Which of the following statements is true regarding a Section $1035$ exchange of life insurance policies?

Select one

A$.$

If Theo enters into a $1035$ exchange of his whole life policy for a variable life policy there will be no tax on the exchange and the cost basis will carry

over from the old policy to the new policy.

B$.$

Apollo, who has surrendered his universal life policy, can accomplish a $1035$ exchange by using the cash surrender value to purchase another life

insurance policy within $60$ days of surrender.

C$.$ Lucas can make a $1035$ exchange of a policy on his life for a policy on the life of his spouse.

D$.$ Athena can exchange her annuity for a life insurance policy under a Sec. $1035$ exchange.