Series 24: 3.8.7.3. 1035 Exchanges

3.8.7.3.  1035 Exchanges

Section 1035 of the Internal Revenue Code allows annuity holders to exchange one annuity contract for another without suffering any tax consequences. While 1035 exchanges may seem like a great deal for the client, representatives need to be sensitive to the fact that some exchanges may not be ultimately beneficial for the client.

Both fixed and variable annuity contracts usually contain surrender periods. A surrender period is the length of time that the client must wait before withdrawing mo