1035 exchanges are one of the easiest and most common ways you can access PPLI or PPVA using an insurance policy or annuity you already own.
IRC Section 1035 allows the tax-free exchange of a life insurance policy for another life insurance policy. Your previously funded life insurance policy can be exchanged tax-free, for a Private Placement Life Insurance (PPLI) policy.
1035 exchanges also apply to annuities. You can exchange an annuity you currently own for a Private Placement Variable Annuity (PPVA).
Section 1035 states that these exchanges can occur without any tax gain or loss being recognized to the owner. Furthermore in the case of an annuity, the cost basis of the original annuity will be maintain in a 1035 exchange to a new annuity.
Contact us to learn about how you can use a 1035 exchange to access PPLI or PPVA today
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This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. We are not a law firm or a substitute for a law firm or an attorney. We do not provide legal advice of any kind or legal strategies, opinions or rights. Private Placement Life Insurance and Annuities are unregistered products and are not subject to the same regulatory requirements as registered products. As such, Private Placement Life Insurance and Annuities can only be offered to accredited investors or qualified purchasers as described by the Securities Act of 1933.
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