<PAGE>
                                                                     EXHIBIT 4.8


MTN GLOBAL FUNDING AGREEMENT

Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0001
(515) 247-5111

In consideration of the payment made by, or at the direction of,

                     PRINCIPAL LIFE INCOME FUNDINGS TRUST o

                            (the "Agreement Holder")

of the Net Deposit, as described below, Principal Life Insurance Company
("Principal Life") agrees to make payments to the person or persons entitled to
them, subject to the provisions of this funding agreement (this "Agreement").

This Agreement is delivered in and subject to the laws of the State of Iowa.

This Agreement is issued and accepted subject to all the terms set out in it.

This Agreement is executed by Principal Life at its Corporate Center to take
effect as of the o day of o, 200o, which is referred to as the Effective Date,
subject to the receipt by Principal Life or its designee of the Net Deposit (as
set forth in Section 1).


                              --------------------
                                    Registrar


                              --------------------
                                      Date


                         GLOBAL FUNDING AGREEMENT NO. o

                 RESTRICTIONS REGARDING THE TRANSFER OR SALE OF
       THIS FUNDING AGREEMENT OR ANY INTEREST HEREIN ARE SET FORTH HEREIN

<PAGE>

FUNDING AGREEMENT                                                          NO. o

         This Agreement is issued in connection with the issuance by the Trust
(specified in the Annex) of Secured Notes (the "Notes") which are identified in
the annex hereto (the "Annex") and which are being issued by the Trust pursuant
to the Prospectus dated o, the Prospectus Supplement dated o, as from time to
time amended or supplemented, and the Pricing Supplement applicable to the Notes
(the "Pricing Supplement"). Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Notes. Where used in this Agreement,
the term "Notes" shall mean the Notes secured by this Agreement as the same
exist on the Effective Date, without giving effect to any amendments or
modifications to said Notes effected or made after any such Effective Date
unless such amendments or modifications to said Notes have been consented to in
writing by Principal Life.

1.       DEPOSIT

         Principal Life agrees to accept, and the Agreement Holder agrees to pay
         or cause to be paid to Principal Life, for value on the Effective Date,
         the Net Deposit (as specified in the Annex). All funds received by
         Principal Life under this Agreement shall become the exclusive property
         of Principal Life and remain a part of Principal Life's general account
         without any duty or requirement of segregation or separate investment.

         This Agreement shall become effective only upon the receipt by
         Principal Life or its designee of the Net Deposit.

2.       FUND

         Upon receipt of the Net Deposit, Principal Life will establish, under
         this Agreement, a bookkeeping account in the name of the Agreement
         Holder, which will evidence Principal Life's obligations under this
         Agreement.

         The Deposit deemed received (as specified in the Annex), (i) less any
         withdrawals to make payments hereunder and (ii) plus any interest
         accrued and premium, if any, pursuant to Section 7, will be referred to
         as the "Fund".

         Principal Life is neither a trustee nor a fiduciary with respect to the
         Fund.

3.       PURCHASE OF NOTES BY PRINCIPAL LIFE.

         Principal Life may purchase some or all of the Notes in the open market
         or otherwise at any time, and from time to time. Simultaneously, upon
         such purchase, (1) the purchased Notes shall, by their terms become
         mandatorily redeemable by the Trust as specified in the related Pricing
         Supplement, Prospectus Supplement and/or Prospectus and (2) the Fund
         under this Agreement shall be permanently reduced by the same
         percentage as the principal amount of the Notes so redeemed bears to
         the sum of (i) the aggregate principal amount of all Notes issued and
         outstanding immediately prior to such redemption and (ii) the principal
         amount of the Trust Beneficial Interest related to such Notes. If
         Principal Life, in its sole discretion, engages in such open market or
         other purchases, then the Trust, the Indenture Trustee in respect of
         such Notes, and Principal Life shall take

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         such actions (including, in the case of Principal Life, making the
         payment(s) necessary to effect the Trust's redemption of such Notes) as
         may be necessary or desirable to effect the cancellation of such Notes
         by the Trust.

