SECTION 1035 TAX FREE EXCHANGE

The most common reason why an old life insurance policy or old annuity policy is exchanged for a new life insurance policy or new annuity policy is because newer policies often perform much better than old insurance policies, due to improvements in mortality costs, reductions in policy administration expense, improvements in underwriting, improvements in the insureds health, improved interest crediting, higher potential dividends, and increased interest linked to an index. In some cases, worsening health can result in higher annuity income payments by making an exchange... In some cases, premiums are lower, and in others the accumulation of cash values will be higher. Plus, we have many improvements in policy design. To take advantage of pricing and design improvements, one may want to cash out of an old policy and purchase a new one... Another good reason to exchange an old policy for a policy is the interest rate the company credits on the policy values, as well as how the interest..

Also known as: section 1035