UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


             |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2004

                                       OR

            |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
               For the transition period from ________to ________

                         Commission file number 33-28976

                           IDS LIFE INSURANCE COMPANY
             (Exact name of registrant as specified in its charter)

           Minnesota                                              41-0823832
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)


        829 AXP Financial Center
         Minneapolis, Minnesota                                    55474
(Address of principal executive offices)                         (Zip Code)

       Registrant's telephone number, including area code: (612) 671-3131
                                                           ---------------

                                      None
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X]   No ____

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes ____  No [X]


THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1) (a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
<PAGE>


                           IDS LIFE INSURANCE COMPANY

                                    FORM 10-Q

                                      INDEX
                                                                        Page No.
PART I.   Financial Information:

          Item 1.  Financial Statements

                   Consolidated Balance Sheets--June 30, 2004 and December
                   31, 2003                                                    1

                   Consolidated Statements of Income--Three months ended
                   June 30, 2004 and 2003                                      2

                   Consolidated Statements of Income--Six months ended
                   June 30, 2004 and 2003                                      3

                   Consolidated Statements of Cash Flows--Six months ended
                   June 30, 2004 and 2003                                      4

                   Notes to Consolidated Financial Statements               5-10

          Item 2.  Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                     11-17

          Item 4.  Controls and Procedures                                    17

PART II.  Other Information

          Item 1.  Legal Proceedings                                          18

          Item 6.  Exhibits and Reports on Form 8-K                           18

          Signatures                                                          19

          Exhibit Index                                                      E-1
<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                         IDS LIFE INSURANCE COMPANY
                                        CONSOLIDATED BALANCE SHEETS
                                       (thousands, except share data)
                                                                                          June 30,             December 31,
                                                                                            2004                   2003
                                                                                       ----------------     -------------------
                                                                                          (Unaudited)
<S>                                                                                       <C>                   <C>
Assets
Investments:
    Available-for-Sale:
       Fixed maturities, at fair value (amortized cost: 2004, $26,794,583;
       2003, $26,596,709)                                                                 $ 26,855,813          $ 27,293,565
       Preferred and common stocks, at fair value (cost:  2004, $30,019;
       2003, $30,019)                                                                           29,343                31,046
    Mortgage loans on real estate, at cost (less reserves: 2004, $47,197;
       2003, $47,197)                                                                        3,081,972             3,180,020
    Policy loans                                                                               578,026               578,000
    Other investments                                                                          790,472               801,871
                                                                                       ----------------     -------------------
            Total investments                                                               31,335,626            31,884,502

Cash and cash equivalents                                                                      236,204               400,294
Restricted cash                                                                                823,519               834,448
Amounts recoverable from reinsurers                                                            808,623               754,514
Amounts due from brokers                                                                         3,452                 1,792
Other accounts receivable                                                                       72,570                68,422
Accrued investment income                                                                      345,846               355,374
Deferred policy acquisition costs                                                            3,578,046             3,336,208
Deferred income taxes, net                                                                      32,775                     -
Deferred sales inducement costs                                                                295,956               278,971
Other assets                                                                                   317,909               253,858
Separate account assets                                                                     29,424,686            27,774,319
                                                                                       ----------------     -------------------

    Total assets                                                                          $ 67,275,212          $ 65,942,702
                                                                                       ================     ===================

Liabilities and Stockholder's Equity
Liabilities:
    Future policy benefits:
       Fixed annuities                                                                    $ 26,569,522          $ 26,376,944
       Variable annuity guarantees                                                              31,198                     -
       Universal life insurance                                                              3,662,945             3,569,882
       Traditional life insurance                                                              261,304               254,641
       Disability income and long-term care insurance                                        1,818,231             1,724,204
    Policy claims and other policyholders' funds                                                82,000                67,911
    Amounts due to brokers                                                                     194,332               228,707
    Deferred income taxes, net                                                                       -               139,814
    Other liabilities                                                                          444,457               408,444
    Separate account liabilities                                                            29,424,686            27,774,319
                                                                                       ----------------     -------------------

            Total liabilities                                                               62,488,675            60,544,866
                                                                                       ----------------     -------------------

Stockholder's equity:
    Capital stock, $30 par value per share;
       100,000 shares authorized, issued and outstanding                                         3,000                 3,000
    Additional paid-in capital                                                               1,370,388             1,370,388
    Retained earnings                                                                        3,394,170             3,624,837
    Accumulated other comprehensive income, net of tax:
       Net unrealized securities gains                                                          37,051               405,456
       Net unrealized derivative losses                                                        (18,072)               (5,845)
                                                                                       ----------------     -------------------
            Total accumulated other comprehensive income                                        18,979               399,611
                                                                                       ----------------     -------------------

            Total stockholder's equity                                                       4,786,537             5,397,836
                                                                                       ----------------     -------------------

    Total liabilities and stockholder's equity                                            $ 67,275,212          $ 65,942,702
                                                                                       ================     ===================
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      -1-
<PAGE>

<TABLE>
<CAPTION>
                           IDS LIFE INSURANCE COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (thousands)
                                   (Unaudited)
                                                                                             Three months ended
                                                                                                  June 30,
                                                                                  ------------------------------------------
                                                                                       2004                       2003
                                                                                  ---------------            ---------------
<S>                                                                               <C>                        <C>
Revenues:
    Premiums:
       Traditional life insurance                                                 $        17,003            $        16,267
       Disability income and long-term care insurance                                      70,268                     70,190
                                                                                  ---------------            ---------------
           Total premiums                                                                  87,271                     86,457

    Net investment income                                                                 464,644                    422,406
    Contractholder and policyholder charges                                               138,181                    134,539
    Mortality and expense risk and other fees                                             101,740                     95,395
    Net realized gain on investments                                                        8,867                      1,201
                                                                                  ---------------            ---------------
           Total                                                                          800,703                    739,998
                                                                                  ---------------            ---------------

Benefits and Expenses:
    Death and other benefits:
       Traditional life insurance                                                           9,528                      9,403
       Investment contracts and universal life-type insurance                              58,474                     42,515
       Disability income and long-term care insurance                                      16,178                     13,641
    Increase (decrease) in liabilities for future policy benefits:
       Traditional life insurance                                                             649                     (2,360)
       Disability income and long-term care insurance                                      34,566                     35,322
    Interest credited on investment contracts and universal
       life-type insurance                                                                280,009                    307,097
    Amortization of deferred policy acquisition costs                                      88,206                     72,041
    Other insurance and operating expenses                                                119,824                    125,046
                                                                                  ---------------            ---------------
           Total                                                                          607,434                    602,705
                                                                                  ---------------            ---------------
Pre-tax income                                                                            193,269                    137,293
Income tax provision                                                                       70,165                     27,060
                                                                                  ---------------            ---------------

