Can I Draw Money From My Life Insurance? 
Permanent life insurance has two products that accumulate cash values : Participating whole life insurance and universal life insurance . Borrowing from participating whole life insurance has two types of policy loans that charge interest : spread loans and direct recognition loans . But before you borrow via loans that will cost you money , take the dividends up to your basis -LRB- your contributions -RRB- free of charges . Universal life -LRB- UL -RRB- has three cash value accumulating contracts : Current Assumption Interest Rate UL , Indexed UL and Variable UL . There are four different policy loan provisions that most UL use . Zero net cost loans , wash loans , spread loans and participating loans . But before you borrow via loans that will cost you money , take your basis first -LRB- your contributions -RRB- free of charges . But be advised taking basis first could trigger an ordinary income tax event for policies dated after June 21 , 1988 . Consult your tax adviser before moving forward accessing you policy using withdrawals . One last thought : Policy loans are not treated as taxable income providing that the policy is kept in force for the life of the insured , i.e. until the insured dies . If the policy is surrender or lapses out of coverage , an ordinary income tax event will occur for policy loans received and internal policy loans that have accumulated . Consult your tax adviser before surrendering or allowing your policy to lapse . 