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AIDS Fact Sheet: Selling Your Life Insurance You don't have to pay the money back, like you would if you borrow against your life insurance policy. In some cases, the money you receive is tax-free. . . . NAIC Get Smart insurance quiz death. d. Only if the illness was a pre-existing condition. 2. Can I borrow against my whole life insurance policy? a. Yes. You Invest FAQ:Insurance:Variable Universal Life (VUL) Like whole-life insurance, the insurance policy has a cash value that enjoys tax-deferred growth over time, and allows you to borrow against it. Should you borrow against the cash value of a permanent life Insurance sales representatives will often cite the ability to borrow against a permanent life insurance policy's cash value as a positive. whole life insurance information life is also known as Ordinary (or Permanent) life insurance. to receive in the event of policy cancellation You also have the right to borrow against the cash Insurance Myths the value just as you would borrow against the equity the worst-case scenario, you may borrow so much that you end up losing your Life Insurance coverage and