Net income                                                                        $       123,104            $       110,233
                                                                                  ===============            ===============
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      -2-
<PAGE>

<TABLE>
<CAPTION>
                           IDS LIFE INSURANCE COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (thousands)
                                   (Unaudited)

                                                                                              Six months ended
                                                                                                  June 30,
                                                                                  ------------------------------------------
                                                                                       2004                       2003
                                                                                  ---------------            ---------------
<S>                                                                               <C>                        <C>
Revenues:
    Premiums:
       Traditional life insurance                                                 $        34,054            $        32,385
       Disability income and long-term care insurance                                     138,366                    139,381
                                                                                  ---------------            ---------------
           Total premiums                                                                 172,420                    171,766

    Net investment income                                                                 879,817                    818,533
    Contractholder and policyholder charges                                               274,384                    265,440
    Mortality and expense risk and other fees                                             208,982                    182,450
    Net realized gain on investments                                                       17,513                     23,320
                                                                                  ---------------            ---------------
           Total                                                                        1,553,116                  1,461,509
                                                                                  ---------------            ---------------

Benefits and Expenses:
    Death and other benefits:
       Traditional life insurance                                                          20,090                     19,858
       Investment contracts and universal life-type insurance                             116,707                    102,184
       Disability income and long-term care insurance                                      31,536                     27,347
    (Decrease) increase in liabilities for future policy benefits:
       Traditional life insurance                                                            (616)                      (359)
       Disability income and long-term care insurance                                      54,686                     65,839
    Interest credited on investment contracts and universal
       life-type insurance                                                                563,080                    601,892
    Amortization of deferred policy acquisition costs                                     111,784                    153,813
    Other insurance and operating expenses                                                245,412                    237,948
                                                                                  ---------------            ---------------
           Total                                                                        1,142,679                  1,208,522
                                                                                  ---------------            ---------------
Pre-tax income before accounting change                                                   410,437                    252,987
Income tax provision                                                                      140,536                     46,566
                                                                                  ---------------            ---------------
Income before accounting change                                                           269,901                    206,421
Cumulative effect of accounting change, net of tax (Note 1)                               (70,568)                         -
                                                                                  ----------------           ---------------

Net income                                                                        $       199,333            $       206,421
                                                                                  ===============            ===============
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      -3-
<PAGE>

<TABLE>
<CAPTION>
                           IDS LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (thousands)
                                   (Unaudited)

                                                                                              Six months ended
                                                                                                  June 30,
                                                                                       2004                       2003
                                                                                  ---------------            ---------------
<S>                                                                               <C>                        <C>
Cash Flows from Operating Activities
  Net income                                                                      $       199,333            $       206,421
  Adjustments to reconcile net income to
     net cash provided by (used in) operating activities:
       Policy loans, excluding universal life-type insurance
          Repayment                                                                        19,370                     47,131
          Issuance                                                                        (19,101)                   (40,664)
       Change in amounts recoverable from reinsurers                                      (54,109)                   (53,749)
       Change in other accounts receivable                                                 (4,148)                    19,609
       Change in accrued investment income                                                  9,139                    (53,080)
       Change in deferred policy acquisition costs, net                                  (151,457)                  (142,657)
       Change in liabilities for future policy benefits for traditional life,
          disability income and long-term care insurance                                  100,690                    124,666
       Change in policy claims and other policyholders' funds                              14,089                      1,237
       Deferred income taxes                                                               70,363                     12,631
       Change in other assets and liabilities, net                                        (42,548)                  (127,942)
       Amortization of premium, net                                                        43,069                     98,240
       Net realized gain on investments                                                   (17,513)                   (23,320)
       Net realized gains on trading securities                                           (16,249)                   (14,934)
       Policyholder and contractholder charges, non-cash                                 (115,062)                  (118,956)
       Cumulative effect of accounting change, net of tax (Note 1)                         70,568                          -
                                                                                  ----------------           ---------------
  Net cash provided by (used in) operating activities                                     106,434                    (65,367)
                                                                                  ----------------           ---------------
Cash Flows from Investing Activities
  Available-for-Sale securities:
       Sales                                                                              795,643                  6,260,068
       Maturities, sinking fund payments and calls                                      1,026,235                  2,268,842
       Purchases                                                                       (2,041,103)               (12,096,165)
  Other investments, excluding policy loans:
       Sales, maturities, sinking fund payments and calls                                 364,122                    320,940
       Purchases                                                                         (239,443)                  (567,419)
  Change in amounts due to and from brokers, net                                          (36,033)                (3,081,601)
                                                                                  ----------------           ---------------
  Net cash used in investing activities                                                  (130,579)                (6,895,335)
                                                                                  ----------------           ---------------
Cash Flows from Financing Activities
  Activity related to investment contracts and universal life-type insurance:
       Considerations received                                                          1,127,947                  2,918,726
       Interest credited to account balances                                              563,080                    601,892
       Surrenders and other benefits                                                   (1,400,677)                  (888,181)
  Universal life-type insurance policy loans:
       Repayment                                                                           46,102                     22,079
       Issuance                                                                           (46,397)                   (15,923)
  Cash dividend to parent                                                                (430,000)                         -
                                                                                  ----------------           ---------------
  Net cash (used in) provided by financing activities                                    (139,945)                 2,638,593
                                                                                  ----------------           ---------------
Net decrease in cash and cash equivalents                                                (164,090)                (4,322,109)

Cash and cash equivalents at beginning of period                                          400,294                  4,424,061
                                                                                  ----------------           ---------------
Cash and cash equivalents at end of period                                        $       236,204            $       101,952
                                                                                  ===============            ===============
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      -4-
<PAGE>

                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation

     The accompanying Consolidated Financial Statements should be read in
     conjunction with the financial statements in the Annual Report on Form 10-K
     of IDS Life Insurance Company (IDS Life) for the year ended December 31,
     2003. Certain reclassifications of prior period amounts have been made to
     conform to the current presentation.

     The interim financial information in this report has not been audited. In
     the opinion of management, all adjustments necessary for a fair
     presentation of the consolidated financial position and the consolidated
     results of operations for the interim periods have been made. All
     adjustments made were of a normal, recurring nature. Results of operations
     reported for interim periods are not necessarily indicative of results for
     the entire year.

