Types of 1035 Tax Free Exchanges

There are several types of “ten thirty-five exchange” or “1035 exchange” between certain insurance contracts.

They include:

  • An existing life insurance policy for a new life insurance policy, or
  • An existing life insurance policy for a new annuity policy, or
  • An existing life insurance policy for a new qualified long term care policy, or
  • An existing annuity policy for a new annuity policy, or
  • An existing annuity policy for a new qualified long term care policy, or
  • An existing qualified long term care policy for a new qualified long term care policy.

All of these types of exchanges are tax-free as long as the proper procedures are followed. This is where an experienced life insurance agent can help.

1035 Exchanges generally do not apply to any term life insurance, although there are some exceptions.

WARNING: One cannot transfer an annuity to a life insurance policy, under Section 1035, although there is a method where an annuity can be used to pay for a new life insurance policy, and we can show you how, as well as why this may be a suitable solution to certain taxing problems. If you have an annuity, and want to use your annuity values to pay new or existing life insurance premiums, then you should contact us today.

For a FREE initial consultation, call today: (800) 680-5596

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