The National Directory of Certified Public Accountants

Ask A CPA - Insurance

Is The Exchange Of One Insurance Policy For Another One Taxable ?

The exchange of one life insurance policy for another one is considered a tax free exchange. Also an exchange of a annuity contract for another anuity contract with identical recipients is a tax-free exchange. A endowment policy for another endowment policy that provides for regular payments beginning no later than the date payments would have started under the old policy is considered a tax-free exchange.

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