If I cash out my universal life insurance policy will I have to pay taxes on the money?

Only if you get back more than you've paid in, in premiums. It's possible, but not likely. You only pay on the net GAIN.

Not unless you have gained money. I suggest you "borrow" the cash value. There is never taxes paid on a loan, you do not have to pay it back, and you will still have the life insurance if something happens to you, minus the amount you borrowed against it. That's a "win, win" situation in my opinion. The life policy will expire/cancel if you don't continue to pay the premiums, however. But it sounds like that is what you want, anyway.

If you took money out of your savings account, it's your money. Money that you've put into a life insurance policy is your FUTURE money. In other words, the contract is based on paying out for one final claim. While you CAN choose to get a loan against that amount, the money that you're paying into the contract in the present is the insurance company's money. They take that money you pay into premium and invest it. That's how they plan to pay for the final claim when the time comes. If you're taking money out of that contract, you're jeopardizing the ability of the company to pay for that future claim. So, you pay interest to make up for the interest that's being lost when you take the money out. And that interest that's being lost IS BEING LOST BY THE INSURANCE COMPANY. Thus, you pay interest to the insurance company.

I get the impression that you don't hate having a UL, but the increasing costs are bugging you. There might be a different way to structure this. Talk to an agent (independent agent) who will pay attention to you because the current fellow doesn't seem to be doing it.

Any agent worthwhile should be able to answer your question about the taxability after they see your surrender value and your cost basis.

Always talk to your agent before canceling life insurance, but you should be able to get that money tax-free. You definitely want to check with the agent and the company before you do anything.

who cares if you have to pay taxes on it - Universal life is a rip off. You should promptly invest in good, solid term life insurance!

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Thanks for the answers!