Scott purchased a life insurance policy to insure that his kids were taken care of In the event of his untimely death. Since they are now grown, he feels he no longer needs the life insurance. He would like to exchange it for an annuity that can provide him additional income for his golden years. Which of the following is correct? This transaction is prohibited by the IRS He can make the exchange, but it will be taxable to the extent of the cash value less the additional money he puts into the annuity. He can make the exchange, which will not be taxable. He can make the exchange, but it will be taxable to the extent of the cash value