     Recently Issued Accounting Standards

     In July 2003, the American Institute of Certified Public Accountants issued
     Statement of Position 03-1, "Accounting and Reporting by Insurance
     Enterprises for Certain Nontraditional Long-Duration Contracts and for
     Separate Accounts" (SOP 03-1) effective for fiscal years beginning after
     December 15, 2003. SOP 03-1 provides guidance on separate account
     presentation and accounting for interests in separate accounts.
     Additionally, SOP 03-1 provides clarifying guidance as to the recognition
     of bonus interest and other sales inducement benefits and the presentation
     of any deferred amounts in the financial statements. Lastly, SOP 03-1
     requires insurance enterprises to establish additional liabilities for
     benefits that may become payable under variable annuity death benefit
     guarantees or other insurance or annuity contract provisions. Where an
     additional liability is established, the recognition of this liability will
     then be considered in amortizing deferred policy acquisition costs (DAC)
     and any deferred sales inducement costs associated with those insurance or
     annuity contracts.

     The adoption of SOP 03-1 as of January 1, 2004, resulted in a cumulative
     effect of accounting change that reduced 2004 results by $70.6 million
     ($108.6 million pretax). The cumulative effect of accounting change
     consisted of: (i) $42.8 million pretax from establishing additional
     liabilities for certain variable annuity guaranteed benefits and from
     considering these liabilities in valuing DAC and deferred sales inducement
     costs associated with those contracts and (ii) $65.7 million pretax from
     establishing additional liabilities for certain variable universal life and
     single pay universal life insurance contracts under which contractual cost
     of insurance charges are expected to be less than future death benefits and
     from considering these liabilities in valuing DAC associated with those
     contracts. Prior to the adoption of SOP 03-1, amounts paid in excess of
     contract value were expensed when payable. IDS Life's accounting for
     separate accounts was already consistent with the provisions of SOP 03-1
     and, therefore, there was no impact related to this requirement.

     The additional liabilities for guaranteed benefits established under SOP
     03-1 are supported by general account assets. Changes in these liabilities
     are included in death and other benefits in the Consolidated Statements of
     Income.

     The majority of the variable annuity contracts offered by IDS Life contain
     guaranteed minimum death benefit (GMDB) provisions. When market values of
     the customer's accounts decline, the death benefit payable on a contract
     with a GMDB may exceed the

                                      -5-
<PAGE>

                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     contract  accumulation  value. IDS Life also offers variable annuities with
     death  benefit  provisions  that gross up the  amount  payable by a certain
     percentage  of contract  earnings;  these are referred to as gain  gross-up
     benefits  (GGU).  In  addition,   IDS  Life  offers  contracts   containing
     guaranteed  minimum  income benefit  (GMIB)  provisions.  If elected by the
     contract  owner  and  after  a  stipulated  waiting  period  from  contract
     issuance, a GMIB guarantees a minimum lifetime annuity based on a specified
     rate of  contract  accumulation  value  growth  and  predetermined  annuity
     purchase rates. IDS Life has established  additional  liabilities for these
     variable  annuity death and GMIB benefits  under SOP 03-1. IDS Life has not
     established  additional  liabilities for other  insurance or  annuitization
     guarantees for which the risk is currently immaterial.

     The variable annuity death benefit liability is determined each period by
     estimating the expected value of death benefits in excess of the projected
     contract accumulation value and recognizing the excess over the estimated
     meaningful life based on expected assessments (e.g., mortality and expense
     fees, contractual administrative charges and similar fees). Similarly, the
     GMIB liability is determined each period by estimating the expected value
     of annuitization benefits in excess of the projected contract accumulation
     value at the date of annuitization and recognizing the excess over the
     estimated meaningful life based on expected assessments. Significant
     assumptions made in projecting future benefits and assessments relate to
     customer asset value growth rates, mortality, persistency and investment
     margins and are consistent with those used for DAC asset valuation for the
     same contracts. In determining the additional liabilities for variable
     annuity death benefits and GMIB, IDS Life projects these benefits and
     contract assessments over 200 randomly generated equity market scenarios.
     As with DAC, management will review and, where appropriate, adjust its
     assumptions each quarter. Unless management identifies a material deviation
     over the course of the quarterly monitoring, management will review and
     update these assumptions annually in the third quarter of each year.

     The following provides summary information related to variable annuity
     contracts for which IDS Life has established additional liabilities for
     death benefits and guaranteed minimum income benefits:

                                      -6-
<PAGE>


                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
            Variable Annuity GMDB and GMIB by Benefit Type                        As of              As of
                                                                              June 30, 2004     December 31, 2003
-----------------------------------------------------------------------------------------------------------------
(Dollar amounts in millions)
-------------------------- --------------------------------------------------------------------------------------
<S>                                                                           <C>                   <C>
   Contracts with GMDB     Total Contract Value                               $     3,118.1         $  2,413.1
 Providing for Return of
         Premium           Contract Value in Separate Accounts                $     1,592.1         $  1,107.0

                           Net Amount at Risk*                                $        27.4         $     27.7

                           Weighted Average Attained Age                                 62                 62
-------------------------- --------------------------------------------------------------------------------------
   Contracts with GMDB     Total Contract Value                               $    25,161.4         $ 24,570.6
 Providing for Six Year
          Reset            Contract Value in Separate Accounts                $    20,772.7         $ 20,316.1

                           Net Amount at Risk*                                $     1,835.0         $  2,077.5

                           Weighted Average Attained Age                                 60                 60
-------------------------- --------------------------------------------------------------------------------------
   Contracts with GMDB     Total Contract Value                               $     3,109.5         $  2,827.5
 Providing for One Year
         Ratchet           Contract Value in Separate Accounts                $     2,250.5         $  1,886.3

                           Net Amount at Risk*                                $        89.1         $     84.7

                           Weighted Average Attained Age                                 61                 60
-------------------------- --------------------------------------------------------------------------------------
Contracts with Other GMDB  Total Contract Value                               $       369.2         $  1,001.1

                           Contract Value in Separate Accounts                $       283.4         $    668.5

                           Net Amount at Risk*                                $        53.3         $     21.1

                           Weighted Average Attained Age                                 65                 63
-------------------------- --------------------------------------------------------------------------------------
   Contracts with GGU      Total Contract Value                               $       331.9         $    276.4
      Death Benefit
                           Contract Value in Separate Accounts                $       257.7         $    193.1

                           Net Amount at Risk*                                $         9.8         $      5.8

                           Weighted Average Attained Age                                 64                 61
-------------------------- --------------------------------------------------------------------------------------
   Contracts with GMIB     Total Contract Value                               $       434.7         $    357.8

                           Contract Value in Separate Accounts                $       350.3         $    268.3

                           Net Amount at Risk*                                $        25.1         $     23.0

                           Weighted Average Attained Age                                 59                 59
-------------------------- --------------------------------------------------------------------------------------

*    Represents current death benefit less total contract value for GMDB, amount
     of gross up for GGU and  accumulated  guaranteed  minimum benefit base less
     total contract value for GMIB and assumes the  actuarially  remote scenario
     that all claims become payable on the same day.

