Frequently Asked Questions -- Variable Deferred Annuity

• Is a Variable Deferred Annuity just for people who are close to retirement age?
• What type of tax-qualified accounts can I fund with a Variable Deferred Annuity?
• How do I go about funding my Variable Deferred Annuity?
• Can I change how my money is invested after I choose my initial mix of subaccount funds?
• What happens to my Variable Deferred Annuity when I'm ready to retire?
• What happens if I die before I elect to receive these income payments?
• Can I access the money in my Variable Deferred Annuity if I need it before retirement?
• What is the Interest Advantage Program? .

Is a Variable Deferred Annuity just for people who are close to retirement age?

Not at all. Actually, younger people have a longer time period in which to plan and invest for retirement. So if they choose to invest in a stock-oriented subaccount fund, they will have more time to ride out the market's low points and benefit from the potentially higher growth, regardless of age.

What type of tax-qualified accounts can I fund with a Variable Deferred Annuity?

A Variable Deferred Annuity can be used to fund a Traditional IRA, Roth IRA, Simplified Employee Pension plan (SEP), Profit Sharing Plans, Safe Harbor 401(k), or TSA/403(b) plan.

In a tax-qualified retirement plan, federal income tax deferral is provided by the tax-qualified retirement plan. No additional tax deferral is provided by an annuity. You should contact your attorney or tax advisor for more complete information.

How do I go about funding my Variable Deferred Annuity?

You'll have the option to pay a minimum initial premium or make periodic premium payments over time. Also, you can add money whenever you wish. Keep in mind that there may be premium limits spelled out within the policy. See your registered State Farm® agent for details.

Can I change how my money is invested after I choose my initial mix of subaccount funds?

Yes, it's your money, so you can invest it as you wish (subject to certain limitations). Also, you can shift money among your investment funds without having to pay federal income taxes on your earnings. This flexibility is important because you may want to adjust your investment mix to meet changing needs.

What happens to my Variable Deferred Annuity when I'm ready to retire?

You can withdraw all of your account value at one time, or you can designate a specific amount to be paid to you at regular intervals. You even have the option to receive income payments that are guaranteed to last your lifetime.¹

¹All guarantees based on the claims-paying ability of the issuing State Farm life insurance company.

What happens if I die before I elect to receive these income payments?

Future Income Flex provides a death benefit guarantee¹, so your beneficiaries are protected. That's because a minimum death benefit value is locked in. Your family would receive the current market value of your underlying investment funds, the amount you paid in premiums less withdrawals, or the maximum anniversary value (plus additional premiums paid and less withdrawals) -- whichever is greatest.

¹Based on the claims-paying ability of the issuing State Farm life insurance company.

Can I access the money in my Variable Deferred Annuity if I need it before retirement?

Except when the Variable Deferred Annuity funds a Tax-Sheltered Annuity as described below, you can make a partial withdrawal at any time, or surrender your policy entirely. Please keep in mind, however, that surrender charges may apply if you make a withdrawal or surrender your policy within the first eight years after opening your policy. Also, partial withdrawals and surrenders may reduce your policy's death benefit and may be subject to income tax and to a penalty tax.² If your variable annuity is used as funding for a Tax-Sheltered Annuity (TSA) under Internal Revenue Code section 403(b), your right to make withdrawals is limited as provided by federal tax law applicable to TSAs. Please refer to the policy's TSA endorsement for a description of the withdrawal limitations. See your registered State Farm agent for details.

²A 10 percent tax penalty may apply for withdrawals from tax-qualified products and/or non tax-qualified annuities before age 591/2.

Investment return and principal value will fluctuate and your account value, when redeemed, may be worth more or less than the premiums you paid.

State Farm Variable Products are available through prospectus by registered representatives of State Farm VP Management Corp., One State Farm Plaza, Bloomington, Illinois 61710, 1-888-702-2307.  Please read the prospectus and consider the investment objectives, risks, charges, expenses and other information it contains about State Farm Variable Products carefully before investing.

Investing in a variable annuity is generally suitable for long-term investing such as retirement savings. You should consider your financial situation before investing.

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