The key point is that, as life circumstances change over time, tools like permanent life insurance may no longer meet an individual’s needs. And while other strategies like taking a policy loan or simply surrendering the policy might be viable in some circumstances, a 1035 exchange into an annuity can be a more tax-efficient way to access the policy’s underlying value when the need for life insurance is replaced by a need for retirement income. Because ultimately, spreading the tax impact of withdrawing the funds over several years usually results in a lower overall tax burden, allowing the owner to keep more of the funds to use as they like!<\/p>\n