-----------------------------------------------------------------------------------------------------------------
             Additional Liabilities and Incurred Benefits                       GMDB & GGU           GMIB
-------------------------- --------------------------------------------------------------------------------------
Six  months ended June     Liability balance at January 1                     $        30.6         $      2.2
30, 2004
                           Reported claims                                    $        10.1         $        -

                           Liability balance at June 30                       $        28.8         $      2.4

                           Incurred claims (reported + change in liability)   $         8.3         $      0.2
-------------------------- --------------------------------------------------------------------------------------
</TABLE>

     Contract values in separate accounts were invested in various equity, bond
     and other funds as directed by the contract holder. No gains or losses were
     recognized on assets transferred to separate accounts for the periods
     presented.

     Sales inducement costs consist of bonus interest credits and premium
     credits added to certain annuity contract values. These benefits are
     capitalized to the extent they are incremental to amounts that would be
     credited on similar contracts without the applicable feature. Deferred
     sales inducement costs were $296.0 million and $279.0 million as of June
     30, 2004 and December 31, 2003, respectively, and are stated separately in
     the Consolidated Balance Sheets. These costs were previously included in
     DAC and were reclassified as part of the adoption of SOP 03-1. The amounts
     capitalized are amortized using the same methodology and assumptions used
     to amortize DAC. IDS Life capitalized $17.0 million and $23.8 million
     during the three months ended June 30, 2004 and 2003, respectively, and
     $37.0

                                      -7-
<PAGE>


                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     million  and $43.0  million  during the six months  ended June 30, 2004 and
     2003, respectively. IDS Life amortized $8.9 million and $6.3 million during
     the three  months  ended June 30,  2004 and 2003,  respectively,  and $16.9
     million  and $13.3  million  during the six months  ended June 30, 2004 and
     2003, respectively.

     In November 2003, the Financial Accounting Standards Board (FASB) ratified
     a consensus on the disclosure provisions of Emerging Issues Task Force
     (EITF) Issue 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
     Application to Certain Investments." IDS Life complied with the disclosure
     provisions of this rule in Note 2 to the Consolidated Financial Statements
     included in its Annual Report on Form 10-K for the year ended December 31,
     2003. In March 2004, the FASB reached a consensus regarding the application
     of a three-step impairment model to determine whether cost method
     investments are other-than-temporarily impaired. The provisions of this
     rule are required to be applied prospectively to all current and future
     investments accounted for in accordance with SFAS No. 115, "Accounting for
     Certain Investments in Debt and Equity Securities," and other cost method
     investments for reporting periods beginning after June 15, 2004. Assuming
     no market changes, IDS Life does not expect EITF 03-1 to have a material
     impact on IDS Life's results of operations at the time of adoption.

2.   Investment Securities

     Gross realized gains and losses on sales and losses recognized for
     other-than-temporary impairments of securities classified as
     Available-for-Sale, using the specific identification method, were as
     follows for the three months ended June 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                                                             Three Months Ended June 30,
                                                                      ------------------------------------------
                                                                            2004                    2003
                                                                      ------------------      ------------------
<S>                                                                       <C>                     <C>
     (Millions)
     Gross realized gains on sales                                        $   10.5                $   52.9
     Gross realized losses on sales                                       $   (2.7)               $   (8.3)
     Realized losses recognized for other-than-temporary impairments      $      -                $  (34.5)

     Gross realized gains and losses on sales and losses recognized for
     other-than-temporary impairments of securities classified as
     Available-for-Sale, using the specific identification method, were as
     follows for the six months ended June 30, 2004 and 2003:

                                                                              Six Months Ended June 30,
                                                                      ------------------------------------------
                                                                            2004                    2003
                                                                      ------------------      ------------------
     (Millions)
     Gross realized gains on sales                                        $   23.7                $  191.0
     Gross realized losses on sales                                       $   (6.4)               $  (54.8)
     Realized losses recognized for other-than-temporary impairments      $   (0.1)               $ (102.6)
</TABLE>


                                      -8-
<PAGE>

                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


3.   Comprehensive Income

     Comprehensive income is defined as the aggregate change in stockholder's
     equity, excluding changes in ownership interests. It is the sum of net
     income and changes in unrealized gains or losses on Available-for-Sale
     securities and applicable deferred policy acquisition and deferred sales
     inducement costs, net of related tax and unrealized gains or losses on
     derivatives, net of related tax.

     Total comprehensive (loss) income was ($528.7) million and $327.4 million
     for the three months ended June 30, 2004 and 2003, respectively. Total
     comprehensive (loss) income was ($181.3) million and $451.3 million for the
     six months ended June 30, 2004 and 2003, respectively. The difference
     between net income and total comprehensive income for these periods
     primarily reflects the after-tax change in net unrealized gains on
     Available-for-Sale securities.

4.   Taxes and Interest

     Net income taxes paid during the six months ended June 30, 2004 and 2003,
     were $83.3 million and $73.3 million, respectively. Interest paid on
     borrowings during the six months ended June 30, 2004 and 2003, were $0.4
     million and $1.7 million, respectively.


                                      -9-
<PAGE>


                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



5.   Commitments and Contingencies

     Commitments to fund mortgage loans on real estate at June 30, 2004 and
     December 31, 2003 were $87.1 million and $58.5 million, respectively.

     The maximum amount of life insurance risk retained by IDS Life is $750,000
     on any policy insuring a single life and $1.5 million on any policy
     insuring a joint-life combination. IDS Life generally retains 10 percent of
     the mortality risk on new life insurance policies. Risk not retained is
     reinsured with other life insurance companies. Risk on universal life and
     variable universal life policies is reinsured on a yearly renewable term
     basis. Risk on term insurance and long-term care policies is reinsured on a
     coinsurance basis. IDS Life retains all accidental death benefit,
     disability income and waiver of premium risk. Reinsurance contracts do not
     relieve IDS Life from its primary obligation to policyholders.

     Substantially all of IDS Life's life and annuity products have minimum
     interest rate guarantees in their fixed accounts. As of June 30, 2004,
     these minimum interest rate guarantees ranged from 1.5 percent to 5.0
     percent. To the extent the yield on IDS Life's investment portfolio
     declines below its target spread plus the minimum guarantee, IDS Life's
     profitability would be negatively affected.

