LLC through a sub-advisory agreement with 
  Principal Management Corporation 
Investment Objective:  to seek as high a level of current income as is considered consistent with pres- 
  ervation of principal and maintenance if liquidity. 


Mortgage Securities Division (division name will change to the Government & High Quality Bond Division 
effective July 16, 2010)     
                             Invests in:  Principal Variable Contracts Funds Mortgage Securities Account - Class 1(fund name will 
  change to Principal Variable Contracts Funds Government & High Quality Bond Account 
  effective July 16, 2010) 
Investment Advisor:  Edge Asset Management, Inc. through a sub-advisory agreement with Principal 
  Management Corporation 
Investment Objective:  seeks to provide a high level of current income consistent with safety and liquidity. 
 
Short-Term Bond Division (will merge into the Short-Term Income Division effective July 16, 2010) 
                                                     Invests in:  Principal Variable Contracts Funds Short-Term Bond Account - Class 1 (will 
    merge into the Principal Variable Contracts Funds Short-Term Income Account 
    - Class 1 effective July 1, 2010) 
                             Investment Advisor:  Principal Global Investors, LLC through a sub-advisory agreement with 
    Principal Management Corporation 
                         Investment Objective:  to provide current income. 
 
Short-Term Income Division   
                             Invests in:  Principal Variable Contracts Funds Short-Term Income Account - Class 1 
Investment Advisor:  Edge Asset Management, Inc. through a sub-advisory agreement with Principal 
  Management Corporation 
Investment Objective:  seeks to provide as high a level of current income as is consistent with prudent investment 
  management and stability of principal. 
 
SmallCap Blend Division     
                                                     Invests in:  Principal Variable Contracts Funds SmallCap Blend Account - Class 1 
                             Investment Advisor: Principal Global Investors, LLC through a sub-advisory agreement with 
    Principal Management Corporation 
                         Investment Objective:  to seek long-term growth of capital. 


SmallCap Growth II Division   
Invests in:  Principal Variable Contracts Funds SmallCap Growth Account II - Class 1 
Investment Advisor:  Emerald Advisors, Inc. through a sub-advisory agreement and Essex Invest- 
  ment Management Company, LLC through a sub-advisory agreement with 
  Principal Management Corporation 
Investment Objective:  to seek long-term growth of capital. The Account will attempt to achieve its 
  objective by investing primarily in equity securities of growth companies with 
  comparatively smaller market capitalizations. 
 
Templeton Growth Securities Division 
Invests in:  Franklin Templeton VIP Trust Templeton Growth Securities Fund - Class 2 
Investment Advisor:  Templeton Global Advisors Limited 
Investment Objective:  seeks long-term capital growth. The Fund normally invests primarily in equity 
  securities of companies located anywhere in the world, including those in the 
  U.S. and in emerging markets. 


Registration Statement 
 
This prospectus (Part A of the registration statement) omits some information contained in the SAI (Part B of the regis- 
tration statement) and Part C of the registration statement which the Company has filed with the SEC. The SAI is 
hereby Incorporated by reference into this prospectus. You may request a free copy of the SAI by contacting your reg- 
istered representative or calling us at 1-800-852-4450. 
 
Information about the Contract (Including the SAI and Part C of the registration statement) can be reviewed and cop- 
ied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the 
operation of the public reference room may be obtained by calling the Commission as 202-942-8090. Reports and 
other information about the Contract are available on the Commission’s internet site at http://www.sec.gov. Copies of 
this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the 
Commission, 100 F Street NE, Washington, D.C. 20549-0102. 
 
The registration number for the Contract is 333-63401. 
 
Customer Inquiries 
Your questions should be directed to: Principal Freedom Variable Annuity, Principal Financial Group, P.O. Box 9382, 
Des Moines, Iowa 50306-9382, 1-800-852-4450. 
 
TABLE OF CONTENTS OF THE SAI 

The table of contents for the Statement of Additional Information is provided below.   
                                                                                                                   TABLE OF CONTENTS   
General Information and History  3 
Independent Registered Public Accounting Firm  3 
Principal Underwriter  3 
Calculation of Performance Data  3 
Taxation Under Certain Retirement Plans  5 
Principal Life Insurance Company Separate Account B   
   Report of Independent Registered Public Accounting Firm  9 
   Financial Statements  10 
Principal Life Insurance Company   
   Report of Independent Auditors  149 
   Consolidated Financial Statements  150 

To obtain a copy of the Statement of Additional Information, free of charge, write or telephone: 
 
Princor Financial Services Corporation 
a company of 
the Principal Financial Group 
Des Moines, IA 50392-2080 
Telephone: 1-800-852-4450 


CONDENSED FINANCIAL INFORMATION 
 
Financial statements are included in the Statement of Additional Information. Following are unit values for the Contract 
for the periods ended December 31. 

