At what point can a policy owner take out a policy loan on a whole life insurance policy?

A policy owner can take out a policy loan on a whole life insurance policy only when the policy has a cash value. Whole life insurance policies accumulate cash value over time as part of their structure. This cash value is essentially a savings component of the policy that grows on a tax-deferred basis.

Once this cash value is established, the policyholder can borrow against it. The ability to access these funds is one of the advantages of whole life insurance, providing the policyholder with financial flexibility. If the policy does not have any accumulated cash value, there are no funds available for loans, making it essential for the correct choice to be based on the existence of cash value rather than other factors like premium payments or the duration for which the policy has been in force.