Q: If I withdraw the proceeds of a variable life insurance policy, will it become tax-free after ten years?

There are some questions regarding this matter that have been asked by life insurance consumers. Before we go any further, it is important to keep in mind that the proceeds of a life insurance policy are usually not accessible at all. Here are some things for you to know:

• One way you can access the cash value of life insurance is by getting a policy loan
• If you want to borrow against life insurance, a variable life insurance policy, just like a cash value policy, does just that
• There are certain types of cash value policies that will allow partial withdrawals of the cash value
• Most of the times, policy loans are not considered to be taxable income
• If you want part of your interest to be credited back to the cash value, keep in mind that you can do that
• Universal life insurance can also offer withdrawals from the cash value
• When you make a partial surrender of the policy, then you can make a cash value withdrawal
• By doing this, your death benefit will probably be reduced
• Yes, a withdrawal will be tax-free
• Your full cash surrender value is sometimes accessible by certain cash value policies
• There might be certain fees associated with your full cash surrender value
• Keep in mind that it isn't common for you to be accessible to your insurance proceeds of a life insurance policy before your death
• It is very rare for life insurance companies to let you take money out of your cash value policy and use it for medical expenses and other treatments while you are alive
• Typically, your proceeds of the life insurance policy are not available