IRS Section 1035 exchanges
One unique tax advantage with annuities is that you can transfer money from one annuity to another annuity income tax-free.
The section in the Internal Revenue Code that allows this is section 1035(a). However, great care should be given.

Here are 5 Important Steps to 1035(a)

1. Assign the old annuity contract (if premiums are non-qualified) to the new insurance company.
2. Exchange the annuity (partial transfers may be acceptable under certain conditions).
3. If there are loans outstanding, repay loans before exchanging.
4. Parties designated in the old contract as owner, annuitant, and beneficiary should again be designated in the new contract.
5. Customers should consult with their tax advisor before the exchange.