1035 Exchange

If you have been in an annuity for some time, you should have your policy reviewed. If your product has underperformed, offers little as far as an income benefit, or is expensive, it may be time for change. You can make this change tax free. That is, you can purchase a new annuity with the cash value of the old. This is a 1035 exchange. I will only do such an exchange if it is worth it. Far too often, agents push people into making these exchanges in order to generate additional sales and commissions. If you are thinking of making a change or a broker/agent is recommending an exchange, consult with us first. Don’t lock your money up for another extended period time just because your agent is looking for a sale.

Another type of exchange you can make that is often overlooked is moving your cash value in your whole life policy into an annuity. I obviously can’t tell you whether this is a good or bad idea. It depends on your situation. Often, the need for life insurance later in life decreases. If you are holding a policy with a cash value and no longer need the additional insurance, you may want to think of converting the policy into an asset with a future income benefit. This exchange is also tax free.