Can I Withdraw My Cash Value From Life Insurance?

Shawn Plummer

CEO, The Annuity Expert

Understanding Cash Value Withdrawal

Yes, you can withdraw the cash value from your life insurance policy. This option is typically available in permanent life insurance policies like whole life or universal life insurance.

Considerations Before Withdrawing

  1. Tax Implications: Withdrawals may be subject to taxes if the amount exceeds what you’ve paid in premiums.
  2. Impact on Death Benefit: Withdrawing cash value can reduce the death benefit for your beneficiaries.
  3. Possible Surrender Charges: Some policies have surrender charges for early cash value withdrawals.

Alternative: Loan Against the Policy

  • Advantages: Taking a loan against your policy’s cash value may offer tax benefits and doesn’t reduce the death benefit as long as the loan is repaid.
  • Interest Rates: Be aware of the interest rates on policy loans, which can impact the loan’s cost.

Comparing Withdrawal and Loan Options

FeatureCash Value WithdrawalLoan Against Policy
Impact on Death BenefitMay ReduceNo Reduction (if repaid)
Tax ImplicationsPossible Taxes on GainsGenerally Tax-Free
Repayment RequiredNoYes
Interest ChargesNoneApplicable


When considering accessing the cash value in your life insurance, evaluate both withdrawal and loan options. Each has its pros and cons, impacting your policy and finances differently. For personalized advice and to explore the best option for your situation, contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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