<prompt> Human: Heres the situation. I wasnt aware of all the life insurance products so I ended up getting Universal Life Insurance. My policy has a cash value of 8000 dollars right now. I am 55 years old but have discovered that this policy is kind of a ripoff.The problem is that if I close it out, the agency will only give me roughly 1000 dollars back. However, I wonder if I can borrow against it. What would be the consequences of borrowing against the policy and not paying the money back? I realize that my life insurance policy would close but besides that, would my credit be affected? Would I be able to get a term life insurance policy with another company?  <response>: You could potentially be on the hook for a lot of taxes if you take out a loan and let the policy lapseYou might be able to do something called a 1035 exchange, which allows you to transfer all of the cash value to another policy instead of giving you just the surrender value. You would want to pick a successor policy thats cheap and requires no additional premiums; a low-cost variable annuity that has a fixed payout options instead of one based on your lifetime might be preferable in this case to taking a cashout or deliberately defaulting on a policy loan. 