Final Answer:
All of the following are transactions that qualify as a 1035 exchange, except: D - An equity indexed annuity into a variable annuity.
Step-by-step explanation:
A 1035 exchange refers to the provision in the Internal Revenue Code that allows for the tax-free exchange of one insurance or annuity contract for another. This exchange is typically done to facilitate a change in insurance or investment options without triggering immediate taxation.
A. A traditional whole life policy into a universal life policy - This is a valid 1035 exchange as both are life insurance policies.
B. An equity indexed annuity into a variable universal life insurance policy - This is a valid 1035 exchange as it involves exchanging one type of annuity (equity indexed) for a different type of life insurance policy (variable universal life).
C. A variable annuity into a fixed annuity - This is a valid 1035 exchange as it involves exchanging one type of annuity (variable) for another type of annuity (fixed).
D. An equity indexed annuity into a variable annuity - This is not a valid 1035 exchange. A 1035 exchange must involve exchanging one insurance or annuity contract for another, and variable annuities and equity indexed annuities are both considered annuities.
In summary, the correct answer is D. An equity indexed annuity into a variable annuity.