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  4. Is the exchange of one life insurance policy for another one taxable?

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

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