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Universal Life Policies?

I have two universal life insurance policies--one on myself and one on my wife. I have had these policies since 1996. In the summer of 2009 I borrowed against the policies because I had a money shortage due to disability. I would really just like to drop thes policies altogether because I am looking for a cheaper term life insurance ploicy. Can I just drop the policies without repaying the loan? I haven't paid the premiums for the last several months. Will I be held liable for repaying the loan if I discontinue the policies? Any help would be appreciated.

Public Comments

1. Yes, you can drop the policies without repaying the loan. Keep in mind, the "growth amount" - if any - would count as taxable income. The loan was just YOUR money that you borrow back, paying the interest to (usually) the insurance company.
2. Yes, you can just drop them. They never let you borrow more than the cash value. It would be unlikely that there has been growth to pay tax on, but check to find out for sure. Also, once you determine that IS the better way to go, be sure to get the new plan first BEFORE canceling the old plan.