FEE WAIVER AGREEMENT

American Express Financial Corporation ("AEFC") agrees to waive fees and
reimburse certain expenses and AXP Variable Portfolio - Core Bond Fund (the
"Fund"), a series of AXP Variable Portfolio - Income Series, Inc., agrees to
accept those waivers and reimbursements, as described below:

     1.   Applicable  Agreements.  To the extent that the Fund's total  expenses
          exceed the expense ratios set out in paragraph 2, AEFC agrees to waive
          fees and reimburse certain expenses under the following agreements:

          o    Investment  Management  Services  Agreement  between the Fund and
               AEFC dated July 10, 2003.

          o    Administrative Services Agreement between the Fund and AEFC dated
               July 10, 2003.

AEFC also agrees to pay certain non-advisory expenses of the Fund if necessary
to meet the expense ratio limits set out in paragraph 2. AEFC will determine the
allocation of fee waivers and expense reimbursements among the applicable
agreements.

     2.   Fee Caps. AEFC agrees to waive fees and reimburse  certain expenses to
          the extent  that total  expenses  exceed  0.95% of the Fund's  average
          daily net assets.


     3.   Termination.  This  agreement will terminate on August 31, 2005 unless
          extended by written agreement of the Fund and AEFC.


     This agreement is dated as of the 1st day of September, 2004.

     AXP Variable Portfolio - Income Series, Inc.
         AXP Variable Portfolio - Core Bond Fund


         By: /s/  Leslie L. Ogg
             ----------------------
                  Leslie L. Ogg
                  Vice President

     AMERICAN EXPRESS FINANCIAL CORPORATION



         By: /s/  Paula R. Meyer
             ----------------------
                  Paula R. Meyer
                  Senior Vice President and General Manager- Mutual Funds