                 Accumulation Unit Value
        Number of 
        Accumulation 
        Units 
      Percentage  Outstanding 
  Beginning  End of  Change from  End of Period 
 Division  of Period  Period  Prior Period  (in thousands) 
American Century VP Income & Growth         
       2009  $7.956  $9.316  17.09%  340 
       2008  12.267  7.956  -35.14  399 
       2007  12.380  12.267  -0.91  517 
       2006  10.663  12.380  16.10  579 
       2005  10.278  10.663  3.75  567 
       2004  9.174  10.278  12.03  517 
       2003  7.153  9.174  28.25  342 
       2002  8.947  7.153  -20.05  252 
       2001  9.846  8.947  -9.13  171 
       2000  11.110  9.846  -11.38  134 
Bond & Mortgage Securities         
       2009  11.606  13.915  19.89  549 
       2008  14.114  11.606  -17.77  684 
       2007  13.766  14.114  2.53  957 
       2006  13.267  13.766  3.76  1,099 
       2005  13.053  13.267  1.64  1,078 
       2004  12.541  13.053  4.08  953 
       2003  12.093  12.541  3.70  646 
       2002  11.163  12.093  8.33  534 
       2001  10.412  11.163  7.21  301 
       2000  9.708  10.412  7.25  199 
Diversified International         
       2009  9.985  12.759  27.78  333 
       2008  18.724  9.985  -46.67  382 
       2007  16.267  18.724  15.10  495 
       2006  12.820  16.267  26.89  575 
       2005  10.445  12.820  22.74  464 
       2004  8.703  10.445  20.02  324 
       2003  6.633  8.703  31.21  144 
       2002  7.971  6.633  -16.79  102 
       2001  10.616  7.971  -24.92  80 
       2000  11.681  10.616  -9.12  86 


   Accumulation Unit Value
        Number of 
        Accumulation 
        Units 
      Percentage  Outstanding 
  Beginning  End of  Change from  End of Period 
 Division  of Period  Period  Prior Period  (in thousands) 
Government & High Quality Bond         
       2009  10.821  11.298  4.41  332 
       2008  11.095  10.821  -2.47  420 
       2007  10.668  11.095  4.00  603 
       2006  10.322  10.668  3.35  709 
       2005  10.205  10.322  1.15  710 
       2004  9.938  10.205  2.69  546 
       2003(1)  10.000  9.938  -0.62  198 
LargeCap Growth I         
       2009  5.978  9.052  51.42  184 
       2008  10.151  5.978  -41.11  197 
       2007  10.000  10.151  1.51   
LargeCap S&P 500 Index         
       2009  7.089  8.878  25.24  1,017 
       2008  11.366  7.089  -37.63  1,217 
       2007  10.903  11.366  4.25  1,603 
       2006  9.514  10.903  14.60  1,844 
       2005  9.184  9.514  3.59  1,862 
       2004  8.391  9.184  9.45  1,780 
       2003  6.595  8.391  27.23  1,074 
       2002  8.576  6.595  -23.10  636 
       2001  9.840  8.576  -12.85  475 
       2000  10.985  9.840  -10.42  431 
LargeCap Value         
       2009  7.799  8.994  15.32  338 
       2008  12.132  7.799  -35.72  388 
       2007  12.248  12.132  -0.95  546 
       2006  10.298  12.248  18.94  652 
       2005  9.724  10.298  5.90  572 
       2004  8.728  9.274  11.41  487 
       2003  7.014  8.728  24.44  251 
       2002  8.194  7.014  -14.40  201 
       2001  8.987  8.194  -8.82  180 
       2000  8.872  8.987  1.30  178 
MidCap Blend         
       2009  14.400  19.099  32.63  180 
       2008  21.980  14.400  -34.49  203 
       2007  20.255  21.980  8.52  271 
       2006  17.883  20.255  13.26  322 
       2005  16.515  17.883  8.28  344 
       2004  14.144  16.515  16.76  287 
       2003  10.741  14.144  31.68  146 
       2002  11.871  10.741  -9.52  84 
       2001  12.435  11.871  -4.54  63 
       2000  10.944  12.435  13.62  41 