4.       ENTIRE AGREEMENT

         This Agreement and the Annex attached hereto constitute the entire
         Agreement.

5.       REPRESENTATIONS

         (a)      Each party hereto represents and warrants to the other that as
                  of the date hereof:

                  (i)      it has the power to enter into this Agreement and to
                           consummate the transactions contemplated hereby;

                  (ii)     this Agreement has been duly authorized, executed and
                           delivered, this Agreement constitutes a legal, valid
                           and binding obligation of each party hereto, and this
                           Agreement is enforceable in accordance with the terms
                           hereof, subject to applicable bankruptcy, insolvency
                           and similar laws affecting creditors' rights, and
                           subject as to enforceability to general principles of
                           equity, regardless of whether enforcement is sought
                           in a proceeding in equity or at law; and

                  (iii)    the execution and delivery of this Agreement and the
                           performance of obligations hereunder do not and will
                           not constitute or result in a default, breach or
                           violation of the terms or provisions of its
                           certificate, articles or charter of incorporation,
                           declaration of trust, by-laws or any agreement,
                           instrument, mortgage, judgment, injunction or order
                           applicable to it or any of its property.

         (b)      The Trust further represents and warrants to Principal Life
                  that:

                  (i)      it is a person other than a natural person and is
                           purchasing this Agreement for the purpose of
                           providing collateral security for securities
                           registered with the United States Securities and
                           Exchange Commission;

                  (ii)     it has been informed and understands that transfer is
                           restricted by the terms of this Agreement; and

                  (iii)    it (a) is solely responsible for determining whether
                           this Agreement is suitable for the purpose intended;
                           (b) has carefully read this Agreement (including the
                           Annex) before signing this Agreement; (c) has had a
                           reasonable opportunity to make such inquiries as it
                           deemed necessary prior to signing this Agreement; and
                           (d) has received or had access to such additional
                           information as it deemed necessary in connection with
                           its decision to sign this Agreement.

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         In performing its obligations hereunder Principal Life is not acting as
         a fiduciary, agent or other representative for the Agreement Holder or
         anyone else. All representations and warranties made by the Agreement
         Holder and Principal Life in this Agreement shall be considered to have
         been relied upon by the other in connection with the execution hereof.

6.       ASSIGNMENT OF AGREEMENT

         The following conditions must be satisfied in order to effectuate any
         assignment of this Agreement:

         (i)      This Agreement may only be transferred through a book entry
                  system maintained by Principal Life, or an agent designated by
                  it, within the meaning of Temporary Treasury Regulations
                  Section 5f.103-1(c) and Treasury Regulations Section
                  1.871-14(c)(1)(i).

         (ii)     The Agreement Holder, and any assignee, must comply with
                  applicable securities laws.

         (iii)    Principal Life has consented in writing to the proposed
                  assignment, such consent not to be unreasonably withheld.

         (iv)     Principal Life shall have received from the proposed assignee
                  a duly executed certificate containing, in substance, the
                  information, representations, warranties, acknowledgments and
                  agreements set forth in this Agreement.

         Any attempted sale, transfer, anticipation, assignment, hypothecation,
         or alienation not in accordance with this Section 6 shall be void and
         of no effect. Until such time, if any, as Principal Life has consented
         in writing to a proposed assignment, Principal Life shall not be
         obligated to make any payments to or at the direction of anyone other
         than the person shown on Principal Life's books and records as the
         Agreement Holder. Once the foregoing conditions have been satisfied
         with respect to an assignment, the assignee or its successor shall be
         deemed to be the sole Agreement Holder for all purposes of this
         Agreement and Principal Life shall promptly amend its records to
         reflect the assignee's status as Agreement Holder.

