What Life Insurance Can You Cash Out?

Life insurance isn’t just about protecting your loved ones after death — some policies allow you to access funds while you’re still alive. Understanding which policies offer this feature can help you make better financial decisions.

Types of Life Insurance You Can Cash Out

1. Whole Life Insurance

Whole life insurance is a permanent policy that combines a death benefit with a savings element called cash value. Over time, this cash value grows at a guaranteed rate. You can:

• Withdraw Funds – Access a portion of the cash value, though it may reduce your death benefit.

• Take a Loan – Borrow against the cash value with relatively low interest rates; unpaid loans reduce the benefit.

• Surrender the Policy – Cancel the policy and receive the accumulated cash value, minus any fees.

2. Universal Life Insurance

Universal life insurance offers flexible premiums and a cash value component that earns interest. You can:

• Adjust Premiums – Use your cash value to cover premium payments.

• Withdraw or Borrow – Access funds as needed, similar to whole life policies.

• Surrender the Policy – Cancel and receive the remaining cash value.

3. Variable Life Insurance

Variable life insurance allows you to invest the cash value in various sub-accounts, similar to mutual funds.

• Investment Growth – Offers higher potential returns, but also higher risk.

• Access Funds – Withdraw or borrow depending on market performance.

• Surrender – Cancel and receive current market-based cash value (minus any applicable fees).

Policies Without Cash-Out Options

Term Life Insurance

Term life provides coverage for a specific period (e.g., 10, 20, or 30 years) and does not build cash value.

• No Cash Value – No borrowing or withdrawal options.

• No Surrender Value – The policy simply expires if outlived.

Alternatives to Cashing Out

If you’re looking to access money from your life insurance but don’t want to cancel the policy, consider:

• Policy Loans – Borrow from the cash value without a credit check.

• Withdrawals – Take a portion of the value, which may affect your death benefit or taxes.

• Life Settlements – Sell your policy for a lump sum that’s more than the surrender value but less than the death benefit.

Ready to Explore Your Options?

If you’re curious about accessing funds from your life insurance or want to review your current policy, fill out the form below to receive an instant quote in seconds. Discover which policies match your financial goals and offer the flexibility you need.