What Happens When You Cancel Universal Life Insurance? 
That is a great question ! There are a couple of ways this could go . By surrendering it , you will have no more insurance coverage , so you first want to consider having another policy in force before doing away with this one . Secondly , if it has any kind of cash value over what you 've paid into it , that growth amount is taxable . If you are considering the surrender to take the cash out of it , then you want to consider the tax implications.If it 's sizable , you may end up in a higher tax bracket for the year , as well as giving away a sizable portion back to Uncle Sam . Perhaps a loan from it , and keeping the coverage would make more sense . If you 're surrendering because it is tanking , and will soon cost you more than you 're willing to spend on it , then your main issue will then be the loss of coverage . Check with your adviser to see how the surrender of the policy will affect you , before acting , okay ? Thanks for asking ! 