You can in fact use the equity in a policy without any tax consequences or penalties as long as the policy remains in force. You do have to pay an interest charge for the use of your money. The premiums are initially higher than any term policy, and the premiums must be paid each year. Another permanent plan, universal life, came into being in the early '80s. The insurance industry saw that it needed a product that was more consumer friendly, and with the equity sensitive to what was going on in the economy and the stock market.
Premiums can be flexible, and so can the death benefit.
That is exactly what these plans do, and they do a better job of it, too. Some of these policies have not performed as illustrated, and others will never reach the high rates that some computer program stated they would pay. That should not come as a revelation. Computers are not the final word on anything. The last type of permanent insurance is called variable life because it allows you to pick where you want your equity side of the policy invested.