7.       PAYMENTS TO THE AGREEMENT HOLDER

         Principal Life shall pay to, or at the direction of, the Agreement
         Holder by the date (the "Due Date") on which any payment becomes due in
         respect of the Notes secured by this Agreement (and in any event such
         period of time prior to the Due Date as shall be necessary to ensure
         that the Trust can fulfill its obligation to make payment in full of
         all amounts due and payable under the Notes on the Due Date), an amount
         in the currency or currencies in which the Notes are denominated as
         specified in the Notes equal to the sum of (i) the amount of principal
         and/or (as the case may be) interest and/or (as the case may be)
         premium falling due in respect of the Notes on such Due Date (the
         "Notes Component") and (ii) the amount of any payments owed by the
         Trust in respect of the Trust Beneficial Interest falling due on such
         date (the "Beneficial Interest Component"). In the event that Principal
         Life fails to make payment of any such amount on or prior to

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         the Due Date, Principal Life shall pay to or at the direction of the
         Agreement Holder, on demand by the Agreement Holder, (i) if the failure
         relates to the Notes Component, an amount in the currency specified in
         the Notes equal to the amount of default interest (or other amount)
         which becomes due and payable by the Trust in accordance with the Notes
         as a consequence of any delay in the Trust making the relevant payment
         of principal, interest or premium (as the case may be) to the holders
         of the of Notes and (ii) if the failure relates to the Beneficial
         Interest Component, such amount or default interest, if any, determined
         in the same manner as default interest on the Notes Component.

         Interest shall accrue on the Fund in the same amount and pursuant to
         the same terms as interest accrues on the Notes secured by this
         Agreement and on the Trust Beneficial Interest related to the Notes.

         If any amount is withdrawn from the Fund in order to make a payment
         under this Section 7, interest will cease to be credited with regard to
         such amount as of the end of the day immediately preceding the date on
         which such withdrawal is made.

         All payments made by Principal Life to the Agreement Holder hereunder
         shall be paid in same-day, freely transferable funds to such account as
         has been specified for such purpose by the Agreement Holder.

         Notwithstanding anything to the contrary in this Section 7, if
         Principal Life shall, with respect to any scheduled amount due and
         payable under any of the Notes, comply in all respects with the
         requirements of this Section 7, but an event of default has occurred
         with respect to the Notes and as a result payments with respect to the
         Notes have been accelerated, otherwise than by reason of any default
         under this Agreement by Principal Life, no Event of Default (as defined
         below) under this Funding Agreement shall be deemed to have occurred,
         no payments with respect to this Agreement shall be accelerated and
         Principal Life will remain obligated to make payments under this
         Agreement as if no event of default had occurred with respect to the
         Notes.

8.       TERMINATION OF AGREEMENT

         Subject to the provisions of the following paragraph and the Annex,
         this Agreement shall terminate and cease to be of any further force or
         effect on the day and at the time upon which all amounts have been
         withdrawn from the Fund pursuant to this Agreement.

         Upon the occurrence of any of the following events (each, an "Event of
         Default") and following a written demand by the Agreement Holder,
         Principal Life shall pay to, or at the direction of, the Agreement
         Holder all amounts that the Trust is required to pay in such event
         under the Notes and the Trust Beneficial Interest:

         (i)      Principal Life's failure to make any payment of interest,
                  premium (if applicable) or installment payments (if
                  applicable) in accordance with this Agreement, if such failure
                  to pay is not corrected within seven (7) Business Days after
                  such payment becomes due and payable; or

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         (ii)     Principal Life's failure to make any payment of principal
                  (other than any installment payment) in accordance with this
                  Agreement, if such failure to pay is not corrected within one
                  (1) Business Day after such payment becomes due and payable;
                  or

