A 1035 annuity or life insurance exchange is a rule under Section 1035 of the Internal Revenue Code that allows for a tax-free exchange of a life insurance or annuity policy for a different annuity or life insurance contract that is better suited to an investor’s needs.

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     Years after purchasing an annuity, life insurance policy, long-term care product, or endowment, a policyholder might determine that the policy is not the best fit for their circumstances, personal or economic. To cover this situation, the Internal Revenue Service (IRS) created the 1035 exchange so that the funds can be transferred without triggering tax expenses.

 

     We can advise on whether your changing life circumstances would merit this change!