Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?

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Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?

Section 1040 exchange
Section 1035 exchange
Nonforfeiture Option
Spendthrift Option

Answer: Section 1035 exchange

Life Insurance Premiums Proceeds and Beneficiaries

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