1035 Exchange and Universal Life Insurance From United of Omaha Life Insurance Company or Companion Life Insurance Company

Simply put, a 1035 Exchange is a provision in the US tax code that allows a person to directly transfer insurance funds from one policy to another. Instead of having to cash out the policy and pay taxes on accumulated value, the money can be moved directly into the new insurance policy without paying taxes. This financial strategy is often used with universal life insurance policies.

The 1035 Exchange rule applies to life insurance, endowments, and annuity policies. As long as the exchange is taking place between two policies in the same category (as in, insurance to insurance), it is covered by the rule.

Advantages of a 1035 Exchange

If you have an outdated life insurance policy, the 1035 Exchange can help you make the transition to a newer policy. Without the 1035 rule, a person would have to pay taxes on the transfer from policy to policy, if there was any taxable income involved. The tax-free transfer can save you money, especially on a policy that had accumulated cash value.

1035 Exchange Rules

A 1035 Exchange of life insurance isn't always simple. Like many tax related issues, a 1035 Exchange can be complex. It is recommended that you seek out the help of a professional and your licensed insurance agent for advice and guidance if you wish to make use of the 1035 Exchange rules with your life insurance decisions.

1035 Exchange and Guaranteed Universal Plus Life Insurance

Our Guranteed Universal Life Plus life insurance policy works well with a 1035 Exchange. Talk with one of our local licensed insurance agents for more information.