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Grim Reaper

Cash Out Life Insurance

You need money for bills and more income so... you want to cash out all or part of your life insurance policy.

If you cash out your life insurance policy, you'll have to pay income tax on any amount you receive above what you paid in premiums.

Although because of the fees etc. you might not pay any at all. Check first.

If you have a variable or universal life insurance policy, you can take out as much as the amount that you've paid without owing any taxes.

You're only taxed on what you've earned and not the full value.

If you do the math and think that the amount of predetermined tax is too high for you, you could borrow against most of your cash value.

If you borrow on it and die before repaying the loan, the balance due gets subtracted from the death benefit and not taxed.

This idea of borrowing can have it's own problems because you will have to pay interest on the loan and you'll still be alive and have to pay for insurance you don't need anymore. Not so good...maybe.

There are many more rules that are detailed. I won't pretend to know it all, but as a general rule you can say.

You can get money out of the Life insurance policy.

You can borrow on a life insurance policy.

Think before you jump at the chance to seize a lot of cash.

Here are some good links.,3254,11290,00.html This is a good article, as well.

In the end if you have a huge amount at stake perhaps you should see an accountant or lawyer who is familiar with this area of practice.     panic button