Does Borrowing Against Your Life Insurance Policy Work? 
Borrowing from existing cash value life insurance can work . Youll need an in force ledger from the life insurance company illustrating the policy loan including the interest charged to borrow your money . If you dont pay the interest charge it will cannibalize cash values to make the interest rate payment . There are several policy loan interest charging methods : Zero net cost loans , wash loans , spread loans , direct recognition loans and participating loans . Keep in mind that tax free policy loans are predicated on the policy remaining in force for the life of the policy insured . 