What Happens When You Cancel Universal Life Insurance? 
You have a few options when cancelling a universal life insurance policy . First , you can use the cash value to purchase a paid up death benefit so you will have a life benefit to your beneficiary at your death . Second , you can cancel the death benefit and take the cash value which the growth is subject to tax on the gains . Last you can borrow some of the cash value tax free and keep the death benefit intact . I suggest speaking to your trusted advisor or insurance company to get the specifics of your options before making this decision . 