Dear yw312tuu -
Sorry to read about your circumstances. What the insurance company has told you is correct. Over the years your have borrowed against the cash value of the policy. Whether it was to pay the premiums, interest or taking cash. You essentially have used the $227K for whatever purpose. If you cash in the policy, unless you also repay your loans, you will have a large amount of income to report and pay tax on. Assuming a 35 - 40% combined tax rate, you would breakeven in 3-4 years (but you wouldn't have the the insurance).
While you may not need the insurance, it may provide your beneficiaries with additional assets. You should review your options with your insurance agent/company and your tax advisor to determine what is best in your situation.