         (iii)    if Principal Life (a) is dissolved (other than pursuant to a
                  consolidation, amalgamation or merger in which the resulting
                  entity assumes its obligations); (b) becomes insolvent or is
                  unable to pay its debts or fails or admits in writing its
                  inability generally to pay its debts as they become due; (c)
                  makes a general assignment, arrangement or composition with or
                  for the benefit of its creditors; (d) institutes or has
                  instituted against it an administrative or legal proceeding
                  seeking a judgment of insolvency or bankruptcy or any other
                  relief under any supervision, rehabilitation, liquidation,
                  bankruptcy or insolvency law or other similar law affecting
                  creditors' rights, or a petition is presented for its
                  winding-up or liquidation, and, in the case of any such
                  proceeding or petition instituted or presented against it,
                  such proceeding or petition (1) results in a judgment of
                  insolvency or bankruptcy or the entry of an order for relief
                  or the making of an order for its rehabilitation, winding-up
                  or liquidation or (2) is not dismissed, discharged, stayed or
                  restrained in each case within 60 days of the institution or
                  presentation thereof; (e) has a resolution passed for its
                  rehabilitation, winding-up, official management or liquidation
                  (other than pursuant to a consolidation, amalgamation or
                  merger in which the resulting entity assumes the obligations
                  of Principal Life); (f) seeks or becomes subject to the
                  appointment of an administrator, supervisor, rehabilitator,
                  provisional liquidator, conservator, receiver, trustee,
                  custodian or other similar official for it or for all or
                  substantially all its assets; (g) has a secured party take
                  possession of all or substantially all its assets or has a
                  distress, execution, attachment, sequestration or other legal
                  process levied, enforced or sued on or against all or
                  substantially all its assets and such secured party maintains
                  possession, or any such process is not dismissed, discharged,
                  stayed or restrained, in each case within 60 days thereafter;
                  (h) causes or is subject to any event with respect to it
                  which, under the applicable laws of any jurisdiction, has an
                  analogous effect to any of the events specified in clauses (a)
                  to (g) (inclusive); or (i) takes any action in furtherance of,
                  or indicating its consent to, approval of, or acquiescence in,
                  any of the foregoing acts.

         Notwithstanding anything to the contrary in this Section 8, if an event
         described in clause (iii) above occurs, this Agreement will
         automatically terminate and the amount of the Fund will be immediately
         due and payable by Principal Life to the Agreement Holder, or the
         account specified by the Agreement Holder.

         Principal Life will promptly notify the Agreement Holder and the Rating
         Agencies in writing of the occurrence of any of (i) through (iii)
         above.

9.       WITHHOLDING; ADDITIONAL AMOUNTS

         All amounts due in respect of this Agreement will be made without
         withholding or deduction for or on account of any present or future
         taxes, duties, levies, assessments or

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         other governmental charges of whatever nature imposed or levied by or
         on behalf of any governmental authority in the United States unless the
         withholding or deduction is required by law, regulation or official
         interpretation thereof. Unless otherwise specified in the Annex,
         Principal Life will not pay any additional amounts to the Agreement
         Holder in the event that any withholding or deduction is so required by
         law, regulation or official interpretation thereof, and the imposition
         of a requirement to make any such withholding or deduction will not
         give rise to an Event of Default or any independent right or obligation
         to redeem this Agreement.

10.      CURRENCY

         Except as may be specifically noted in the Annex, the Net Deposit and
         all payments under Section 7 of this Agreement shall be made using the
         currency or currencies as specified in the Notes.

11.      TAX TREATMENT

         Principal Life and the Agreement Holder agree that this Agreement shall
         be disregarded for U.S. Federal income tax purposes. Principal Life and
         the Agreement Holder further agree that if this Agreement is not so
         disregarded, it will and is intended to be treated as a debt obligation
         of Principal Life issued in registered form within the meaning of
         Treasury Regulations Section 1.871-14(c)(1)(i), except to the extent
         provided in Treasury Regulations Section 1.163-5T (or any subsequent
         similar regulation).

12.      AMENDMENT AND MODIFICATION

         This Agreement may be amended or modified in whole or in part, at any
         time and from time to time, for any period or periods (a) by mutual
         written agreement by such officers of Principal Life, the Agreement
         Holder and, where such Agreement Holder is the Indenture Trustee upon
         an assignment by way of security of this Agreement by the Trust, the
         Trust and (b) without the consent of any other person affected thereby.

