How Does Borrowing Against Your Life Insurance Work? 
Borrowing money from a permanent cash value life insurance policy has a few considerations : the loan interest rate , the surrender charges and the performance of the crediting method . Policy loan costs will vary from policy to policy , i.e. zero net loans , wash loans , spread loans , direct recognition loans and participating loans . Surrender charges in the early years can be punitive resulting in reduced access to the account value . The performance of the crediting method also impacts the policy : interest rate crediting , indexed crediting and separate sub account crediting or debiting , i.e. you could lose money . 