Can You Use Life Insurance As Collateral For A Loan? 
Depending on the type of policy you may be able to borrow from the cash value of the policy itself , or you may use the policy as collateral for a loan . Permanent life insurance policies have the ability to grow cash value - whole life is the best for this - but Term policies have no cash value and therefore are not usable as collateral for a loan . And not all banks will accept even Whole Life policies as collateral . You should check with the insurance company that your policy is with to see if there is an agreement in place where your policy may be used to secure a loan . 