According to Barclays this is interest subject to Income Tax (IT). This being the case it would not be allowable against your Annual Exempt Amount Gains Tax (CGT) purposes. The two taxes are entirely separate regimes.
If you have made a gain on these policies then the gain is taxed under the IT regime and not under the CGT. The situation regarding tax on insurance policy gains is extremely complicated and you can read chapter and verse here:
However, here is the key extract:
'Gains In these notes ‘gains’ are chargeable event gains which are sometimes referred to as ‘chargeable gains’. They are taxable as income and included in income purposes, including entitlement to personal allowances (including age-related allowances) and tax credits. They are not capital gains, so capital losses and the annual exempt amount cannot be set against them.'
This rather regrettably scuppers your ideas as the moneys received, be they either interest or gains, come under the IT regime.
I am so sorry to have to rain on your parade. Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes!