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Can you access funds in a life insurance policy?

Term LifeWhole LifeUniversal Life
Variable Universal LifeAccidental DeathFinal Expense Life

How do I access my policy's cash value?

If you own a permanent life insurance policy, such as whole, universal or variable universal life, your policy has the potential to build up a cash value. You can access these funds through withdrawals and loans.

Withdrawals and policy loans can only be made in accordance with policy provisions and if the policy has accumulated sufficient cash value.

Policy Withdrawals

One way of accessing your cash value is to withdraw a certain amount of money from your life insurance policy. The amount available to be withdrawn will differ depending on the type of policy that you own. Withdrawals are tax-free up to the basis in the policy.1 Depending on the policy provisions, withdrawals may be subject to partial surrender charges if they occur during a surrender charge period and will reduce the death benefit.

Policy Loans

An alternative to accessing funds from your life insurance policy is to take a loan. The interest charged on the loan is generally lower than interest rates charged by banks. However, although the loan does not have to be repaid before death, any unpaid balance on the loan will be deducted from the policy's death benefit. This could financially harm your beneficiaries if he or she is counting on a certain amount of money from the policy for paying off funeral expenses or outstanding debt.

More frequently asked questions (FAQs) on life insurance: