How to Cash in a Whole Life Insurance Policy

by Tim Plaehn

A whole life insurance policy accumulates a cash value over the life of the policy to cover a portion of the death benefit listed on the policy. The cash value builds up inside the insurance policy and will eventually increase to the policy face value, typically at age 100 if the insured is still alive. Participating whole life policies can earn dividends from the life insurance company, which increase the cash value at a faster rate. If you decide you no longer want the life insurance coverage and would rather have the current cash value of the policy, your life insurance policy can be surrendered and the insurance company will send you the accumulated cash value.

1. Review your life insurance policy and most recent statement from the life insurance company. Make a note of the guaranteed cash value of the policy as listed in the policy and the current cash value from the statement. With a participating whole life policy, the current value will probably be higher than the guaranteed value. Also note if there is a cash surrender value that is different from the current total cash value. In the early years of many policies, the cash surrender value is less than the total cash value. When you surrender the policy, you receive the cash surrender value.

2. Contact the customer service department of the life insurance company and tell a customer service representative you wish to surrender your whole life policy and receive the cash value. The insurance policy or statement will have the customer service contact number.

3. Follow the directions of the customer service representative to complete the policy surrender request. If your mailing address is the same as the address of record on the policy, the insurance company may just cancel the policy and mail a check. If you have a different address, want the money deposited in a bank or are not the sole owner of the policy, you may need to complete additional paperwork. Have the representative email or mail you the necessary forms.

4. Ask the customer service representative how long it will take to receive the surrender value from your life insurance policy. State laws allow insurance companies up to several months to complete a policy surrender. Keep a record of the names and dates of everyone you contact concerning your policy surrender.


  • If you are still in contact with the insurance agent who sold you the policy, the agent can help with the surrender process.
  • If you do not have contact information or cannot locate the life insurance company that issued the whole life policy, contact your state department of insurance for assistance in locating the company or the current company handling the policy.
  • It is also possible to take a loan against the cash value of a life policy. The loan option keeps the death benefit intact -- minus the loan amount -- but will require periodic payments to repay the loan or at least interest on the loan.


  • Remember that cashing out a whole life policy cancels the life insurance coverage. If you still need life insurance coverage, apply for and be approved for a new policy before canceling out the old policy.

Items you will need

  • Life Insurance Contract
  • Recent Annual Statement from Life Insurance Company

About the Author

Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.

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