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Which of the following statements regarding 1035 exchanges is NOT correct?

A) A universal life insurance policy may be exchanged for a fixed deferred annuity tax-free, and the deferred annuity thereafter becomes subject to regular annuity taxation rules. B) A life insurance policy that is a modified endowment contract (MEC) may be exchanged for a new life insurance policy and, provided that premiums are paid for at least 7 years thereafter, no longer be considered a ME C) In order for an exchange of policies to qualify for Section 1035 treatment, the exchange of policy values must be made directly between insurers. D) A deferred annuity may be exchanged for an immediate annuity with no immediate tax consequences, but annuity benefit payments are subject to taxation under annuity taxation exclusion ratio rules.

Juan only has a high school education and knows very little about digital cameras. Juan will most likely:

A) conduct only an internal search B) refer the decision to someone else C) not engage in an extensive external search for more information D) engage in an extensive external search for information