I have a whole life policy that my grandparents set up for me when I was 1 year old. I'm now 33. So far I've just left it where it is, letting the dividends pay the premiums and add to the cash value. My plan for a while has been to cash the policy out when I'm ready to buy a house and use it for the majority of the down payment. House buying is probably 1-2 years away.
However--my partner and I are considering fertility treatments, which can (will) get pricey, and aren't covered by our new insurance. We're a same-sex couple--we'll be using her eggs and my uterus with IVF. (I don't want to debate that this isn't the cheapest way for us to get pregnant/have kids--I know--but this is the way we are doing it because _reasons_.) My partner is about to turn 35, and so we've realized that we'd better get a move on, at least with the egg extraction bit.
So I come to the question: I was just thinking that I would go ahead and cash out the policy (pay taxes, obvs) put most of it in bonds or something else stable for using for the house down payment later and use what we need to to get the IVF started. However I was reading that you can actually just withdraw part of the cash value up to the basis and keep the policy active and not pay tax on that withdrawal, though it might decrease the death benefit (and I may have to start paying the premium out of pocket again--$500/year--if the dividends don't cover it).
Does anyone have any experience with whole life policies? Either cashing them out or withdrawing part of them? And is there anything that i'm totally overlooking here in terms of tax impact or other considerations?
Policy has a cash value (as of my annual statement in Dec 2015) of $43,764
Total death benefit is: $197,472