1035 exchange

Definition

A tax-sheltered exchange of cash value from one life insurance policy to another. This allows an individual to avoid capital gains or losses in the first policy as long as the second policy is of greater or equal cost.

Use 1035 exchange in a sentence

The 1035 exchange was interesting to check out and I wondered what it would mean for the business we were in.

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I've decided to consolidate my policies and utilize a 1035 exchange as laid out in all of my paperwork which was given to me by my agent.

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Because my mother did not want to pay increased taxes, but also realized the competitor's life insurance policy was superior, she went through a 1035 exchange to shift her policy over to them.

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1031 tax-free exchange 1040