Section 1035 Exchange

Dictionary Says

Definition of 'Section 1035 Exchange'


A tax-free exchange of an existing annuity contract for a new one.

Investopedia Says

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.

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