    Accumulation Unit Value
          Number of 
          Accumulation 
          Units 
        Percentage  Outstanding 
    Beginning  End of  Change from  End of Period 
  Division  of Period  Period  Prior Period  (in thousands) 
MidCap Growth I           
       2009    8.847  11.856  34.01  81 
       2008    15.159  8.847  -41.64  87 
       2007    13.801  15.159  9.84  116 
       2006    12.694  13.801  8.72  140 
       2005    11.258  12.694  12.76  150 
       2004    10.154  11.258  10.87  138 
       2003    7.285  10.154  39.38  91 
       2002    9.964  7.285  -26.89  66 
       2001    12.096  9.964  -17.63  63 
       2000    11.285  12.096  7.19  31 
MidCap Value II           
       2009    13.875  18.453  32.99  223 
       2008    24.953  13.875  -44.40  270 
       2007    25.431  24.953  -1.88  354 
       2006    22.641  25.431  12.32  420 
       2005    20.655  22.642  9.62  407 
       2004    16.982  20.655  21.63  326 
       2003    12.548  16.982  35.34  176 
       2002    14.055  12.548  -10.72  123 
       2001    14.552  14.055  -3.42  64 
       2000    11.200  14.552  29.93  32 
Money Market           
       2009    12.489  12.411  -0.62  351 
       2008    12.279  12.489  1.71  565 
       2007    11.807  12.279  4.00  478 
       2006    11.381  11.807  3.74  526 
       2005    11.180  11.381  1.80  502 
       2004    11.173  11.180  0.06  538 
       2003    11.187  11.173  -0.13  496 
       2002    11.125  11.187  0.56  317 
       2001    10.796  11.125  3.05  140 
       2000    10.270  10.796  5.12  87 
Mortgage Securities           
       2009    10.099  10.661  5.56  12 
       2008(3)    10.000  10.099  0.99  -- 
Short-Term Bond           
       2009    9.382  10.253  9.28  245 
       2008    10.713  9.382  -12.42  287 
       2007    10.484  10.713  2.18  435 
       2006    10.123  10.484  3.57  491 
       2005    10.029  10.123  0.94  487 
       2004    9.985  10.029  0.44  403 
       2003(1)    10.000  9.985  -0.15  117 


    Accumulation Unit Value
          Number of 
          Accumulation 
          Units 
        Percentage  Outstanding 
    Beginning  End of  Change from  End of Period 
Division  of Period  Period  Prior Period  (in thousands) 
Short-Term Income           
       2009    9.991  10.891  9.01  9 
       2008(3)    10.000  9.991  -0.09  -- 
SmallCap Blend           
       2009    10.687  12.947  21.15  229 
       2008    17.037  10.687  -37.27  257 
       2007    16.905  17.037  0.78  341 
       2006    15.127  16.905  11.75  402 
       2005    14.253  15.127  6.13  427 
       2004    11.996  14.253  18.81  339 
       2003    8.843  11.996  35.66  182 
       2002    12.272  8.843  -27.94  122 
       2001    12.069  12.272  1.68  73 
       2000    13.789  12.069  -12.47  65 
SmallCap Growth II           
       2009    5.869  7.666  30.62  105 
       2008    10.058  5.869  -41.65  116 
       2007    9.661  10.058  4.11  140 
       2006    8.941  9.661  8.05  160 
       2005    8.454  8.941  5.76  161 
       2004    7.664  8.454  10.31  173 
       2003    5.307  7.664  44.41  116 
       2002    9.885  5.307  -46.31  64 
       2001    14.663  9.885  -32.59  37 
       2000    17.178  14.663  -14.64  35 
Templeton Growth Securities           
       2009    11.006  14.307  29.99  92 
       2008    19.245  11.006  -42.81  105 
       2007    18.965  19.245  1.48  138 
       2006    15.702  18.965  20.78  160 
       2005    14.547  15.702  7.94  146 
       2004    12.645  14.547  15.04  127 
       2003    9.651  12.645  31.02  94 
       2002    11.941  9.651  -19.18  85 
       2001    12.204  11.941  -2.16  57 
       2000    11.485  12.204  6.26  42 

(1)  Commenced Operations on May 16, 2003 
(2)  Commenced Operations on April 30, 2007 
(3)  Commenced Operations on November 24, 2008