What Is 1035 Exchange In Life Insurance? 
Section 1035 exchange is a class of financial transaction in which a life insurance or annuity policy is replaced for a new one without any taxable event . There are several classes of exchanges under Section 1035 of the Internal Revenue Code . Section 1030 group of exchanges is a series of tax codes that applies to the tax free situations . Some basic requirements include provisions such as the new policy must be owned by the same individual as the old policy and the new policy must have the same or greater face value . 