Section 1035 Exchange

What Does Section 1035 Exchange Mean?
A tax-free exchange of an existing annuity contract for a new one.

Investopedia explains Section 1035 Exchange
In order for the new contract to qualify as a Section 1035 Exchange, the policyholder must have exchanged his or her existing contract for an equivalent new contract. The annuitant or policyholder must also remain the same. Application of a check received for the old contract against the new contract does NOT qualify.

Related Terms

Annuitant
Annuity
Eligible Rollover Distribution
Endowment
Internal Revenue Service - IRS
Life Insurance
More Related Terms

Related Links

Update Your Variable Annuity With Section 1035 - Thanks to a special tax code clause, you can surrender a variable annuity without paying income tax.
Taking The Bite Out Of Annuity Losses - If this investment product has caused you sleepless nights, it's time to consider alternatives.
Find High Yield CDs - Retire in style. Search for the 100 highest yielding CD's from Bankrate.com. Click Here!
Passing the Buck: The Hidden Costs of Annuities - These may look like good retirement vehicles, but beware of fees buried in the fine print.

Rate this Term: Your Rating: Overall Rating: Vote Now!