How To Use Life Insurance As Collateral For A Loan? 
Life Insurance can be considered by a lender for collateral purposes generally speaking if it is some type of `` Permanent '' Life Insurance , that is one of the many types that include some sort ofcash accumulation benefit . These can take many forms including Traditional Whole Life , Universal Life and it 's many forms or some other type of Variable product . In general , Term Life Insurance , which provided for a death benefit but does not include any form ofcas accumulation provision , will more than liklely not be considered as collateral for a loan . 