1035 Tax-Free Exchange – Convert Your Old Annuity Contract Into a Combination Annuity and Long Term Care Contract
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The Pension Protection Act of 2006 added additional flexibility to Internal Revenue Code 1035. Applying these concepts allows annuity contract owners and life insurance policy owners to purchase a new product by using the money inside of their old products. The process is oftentimes described as a “1035 exchange”. More importantly, 1035 exchanges are tax-free and the benefits of the new policy are tax-free.
