1035 Exchange Rules and Ideas:

The IRS allows you to exchange an insurance contract for a new life insurance contract insuring the same person without paying tax on the investment gains earned on the original contract. This can be a substantial benefit. This is governed by Section 1035 of the IRS code and are called 1035 Exchanges.

This benefit comes with some important IRS guidelines:

• 1035 exchange code says that the old insurance policy must be exchanged for a new policy.  You cannot receive a check and apply the proceeds to the purchase of a new insurance policy.
• A life insurance policy to another life insurance policy
• Life insurance policy to an annuity
• You cannot exchange an annuity contract for a life insurance policy

Reasons to Exchange:

• Flight to quality with a new carrier
• Improved Insurability…Meaning you stopped smoking or lost weight
• Better rate of return
• Ownership changes or problems
• Changes in your financial situation
• You currently have too many policies and want to consolidate
• Better features and benefits with a new policy

If you have a policy that you feel meets a reason for exchange, we can help you do a 1035 exchange and will not trigger any tax consequences for you. Contact Us.  Ginn Insurance would enjoy helping you.

• We’ll help compare your current contract with other available options.
• Once you decide to exchange the contract, we can facilitate the completion of the new insurance company’s 1035 exchange and replacement forms, etc.