Can I Withdraw Money From My Life Insurance?

Shawn Plummer

CEO, The Annuity Expert

Can I Withdraw Money From My Life Insurance?

Yes, you can withdraw money from your life insurance policy, but the ability to do so depends on the type of policy you have:

  1. Permanent Life Insurance:
    • This includes whole life, universal life, and variable life insurance policies.
    • These policies have a cash value component that grows over time.
    • You can withdraw money from the cash value or take a loan against it.
    • Withdrawals may be tax-free up to the amount of premiums paid.
    • Excess withdrawals could reduce the death benefit.
  2. Term Life Insurance:

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Understanding Life Insurance Withdrawals

  • Withdrawal Limits: Check how much you can withdraw without affecting the death benefit.
  • Tax Implications: Understand potential taxes on earnings above the premiums paid.
  • Interest Rates: Loans against permanent policies may have interest rates.
  • Policy Lapse Risk: Excessive borrowing or withdrawals can lead to policy lapse.


Understanding your life insurance policy’s terms is crucial when considering withdrawals. Permanent life insurance policies offer flexibility for withdrawals or loans, while term life insurance typically does not. Be aware of the impact on death benefits and potential tax implications.

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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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