     The Securities and Exchange Commission (SEC), the National Association of
     Securities Dealers (NASD) and several state attorneys general have brought
     proceedings challenging several mutual fund and variable account financial
     practices, including suitability generally, late trading, market timing,
     disclosure of revenue sharing arrangements and inappropriate sales. IDS
     Life Insurance Company has received requests for information and has been
     contacted by regulatory authorities concerning its practices and is
     cooperating fully with these inquiries.

     IDS Life Insurance Company and its subsidiaries are involved in other legal
     and arbitration proceedings concerning matters arising in connection with
     the conduct of their respective business activities. IDS Life believes it
     has meritorious defenses to each of these actions and intends to defend
     them vigorously. In addition, IDS Life is subject to periodic state
     insurance department regulatory action, through examinations or other
     proceedings. IDS Life believes that it is not a party to, nor are any of
     its properties the subject of, any pending legal, arbitration, or
     regulatory proceedings that would have a material adverse effect on its
     consolidated financial condition, results of operations or liquidity.
     However, it is possible that the outcome of any such proceedings could have
     a material impact on results of operations in any particular reporting
     period as the proceedings are resolved.

     The IRS routinely examines IDS Life's federal income tax returns and is
     currently conducting an audit for the 1993 through 1996 tax years.
     Management does not believe there will be a material adverse effect on IDS
     Life's consolidated financial position as a result of these audits.


                                      -10-
<PAGE>



     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS

     IDS Life Insurance Company is a stock life insurance company organized
     under the laws of the State of Minnesota. IDS Life Insurance Company is a
     wholly owned subsidiary of American Express Financial Corporation (AEFC),
     which is a wholly owned subsidiary of American Express Company. IDS Life
     Insurance Company serves residents of the District of Columbia and all
     states except New York. IDS Life Insurance Company distributes its fixed
     and variable insurance and annuities products exclusively through the
     American Express Financial Advisors Inc.'s (AEFAI) retail sales force. IDS
     Life Insurance Company has four wholly owned life insurance company
     subsidiaries that distribute their products through various distribution
     channels. IDS Life Insurance Company of New York (IDS Life of New York) is
     a wholly owned subsidiary of IDS Life Insurance Company and serves New York
     State residents. IDS Life of New York distributes its fixed and variable
     insurance and annuity products exclusively through AEFAI's retail sales
     force. IDS Life Insurance Company also owns American Enterprise Life
     Insurance Company (American Enterprise Life), an Indiana corporation, which
     primarily issues fixed and variable annuity contracts for sale through
     non-affiliated representatives and agents of third party distributors.
     American Centurion Life Assurance Company (American Centurion Life) is also
     a subsidiary of IDS Life Insurance Company. American Centurion Life offers
     fixed and variable annuities to American Express(R) Cardmembers and others
     in New York, as well as fixed and variable annuities for sale through
     non-affiliated representatives and agents of third party distributors, in
     New York. IDS Life Insurance Company also owns American Partners Life
     Insurance Company (American Partners Life), an Arizona corporation which
     offers fixed and variable annuity contracts to American Express(R)
     Cardmembers and others who reside in states other than New York. IDS Life
     Insurance Company also owns IDS REO 1, LLC and IDS REO II, LLC. These two
     subsidiaries hold real estate and mortgage loans on real estate. IDS Life
     Insurance Company and its six subsidiaries are referred to collectively
     herein as "IDS Life".

     IDS Life follows United States generally accepted accounting principles
     (GAAP), and the following discussion is presented on a consolidated basis
     consistent with GAAP.

     Certain of the statements below are forward-looking statements within the
     meaning of the Private Securities Litigation Reform Act of 1995. See the
     Forward-Looking Statements section below.

     Results of Operations for the Three Months Ended June 30, 2004 and 2003

     Net income was $123.1 million for the three months ended June 30, 2004,
     compared to $110.2 million for the three months ended June 30, 2003. The
     increase in net income primarily reflects increases in net investment
     income and net realized gains on investments and lower interest credited on
     investment contracts and universal life-type insurance partially offset by
     an increased effective tax rate, which is discussed in further detail
     below.

     Revenues

     Net investment income increased $42.2 million or 10 percent reflecting
     slightly higher average levels of invested assets and an $18 million pretax
     benefit reflecting lower than expected losses resulting from management's
     first quarter decision to liquidate a secured loan trust managed by an
     affiliate. Additionally, net investment income for the second quarter of
     2003, includes $19.3 million of amortization expense of certain low income
     housing investments, whereas there was no amortization expense of such
     investments in the second quarter of 2004. See effective tax rate
     discussion below regarding IDS Life's December 2003 low income housing
     investment distribution to AEFC.

                                      -11-
<PAGE>

     Mortality and expense risk and other fees increased $6.3 million or 7
     percent, reflecting higher average values of separate account assets, and
     the impact of the change from IDS Life to AEFC as investment manager of the
     internally managed proprietary funds during the fourth quarter of 2003.
     Concurrent with the investment manager change, IDS Life entered into an
     agreement with AEFC to receive fees for the services, other than investment
     management, that IDS Life continues to provide the underlying proprietary
     mutual funds. The administrative service fees will vary with the market
     values of these proprietary mutual funds. Previous to this change, IDS Life
     received management fees directly from the proprietary funds and was party
     to an agreement with AEFC to compensate AEFC for the investment
     sub-advisory services AEFC provided these proprietary funds. In addition to
     the administrative service fees, IDS Life receives mortality and expense
     risk fees from the separate accounts based on the level of assets.

     Net realized gain on investments was $8.9 million for the three months
     ended June 30, 2004 compared to $1.2 million for the three months ended
     June 30, 2003. For the three months ended June 30, 2004, $11.6 million of
     investment gains were partially offset by $2.7 million of gross realized
     losses from sales of securities, classified as Available-for-Sale. Included
     in these total investment gains are $10.5 million of gross realized gains
     from sales of securities, classified as Available-for-Sale.

     For the three months ended June 30, 2003, $53.7 million of investment gains
     were partially offset by $52.4 million of impairments and losses. Included
     in these total investment gains and losses are $52.9 million of gross
     realized gains and $8.2 million of gross realized losses from sales of
     securities, as well as $34.5 million of other-than-temporary impairment
     losses on investments, classified as Available-for-Sale.

     Benefits and Expenses

     Interest credited on investment contracts and universal life-type insurance
     decreased $27.1 million or 9 percent, primarily reflecting lower interest
     crediting rates and lower appreciation in the S&P 500 on equity indexed
     annuities this year versus last year, partially offset by higher average
     inforce levels of both investment contracts and life products.

