Can You 1035 Exchange From Life Insurance To An Annuity? 
Yes , you can do a Section 1035 exchange from a life insurance contract to an annuity , just not the other way around . Section 1035 permits the policy owner to trade certain kinds of contracts for another on a tax-free basis . The following types of exchanges are allowed under Section 1035 : Life contract for life contract Life contract for annuity contract Life contract for endowment contract Annuity contract for annuity contract Endowment contract for endowment contract Since 2010 , it is also possible to exchange a life , annuity , or endowment contract for a long-term care contract or exchange one long-term care contract for another long-term care contract . 