A 1035 exchange disclosure is the set of written notices carriers and agents provide to compare an existing policy or annuity to a proposed contract during a 1035 replacement. The disclosure outlines reasons for replacement, surrender charges, new fees, features, guarantees, and the effect on cash value, death benefit, riders, and timelines. It supports suitability and state replacement rules (often based on NAIC models) and helps clients understand trade-offs before authorizing the exchange. Accurate disclosures reduce compliance risk and ensure the client's decision is informed,documented, and aligned with stated financial objectives.

Carriers and agents present a 1035 exchange disclosure during replacements to compare the existing contract with the proposed one. Advisors walk clients through surrender charges, fees, riders,guarantees, and performance histories, then record the stated reason for replacement. Compliance Reviews confirm the exchange is suitable and in the client's best interest. The disclosure, often paired with NAIC replacement forms, becomes part of the permanent file and evidences informed consent. This process helps prevent misunderstandings and supports regulators' expectations for transparency when clients upgrade, consolidate, or re-align life insurance or annuity contracts.