     Amortization of deferred policy acquisition costs (DAC) increased $16.2
     million or 22 percent reflecting lower than assumed equity market
     appreciation within IDS Life's variable annuity and variable life products
     compared to the same period last year.

     The effective tax rate increased to 36 percent in the three months ended
     June 30, 2004 from 20 percent in the three months ended June 30, 2003,
     reflecting the December 30, 2003 distribution of substantially all of IDS
     Life's interests in low income housing investments to AEFC and also due to
     reductions in net deferred tax assets, both of which caused unfavorable tax
     provision impacts. For 2003 and prior years, IDS Life's federal income
     taxes were reduced by credits arising from such low income housing
     investments. IDS Life's distribution to AEFC is more fully discussed in IDS
     Life's Annual Report on Form 10-K for the year ended December 31, 2003.

     Results of Operations for the Six Months Ended June 30, 2004 and 2003

     Income before accounting change was $269.9 million for the six months ended
     June 30, 2004, compared to $206.4 million for the six months ended June 30,
     2003. The increase primarily reflects increased net investment income,
     lower interest credited on investment contracts and universal life-type
     insurance and the first quarter 2004 net $56.4 million


                                      -12-
<PAGE>

     decrease in expenses primarily from DAC adjustments in conjunction with SOP
     03-1. See the DAC section below for discussion of these adjustments.

     Net income for the six months ended June 30, 2004 reflects the $70.6
     million ($108.6 million pretax) impact of IDS Life's adoption of SOP 03-1.
     See "Recently Issued Accounting Standards" section of Note 1 to the
     Consolidated Financial Statements for discussion regarding the impact of
     adoption of SOP 03-1.

     Revenues

     Net investment income increased $61.3 million or 7 percent reflecting
     slightly higher average levels of invested assets and an $18.1 million
     pretax benefit in the second quarter of 2004, reflecting lower than
     expected losses resulting from management's first quarter decision to
     liquidate a secured loan trust managed by an affiliate, as well as the
     original first quarter $49 million pretax charge related to the same early
     liquidation. Additionally, net investment income for the six months ended
     June 30, 2003 includes $38.7 million of amortization expense of certain low
     income housing investments. See effective tax rate discussion below.

     Mortality and expense risk and other fees increased $26.5 million or 15
     percent, reflecting higher average values of separate account assets, and
     the impact of the change from IDS Life to AEFC as investment manager of the
     internally managed proprietary funds during the fourth quarter of 2003.

     Net realized gain on investments was $17.5 million for the six months ended
     June 30, 2004 compared to $23.4 million for the six months ended June 30,
     2003. For the six months ended June 30, 2004, $26.5 million of investment
     gains were partially offset by $9.0 million of impairments and losses.
     Included in these total investment gains and losses are $23.7 million of
     gross realized gains and $6.4 million of gross realized losses from sales
     of securities, as well as $0.1 million of other-than-temporary impairment
     losses on investments, classified as Available-for-Sale.

     For the six months ended June 30, 2003, $192.0 million of investment gains
     were partially offset by $168.6 million of impairments and losses. Included
     in these total investment gains and losses are $191.0 million of gross
     realized gains and $54.8 million of gross realized losses from sales of
     securities, as well as $102.6 million of other-than-temporary investment
     impairment losses, classified as Available-for-Sale.

     Benefits and Expenses

     Interest credited on investment contracts and universal life-type insurance
     decreased $38.8 million or 6 percent, primarily reflecting lower interest
     crediting rates, partially offset by a higher average inforce levels of
     both investment contracts and life products.

     Amortization of DAC decreased $42.0 million or 27 percent reflecting the
     first quarter 2004 net $56.4 million decrease in expenses primarily from
     DAC adjustments in conjunction with SOP 03-1. See the Deferred Policy
     Acquisition Costs section below for discussion of these adjustments.

     IDS Life completed a valuation system conversion for its Long-Term Care
     insurance business during the first quarter of 2004 which resulted in a
     $6.5 million pretax reduction of estimated Long-Term Care liabilities for
     future policy benefits and an offsetting estimated increase of $9.6 million
     in amortization of deferred policy acquisition costs.


                                      -13-
<PAGE>

     The effective tax rate increased to 34 percent in the six months ended June
     30, 2004 from 18 percent in the six months ended June 30, 2003, reflecting
     the December 30, 2003 distribution of substantially all of IDS Life's
     interests in low income housing investments to AEFC and also due to the
     reduction in net deferred tax assets in the second quarter of 2004, both
     of which caused unfavorable tax provision impacts. For 2003 and prior
     years, IDS Life's federal income taxes were reduced by credits arising from
     such low income housing investments.

     Deferred Policy Acquisition Costs

     The costs of acquiring new business, including for example, direct sales
     commissions, related sales incentive bonuses and awards, underwriting
     costs, policy issue costs and other related costs, have been deferred on
     the sale of insurance and annuity contracts. DAC for universal life and
     variable universal life insurance and certain annuities are amortized as a
     percentage of the estimated gross profits expected to be realized on the
     policies. DAC for other annuities are amortized using the interest method.
     For traditional life, disability income and long-term care insurance
     policies, the costs are amortized in proportion to premium revenue.

     Amortization of DAC requires the use of certain assumptions including
     interest margins, mortality rates, persistency rates, maintenance expense
     levels and customer asset value growth rates for variable products. The
     customer asset value growth rate is the rate at which contract values are
     assumed to appreciate in the future. This rate is net of asset fees, and
     anticipates a blend of equity and fixed income investments. Management
     routinely monitors a wide variety of trends in the business, including
     comparisons of actual and assumed experience. Management reviews and, where
     appropriate, adjusts its assumptions with respect to customer asset value
     growth rates on a quarterly basis.

     Management monitors other principal DAC assumptions, such as persistency,
     mortality rate, interest margin and maintenance expense level assumptions,
     each quarter. Unless management identifies a material deviation over the
     course of the quarterly monitoring, management reviews and updates these
     DAC assumptions annually in the third quarter of each year.

     When assumptions are changed, the percentage of estimated gross profits or
     portion of interest margins used to amortize DAC may also change. A change
     in the required amortization percentage is applied retrospectively; an
     increase in amortization percentage will result in an acceleration of DAC
     amortization while a decrease in amortization percentage will result in a
     deceleration of DAC amortization. The impact on results of operations of
     changing assumptions with respect to the amortization of DAC can be either
     positive or negative in any particular period, and is reflected in the
     period that such changes are made.

