VUL - Need cash, should I cancel/cash out my policy?

[FinanceMike]

I am 30 and have a variable universal life policy for the past 5 years. I am having some financial difficulty and need cash ASAP. I was looking into taking a loan against the policy but then I started wondering if I even needed the policy at all and maybe should cancel it and save the monthly premiums ($100.00). If I do cancel, would it be easier to get another type of policy while I still have this one and then cancel? Also, what would be the consequences of each choice - loan vs cancel?

These are approximate amounts:
Contributions to date $5,900.00
Cash value $5,400.00
Surrender value $4,000.00

Thanks.

PS - I just read something that said that if I canceled the policy I would need to pay tax on the amount I received that was in excess of the premium paid. Based on the numbers above, my contributions to date are greater than the cash value so I don't think this applies to me. The book also said that paying the tax on the excess amount could be avoided by doing a tax free exchange into a no load variable annuity and that a no load mutual fund company such as Vanguard.com or Troweprice.com that I bought the new annuity from would take care of transferring the existing balance for me.

[sweeps]

What is the penalty for early cancellation?