Whole life insurance policy borrowing, in the American sense, means taking a loan from the insurer against the cash value a policy has built up. The UK whole of life documents quoted below, from Aviva, Legal & General, Zurich and Royal London, say their plans have no cash-in value, so there is nothing for that kind of loan to be measured against.

Some older UK policies, the with-profits and unit-linked kinds, do hold a value you can take by surrendering them, and a policy can be assigned to a lender as security for a loan. Both are covered here. If you hold a whole of life policy, ask an FCA-authorised broker what yours would let you do with its value; that free conversation is booked via the form on this page.

How a policy loan works on American whole life cover

Guardian, an American insurer, describes policy loans as letting policyholders "borrow money against the cash value component of their life insurance policy". Its guide says the money is a real loan from the insurer that issued the policy, or a related company, based on the policy's cash value. It adds that "Many insurers allow you to borrow up to 90% of your total cash value", and that a newer policy can take several years to build enough cash value to borrow against.

The costs sit on the other side. Guardian says that if the loan is not repaid, "the death benefit of the policy will be reduced by the loan balance and any interest accrued", and that the policy can lapse in some circumstances where a loan goes unrepaid. This is one American insurer describing American practice; it says nothing about how a UK policy behaves.

Does UK whole of life insurance have a cash value to borrow against?

The whole of life plans below say they do not. Each document is the insurer's own, and each is one product rather than the whole market.

Insurer and documentWhat it says about cashing in
Aviva, Whole of Life Insurance+ policy summary (AL50007 02/2026)"This isn't the kind of policy that you can 'cash in' - so you don't get any money if you cancel it."
Legal & General, Whole of Life Protection Plan summary (LG2588, June 2025)"The policy has no cash-in value at any time."
Zurich, Whole of Life key features (PW720505007, February 2025; sold through financial advisers)"The policy has no cash-in value."
Royal London, current Whole of Life plan page (read October 2026)"There is no cash-in value at any time"

Zurich's key features add that if you stop paying, your cover ends and no premiums already paid are refunded. With none of these four plans is there a pot to draw on while you are alive; money comes out when a valid claim is made.

A loan on the American pattern is measured against cash value, and these plans describe none. If you are comparing plans partly because you may want money from one later, a broker can tell you which plans they work with give you anything back before a claim, and you can put that question to them on the call-back booked through this page.

Older with-profits and unit-linked whole of life policies

Whole of life policies are not all alike. Royal London's guide for people who already hold its with-profits Whole Life Assurance points out that many different types have been sold over the years, so your own paperwork decides.

In that with-profits guide (April 2026), the insurer says you can surrender the policy at any time, and what it pays is a fair value based on your payments, any investment return and the insurer's expenses. It warns: "This value may be lower than the amount we guarantee to pay on death." Its guarantee is a minimum payout when the person covered dies, and bonuses are aimed for, not promised.

Royal London's page for people with a reviewable plan, read in October 2026, says "Some plans won’t pay out if you cancel, but exceptions can apply, for plans that are unit-linked." A unit-linked plan buys units in an investment fund, and the plan value "reflects the amount you might get if you were to cancel your plan". The same page says the plan is mainly for protection and is not a savings plan.

Whether your insurer would allow any borrowing against an older policy is a matter for your policy terms, and a broker can help you decide what to ask the insurer when they ring you back.

Before giving up a policy for its value, note that the cover ends with it, and that stopping payments on the with-profits plan reduces the value and the life cover, according to the same guide. The mechanics of surrender are in can you cash in a life insurance policy, the tax in is a life insurance cash out taxable, and the varieties of cover in types of whole life insurance.

Using a whole of life policy as security for a loan

The nearest UK equivalent to borrowing against a policy is assigning it to a lender. Royal London's surrender FAQs for existing customers explain that if a policy "has been assigned", it means the "rights to claiming on the policy have passed to someone else, for example a bank or building society". Before you can cash such a policy in, Royal London says it contacts the bank or building society.

Royal London's Personal Menu Plan terms for life or critical illness cover (July 2025, sold through advisers) say an assignment could take place when the plan is used as security for a loan, or has been put in trust. Legal & General's trusts page makes a related point: transferring ownership, for instance as security for a loan, may mean that a trust cannot be used.

That affects who can claim on the policy and whether it can sit in a trust, so a policy in trust and a policy pledged to a lender need thinking about together. Putting a life insurance policy in trust and whole of life insurance and inheritance tax cover those points.

Life cover taken out to clear a debt such as a mortgage is a different subject, covered in does life insurance cover my mortgage. What a particular lender would accept as security is for that lender; a broker can say how an insurer treats the assignment of a policy of yours.

Frequently asked questions

Can you do infinite banking with UK life insurance?

Borrowing from your own policy needs a value inside it to borrow against, as Guardian's description of American policy loans shows, and the UK whole of life plans quoted above say they have no cash-in value. For an older with-profits or unit-linked policy, the insurer's terms say what is allowed.

If I borrowed against a policy, would my family get less?

Guardian says that on its American policies an unpaid loan, with accrued interest, is taken off the death benefit. In the UK, if a policy has been assigned to a lender as security, Royal London explains that the rights to claim on it have passed to that lender, such as a bank or building society.

Can I borrow against an over-50s plan?

SunLife's Guaranteed Over 50 plan terms say it has no cash-in value at any time. Over-50s cover is compared in life insurance over 50.

If a policy is on your mind, whether held already or being weighed up, a short enquiry on this page is how you reach a broker for the call-back, where you can ask what it would allow, borrowing included. Other kinds of cover sit under types of policy.

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