     During the first quarter of 2004 and in conjunction with the adoption of
     SOP 03-1, IDS Life extended the time periods over which DAC associated with
     certain insurance and annuity products are amortized. In adopting SOP 03-1,
     IDS Life established additional liabilities for insurance benefits that may
     become payable under variable annuity death benefit guarantees or on single
     pay universal life contracts. In order to establish the proper
     relationships between these liabilities and DAC associated with the same
     contracts, IDS Life changed its estimates of meaningful life for certain
     contracts so DAC amortization periods are the same as liability funding
     periods. As a result, IDS Life recognized a $65.7 million valuation benefit
     reflecting the lengthening of the amortization periods for the same
     contracts impacted by SOP 03-1. The SOP 03-1 valuation benefit above was
     partially offset by the pretax $9.6 million DAC reduction* due to the
     valuation system conversion discussed in the Benefits


                                      -14-
<PAGE>

     and Expenses section of Management's Discussion and Analysis of Results of
     Operations for the six months ended June 30, 2004 and 2003.

     DAC balances for various insurance and annuity products sold by IDS Life
     are set forth below:

<TABLE>
<CAPTION>
                                                 June 30, 2004
                                                  (Unaudited)      December 31, 2003
                                                 --------------    ------------------
<S>                                              <C>               <C>
     (Millions)
     Annuities                                   $       1,877     $         1,734
     Life and health insurance                           1,702               1,602
                                                 --------------    -----------------
     Total                                       $       3,579     $         3,336
                                                 ==============    =================
</TABLE>

     In addition to the DAC balances shown above and in conjunction with IDS
     Life's adoption of SOP 03-1, IDS Life had $296 million and $279 million of
     deferred sales inducements costs at June 30, 2004 and December 31, 2003,
     respectively. Sales inducement costs include bonus interest credits and
     premium credits added to certain annuity contract values. IDS Life
     capitalizes these benefit costs to the extent they are incremental to
     amounts that would be credited on similar contracts without the applicable
     feature. The amounts capitalized are amortized using the same methodology
     and assumptions used to amortize deferred policy acquisition costs.

     *This valuation adjustment was an increase to the $92 million estimated
     premium deficiency IDS Life recognized in the third quarter of 2003.

     Impact of Recent Market Volatility on Results of Operations

     Various aspects of IDS Life's business are impacted by equity market levels
     and other market-based events. Several areas in particular involve DAC and
     deferred sales inducement costs, recognition of benefits under guaranteed
     minimum death benefits (GMDB) and certain other variable annuity benefits,
     mortality and expense risk and other fees and structured investments. The
     direction and magnitude of the changes in equity markets can increase or
     decrease amortization of DAC and deferred sales inducement costs, incurred
     amounts under GMDB and other variable annuity benefit provisions and
     mortality and expense risk and other fees and correspondingly affect
     results of operations in any particular period. Similarly, the value of IDS
     Life's structured investment portfolio and derivatives arising from the
     consolidation of certain secured loan trusts are impacted by various market
     factors. Persistency of, or increases in, bond and loan default rates,
     among other factors, could result in negative adjustments to the market
     values of these investments in the future, which would adversely impact
     results of operations. See Liquidity and Capital Resources section for a
     further discussion of structured investments and consolidated derivatives.


                                      -15-
<PAGE>

     Liquidity and Capital Resources

     The liquidity requirements of IDS Life are generally met by funds provided
     by premiums, investment income, proceeds from sales of investments as well
     as maturities, periodic repayments of investment principal and capital
     contributions from AEFC. The primary uses of funds are policy benefits,
     commissions, other product-related acquisition and sales inducement costs
     and operating expenses, policy loans, dividends and investment purchases.
     IDS Life routinely reviews its sources and uses of funds in order to meet
     its ongoing obligations.

     IDS Life has available lines of credit with AEFC aggregating $200 million
     ($100 million committed and $100 million uncommitted). There were no line
     of credit borrowings outstanding with AEFC at June 30, 2004. At June 30,
     2004, IDS Life had outstanding reverse repurchase agreements totaling $5.0
     million. Both the line of credit and reverse repurchase agreements are used
     strictly as short-term sources of funds.

     Investments include $2.5 billion, $2.4 billion and $1.7 billion of below
     investment grade securities (excluding net unrealized appreciation and
     depreciation) at June 30, 2004, December 31, 2003 and June 30, 2003,
     respectively. These investments represent 8.2 percent, 7.7 percent and 5.5
     percent of IDS Life's investment portfolio at June 30, 2004, December 31,
     2003 and June 30, 2003, respectively.

     During 2004, IDS Life continued to hold investments in Collateralized Debt
     Obligation (CDO), some of which are also managed by an affiliate, and were
     not consolidated pursuant to the adoption of FIN 46 as IDS Life was not
     considered a primary beneficiary. IDS Life invested in CDOs as part of its
     investment strategy in order to offer a competitive rate to
     contractholders' accounts. IDS Life's exposure as an investor is limited
     solely to its aggregate investment in the CDOs, and it has no obligations
     or commitments, contingent or otherwise, that could require any further
     funding of such investments. As of June 30, 2004, the carrying values of
     the CDO residual tranches, managed by an affiliate, were $5.5 million. IDS
     Life also has a retained interest in a CDO securitization with a carrying
     value of $531.2 million, of which $395.0 million is considered investment
     grade, as well as an additional $20.7 million in rated CDO tranches managed
     by a third party. CDOs are illiquid investments. As an investor in the
     residual tranche of CDOs, IDS Life's return correlates to the performance
     of portfolios of high-yield bonds and/or bank loans.

     The carrying value of the CDOs, and IDS Life's projected return are based
     on discounted cash flow projections that require a significant degree of
     management judgment as to assumptions primarily related to default and
     recovery rates of the high-yield bonds and/or bank loans held directly by
     the CDO and, as such, are subject to change. Although the exposure
     associated with IDS Life's investment in CDOs is limited to the carrying
     value of such investments, they have additional volatility associated with
     them because the amount of the initial value of the loans and/or other debt
     obligations in the related portfolios is significantly greater than IDS
     Life's exposure. In addition, the derivatives recorded as a result of
     consolidating the three Secured Loan Trusts (SLT) under FIN 46 are valued
     based on the expected performance of a reference portfolio of high-yield
     loans. The exposure to loss as a result of IDS Life's investment in these
     SLTs consolidated under FIN 46 is represented by the pretax net assets of
     the consolidated SLTs which were $713.5 million at June 30, 2004; upon the
     closing of the early liquidation of an SLT as described above, this
     exposure is expected to be reduced by approximately $238.4 million.
     Deterioration in the value of the high-yield bonds or bank loans would
     likely result in deterioration of IDS Life's investment return with respect
     to the relevant CDO or consolidated derivative, as the case may be. In the
     event of significant deterioration of a portfolio, the relevant CDO or SLT

                                      -16-
<PAGE>

     structure containing the consolidated derivative may be subject to early
     liquidation, which could result in further deterioration of the investment
     return or, in severe cases, loss of the CDO or consolidated derivative
     carrying amount.

