Unlock the Value: How to Access the Cash in Your Life Insurance Policy

This is the simplest, but often the least desirable, method.

·        How it Works: You cancel your policy, and the insurance company pays you the CSV.

·        The Catch: Your life insurance coverage ends, leaving your family unprotected. Plus, if the cash you receive is more than the total premiums you’ve paid in, that extra money is treated as taxable income.

This option allows you to access cash while keeping your policy active.

·        How it Works: You borrow up to 90% of the CSV directly from the insurance company.

·        The Impact: Interest is charged on the loan balance. If you die or surrender the policy, the loan balance plus interest is subtracted from the policy’s payout (the Death Benefit or the remaining CSV).

This is often the most strategic way to get cash without disrupting your policy’s growth or tax status.

·        How it Works: You use your CSV as collateral for a loan from a bank or credit union.

·        Key Advantage: Because you’re taking a loan from a third party, it avoids triggering an immediate tax event. Your full cash value remains inside the policy, where it can continue to grow tax-free.

·        Other Benefits: The interest you pay on the loan may be tax-deductible. For business owners, some of the insurance premiums may also be deductible. Banks favor these loans because the CSV is a stable, predictable asset, making the loan easy to secure.