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Policy loans are called loans, but in reality the loans and the general sense is essentially different., Generally referred to loans is the currency funds that lender provided the borrower in accordance with the agreed interest rate and term debt service,the policy loan is not establish a genuine loan relationships between the insurance company and policy owner ,when the policy owner get policy loan,and not promise to return the principal and interest on loans, because the funds policy owner received from the policy’s cash value,that is to say , insurance companies will have to pay its part of Policy loans in the future,policy loans made the policy owner can advance of these funds.
Although the policy loans does not require the borrower to certain loans repaid, but this kind of  loans to the insurance company does not involve any risk. Because policy loans are based on cash value,as the policy’s cash value increased with the increase of the policy’s years,the loanable amount increas with the changing time ,the longer the time policy is ,the loanable amount is bigger, If the policy loan principal and interest over the policy’s cash value, the lender is not repaid, the insurance company will make the policy void, no longer bear the responsibility under the policy, Similarly, if the insured dies, policy loan principal and interest didn’t repay,insurance death benefits will be deducted in its principal and interest loans, It can be seen, insurance companies do not require the borrower to repay the loan principal and interest then guarantee that this loan is 100% secure.

Policy loans in the balance sheet of the insurance company is to be included in the investment, but in practice, policy loans are usually not by the customer service department is responsible for the investment department of other investment projects completed.