A whole life insurance policy can be cashed in at any time. This will provide you with a cash surrender value, which is the cash value based on the premiums already paid into the policy and any dividend value added. If you choose to cash out the policy you are entitled to this cash value but there are limits to what you will actually be provided with. When cashing out the whole life insurance policy you have to be aware of the total value and the net value of the cash held. Your net value is the amount left after deductions that are required when a policy is to be surrendered; these will be stipulated in the policy itself. If the policy is more than 10 years old the surrender charges will either be low or non-existent as the surrender value decreases over time. When cashing out you will lose the whole life insurance. If you require further insurance you will have to re-apply. Your cash surrender value is the amount of money that exists to pay any death benefit claims. This will no longer be a valid insurance policy after this as you will have removed the cash being used to create this benefit.
The amount of money you get from cashing out your policy will be non-taxable up until the value you have paid in. Any other value above that that was created by the investment side of the policy will be a taxable amount. When considering cashing out your whole life insurance policy it is always advisable to try to keep it instead of cashing it fully out. Remember you can borrow cash amounts from the policy as long as you borrow only below the amount the policy stands at at that point. This means you will still have the whole life insurance policy for your future; you will just have to repay the money that had been borrowed. This amount borrowed will also be non-taxable as long as the policy is still in effect and valid.