13.      NOTICE

         Except as otherwise provided herein, all notices given pursuant to this
         Agreement shall be in writing, and shall either be delivered, mailed or
         telecopied to the locations listed below or at such other address or to
         the attention of such other persons as such party shall have designated
         for such purpose in a written notice complying as to delivery with the
         terms of this Section 13. Each such notice shall be effective (i) if
         given by telecopy, when transmitted to the applicable number so
         specified in this Section 13 (if required herein, such notice shall
         also be sent by mail, with first class postage prepaid), (ii) if given
         by mail, three days after deposit in the mails with first class postage
         prepaid, or (iii) if given by any other means, when actually delivered
         at such address.

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<PAGE>

         If to Principal Life:

                      Principal Life Insurance Company
                      711 High Street
                      Des Moines, Iowa 50392-0001
                      Attention:     General Counsel
                      Telephone:    (515) 247-5111
                      Telecopy:      (515) 248-3011

                      Principal Life Insurance Company
                      711 High Street
                      Des Moines, Iowa 50392-0001
                      Attention:    Jim Fifield, Counsel
                      Telephone:   (515) 248-9196
                      Telecopy:     (866) 496-6527

         If to the Agreement Holder:

                      Principal Life Income Fundings Trust o
                      c/o U.S. Bank Trust National Association
                      100 Wall Street, 16th Floor
                      New York, NY  10005
                      Attention:  Thomas E. Tabor
                      Telephone: (212) 361-6184
                      Facsimile: (212) 809-5459

         with a copy to:

                      Citibank, N.A.
                      Citibank Agency and Trust
                      388 Greenwich Street, 14th Floor
                      New York, NY 10013

                      Attention:  Nancy Forte
                      Telephone:  (212) 816-5685
                      Telecopy:  (212) 816-5527

14.      BUSINESS DAY

         For purposes of this Agreement, "Business Day" means any day that is a
         Business Day as specified in the Notes or the Indenture.

15.      BUSINESS DAY CONVENTION

         If the date on which any payment is due to be made under this Agreement
         shall occur on a day on which is not a Business Day, such payment shall
         be made in accordance with the Business Day Convention as specified in
         the Notes or the Indenture.

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16.      JURISDICTION

         The parties to this Agreement hereby consent to the non-exclusive
         jurisdiction of any State or Federal Court of competent jurisdiction
         located within the State of New York, in the Borough of Manhattan, in
         connection with any actions or proceedings arising directly or
         indirectly from this Agreement.

17.      WAIVER

         The obligations of Principal Life or the Agreement Holder under this
         Agreement may be waived only in writing by the party to this Agreement
         whose interests are adversely affected by such waiver. No failure or
         delay, on the part of the party adversely affected, in exercising any
         right or remedy hereunder shall operate as a waiver thereof.

18.      TAX REDEMPTION.

         If a Tax Event (defined below) occurs, Principal Life will have the
         right to redeem this Agreement by giving not less than 30 and no more
         than 60 days prior written notice to the Agreement Holder and by paying
         to the Agreement Holder an amount equal to the Fund. The term "Tax
         Event" means that Principal Life shall have received an opinion of
         independent legal counsel stating in effect that as a result of (a) any
         amendment to, or change (including any announced prospective change)
         in, the laws (or any regulations thereunder) of the United States or
         any political subdivision or taxing authority thereof or therein or (b)
         any amendment to, or change in, an interpretation or application of any
         such laws or regulations by any governmental authority in the United
         States, which amendment or change is enacted, promulgated, issued or
         announced on or after the Effective Date of this Agreement, there is
         more than an insubstantial risk that (i) the Trust is, or will be
         within 90 days of the date thereof, subject to U.S. federal income tax
         with respect to interest accrued or received on this Agreement or (ii)
         the Trust is, or will be within 90 days of the date thereof, subject to
         more than a de minimis amount of taxes, duties or other governmental
         charges.

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                                      ANNEX

This Annex will become effective as of the Effective Date, subject to the
requirements of Section 1.

<TABLE>

<S>                       <C>
Trust:                    Principal Life Income Fundings Trust o

Net Deposit:              The Net Deposit is $o.

