To accomplish a 1035 Exchange, the insured applies for a new policy with Symetra and assigns the old policy to us. We initiate a surrender of the old policy when the new Symetra policy is approved as applied for. We apply the cash values to the new policy. There are several points to note carefully when making a 1035 exchange:
- The policy being exchanged must be a life insurance contract, not an endowment or an annuity.
- The insured must still be insurable at the time of application.
- Complete the LU-674 Absolute Assignment form and send it with the application.
- The old policy must be in force and kept in force until the transaction is complete (new policy issued, and surrender value received and applied from the old policy.) For a No Cash Exchange we will keep a file open for as long as 6 months, to complete the surrender of the old policy.
- While awaiting the surrender value from the old policy, which can take several months, the policyowner must pay premiums on the new policy to keep it in force. (NOTE: Our special No Cash 1035 Exchange program eliminates this step for our universal life policies.)
- After the transaction is completed, the policyowner must maintain sufficient cash value to keep the policy in force and service the loan, if applicable.
- The no-cash exchange option is available using Symetra's universal life products.
- When the surrender value is received on a No Cash Exchange, we will deduct the cost of insurance and other charges due, to date, when we receive the surrender value from the other company.
See Replacement for further information.