What happens if the cash value in a UL policy is used for withdrawals?

Using the cash value in a Universal Life (UL) insurance policy for withdrawals will lead to a decrease in both the cash value and the current death benefit. This is because the cash value in a UL policy acts as a component that ultimately supports the death benefit. When policyholders make withdrawals, they reduce the cash value, which in turn lowers the amount of death benefit available to beneficiaries.

The death benefit of a UL policy is not a fixed amount; instead, it fluctuates based on the cash value and the chosen death benefit option. Thus, when the cash value decreases due to a withdrawal, there is a corresponding impact on the death benefit as it adjusts to reflect the new lower cash value. This interconnectedness is fundamental to how UL policies operate, making it clear that withdrawals affect both components.

Additionally, it's noteworthy that such withdrawals can also lead to other implications, but the most immediate effect is the decrease in both the cash value and the death benefit as outlined.