Can I Cash In My Variable Life Insurance Policy? 
There may ordinary income tax consequences , possible IRS penalties and surrender charges . If you have gain in the policy , you 'll pay ordinary income tax . If the variable life insurance policy was issued as a modified endowment contract and you cash it in before age 59 1/2 , the may be a 10 % penalty . There may also be surrender charges in the first 9 to 15 years . Determine these ramifications first before moving cashing it in . You may be able to borrow policy loans , that could be an alternative to losing your coverage by cashing in your policy . 