Deposit:                  Regardless of the amount of the Net Deposit, the Deposit is deemed to be $o.

Bank and Account:         Bank: o
                          ABA No.: o
                          For credit to Principal Life Insurance Company
                          Account #o

Title of Notes:           [Principal Life Income Fundings Trust o   [o%][o Rate] Principal(R) Life
                          CoreNotes(R) Due o]
                          [Principal Life Income Fundings Trust o   [o%][o Rate] Secured Medium-Term
                          Retail Notes Due o]
                          [Principal Life Income Fundings Trust o   [o%][o Rate] Secured Medium-Term
                          Notes Due o]

[Survivor's Option:       Unless this Agreement has been declared due and payable prior to the
                          Maturity Date of the related Notes by reason of any Event of Default, or has
                          been previously redeemed or otherwise repaid, the Agreement Holder may
                          request repayment of this Agreement upon the valid exercise of the
                          Survivor's Option in the Notes by the Representative of the deceased
                          Beneficial Owner of such Notes (a "Survivor's Option").

                          Except as provided below, upon the tender to and acceptance by Principal
                          Life of this Agreement (or portion thereof) securing the Notes as to which
                          the Survivor's Option has been exercised, Principal Life shall repay to the
                          Agreement Holder the amount of the Fund equal to (i) 100% of the principal
                          amount of the Notes as to which the Survivor's Option has been validly
                          exercised and accepted, plus accrued and unpaid interest on such amount to
                          the date of repayment, or (ii) in the case of Discount Notes, the Issue
                          Price of the Notes as to which the Survivor's Option has been validly
                          exercised and accepted, plus accrued discount and any accrued and unpaid
                          interest on such amount to the date of repayment. However, Principal Life
                          shall not be obligated to repay:
</Table>

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o        more than the greater of $2,000,000 or 2% of the aggregate deposit for
         all funding agreement contracts securing all outstanding notes issued
         under the Principal(R) Life CoreNotes(sm) Program and Secured
         Medium-Term Notes Retail Program as of the end of the most recent
         calendar year;

o        more than $250,000 in aggregate deposit of funding agreement contracts
         securing outstanding notes issued under the Principal(R) Life
         CoreNotes(sm) Program and Secured Medium Term Notes Retail Program as
         to which the Survivor's Option has been exercised on behalf of any
         single beneficial owner in any calendar year; or

o        more than 2% of the Deposit under this Agreement which secures the
         related Notes, as of the end of the most recent calendar year.

Principal Life shall not make repayments pursuant to the Agreement Holder's
request for repayment upon exercise of the Survivor's Option in amounts that are
less than $1,000, and, in the event that the limitations described in the
preceding sentence would result in the partial repayment of this Agreement, the
principal amount of this Agreement remaining outstanding after repayment must be
at least $1,000 (the minimum authorized denomination of this Agreement). A
request for repayment by the Agreement Holder upon an otherwise valid election
to exercise the Survivor's Option may not be withdrawn.

This Agreement (or portion thereof) accepted for repayment shall be repaid on
the first Interest Payment Date for the related Notes that occurs 20 or more
calendar days after the date of such acceptance.

In order to obtain repayment of this Agreement (or portion thereof) upon
exercise of the Survivor's Option, the Agreement Holder must provide to
Principal Life (i) a written request for repayment signed by the Agreement
Holder, and (ii) any additional information Principal Life requires to evidence
satisfaction of any conditions to the repayment of this Agreement (or portion
thereof).]

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PRINCIPAL LIFE INSURANCE COMPANY

By:________________________________

Name: o

Title:  Officer

PRINCIPAL LIFE INCOME FUNDINGS TRUST o

By:     U.S. Bank Trust National Association,
        not in its individual capacity, but solely in its
        capacity as trustee

By:     Bankers Trust Company, N.A.,
        under Limited Power of Attorney, dated o

By:________________________________

Name: _____________________________

Title:_____________________________

                                      A-3