     OTHER REPORTING MATTERS
     Accounting Developments

     See  "Recently  Issued  Accounting  Standards"  section  of  Note  1 to the
     Consolidated Financial Statements.

     ITEM 4. CONTROLS AND PROCEDURES

     IDS Life's management, with the participation of IDS Life's Chief Executive
     Officer and Chief Financial Officer, has evaluated the effectiveness of IDS
     Life's disclosure controls and procedures (as such term is defined in Rules
     13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
     amended (the "Exchange Act")) as of the end of the period covered by this
     report. Based on such evaluation, IDS Life's Chief Executive Officer and
     Chief Financial Officer have concluded that, as of the end of such period,
     IDS Life's disclosure controls and procedures are effective. There have not
     been any changes in IDS Life's internal control over financial reporting as
     such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
     Act during the fiscal quarter to which this report relates that have
     materially affected, or are reasonably likely to materially affect, IDS
     Life's internal control over financial reporting.

     Forward-Looking Statements

     This report includes forward-looking statements that are subject to risks
     and uncertainties that could cause results to differ materially from such
     statements. The words "believe," "expect," "anticipate," "optimistic,"
     "intend," "plan," "aim," "will," "should," "could," "likely," and similar
     expressions are intended to identify forward-looking statements. Readers
     are cautioned not to place undue reliance on these forward-looking
     statements, which speak only as of the date on which they are made. IDS
     Life undertakes no obligation to publicly update or revise any
     forward-looking statements. Important factors that could cause actual
     results to differ materially from IDS Life's forward-looking statements
     include, but are not limited to: fluctuations in external markets, which
     can affect the amount and types of investment products sold, the market
     value of its separate account assets and related fees received and the
     amount of amortization of DAC; potential deterioration in high-yield and
     other investments, which could result in further losses in IDS Life's
     investment portfolio; changes in assumptions relating to DAC which also
     could impact the amount of DAC amortization; the ability to sell certain
     high-yield investments at expected values and within anticipated time
     frames and to maintain its high-yield portfolio at certain levels in the
     future; the types and the value of certain death benefit features on
     variable annuity contracts; the affect of assessments and other surcharges
     for guaranty funds; the response of reinsurance companies under reinsurance
     contracts; the impact of reinsurance rates and the availability and
     adequacy of reinsurance to protect IDS Life against losses; negative
     changes in IDS Life Insurance Company's and its four life insurance company
     subsidiaries' credit ratings; increasing competition in all IDS Life's
     major businesses; the adoption of recently issued accounting rules related
     to the consolidation of variable interest entities, including those
     involving SLTs that IDS Life invests in, and accounting for guarantees
     under SOP 03-1, both of which could further affect both IDS Life's balance
     sheet and results of operations; and outcomes of litigation. A further
     description of these and other risks and uncertainties can be found in IDS
     Life's Annual Report on Form 10-K for the year ended December 31, 2003, and
     its other reports filed with the Securities and Exchange Commission (SEC).


                                      -17-
<PAGE>


PART II - OTHER INFORMATION

IDS LIFE INSURANCE COMPANY

Item 1.  Legal Proceedings

         The Securities and Exchange Commission (SEC), the National Association
         of Securities Dealers (NASD) and several state attorneys general have
         brought proceedings challenging several mutual fund and variable
         account financial practices, including suitability generally, late
         trading, market timing, disclosure of revenue sharing arrangements and
         inappropriate sales. IDS Life Insurance Company has received requests
         for information and has been contacted by regulatory authorities
         concerning its practices and is cooperating fully with these inquiries.

         In November 2002, IDS Life Insurance Company was named in a purported
         class action entitled John Haritos, et al. v. American Express
         Financial Advisors, Inc. et al., No. 02 2255, United States District
         Court, District of Arizona. The complaint originally named IDS Life
         Insurance Company as a defendant, but IDS Life Insurance Company was
         dismissed when plaintiffs chose to file an Amended Complaint not naming
         IDS Life Insurance Company. This action alleges that defendants
         violated the Investment Advisors Act of 1940, 15 U.S.C., in the sale of
         financial plans and various products including those of IDS Life
         Insurance Company. The complaint seeks certification of a nationwide
         class, restitution, injunctive relief, and punitive damages. Defendants
         have moved to dismiss the action and that motion is pending.

         IDS Life Insurance Company and its subsidiaries are involved in other
         legal and arbitration proceedings concerning matters arising in
         connection with the conduct of their respective business activities.
         IDS Life believes it has meritorious defenses to each of these actions
         and intends to defend them vigorously. IDS Life believes that it is not
         a party to, nor are any of its properties the subject of, any pending
         legal or arbitration proceedings that would have a material adverse
         effect on IDS Life's consolidated financial condition, results of
         operations or liquidity. However, it is possible that the outcome of
         any such proceedings could have a material impact on results of
         operations in any particular reporting period as the proceedings are
         resolved.

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

                  See Exhibit Index on page E-1 hereof.

         (b) Reports on Form 8-K.

                  Form 8K, filed May 17, 2004, Item 5, reporting that on May
                  17, 2004 IDS Life Insurance Company appointed Dave K.
                  Stewart as Principal Accounting Officer, replacing Jeryl
                  Millner.

                                      -18-
<PAGE>



                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                        IDS LIFE INSURANCE COMPANY
                                        ---------------------------
                                              (Registrant)






Date:  August 3, 2004             By /s/ Mark E. Schwarzmann
                                     -------------------------------------------
                                         Mark E. Schwarzmann
                                         Director, Chairman of the Board and
                                         Chief Executive Officer




Date:  August 3, 2004             By /s/ Arthur H. Berman
                                     -------------------------------------------
                                         Arthur H. Berman
                                         Director and Executive Vice President -
                                         Finance and Chief Financial Officer


                                      -19-
<PAGE>

                                  EXHIBIT INDEX


The following exhibits are filed as part of this Quarterly Report:


Exhibit                                 Description


31.1       Certification of Mark E. Schwarzmann pursuant to Rule 13a-14(a)
           promulgated under the Securities Exchange Act of 1934, as amended.

31.2       Certification of Arthur H. Berman pursuant to Rule 13a-14(a)
           promulgated under the Securities Exchange Act of 1934, as amended.

32.1       Certification of Mark E. Schwarzmann and Arthur H. Berman pursuant
           to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
           the Sarbanes-Oxley Act of 2002.


                                       E-1