Policy loan, also known as policy pledge loan, is a loan obtained by the insured from the insurance company with the policy as collateral. Policy holders can get policy loans because their policies have cash value. With the implementation of the balanced premium system, the premiums paid by the insured in whole life insurance at the initial stage of the policy are higher than their current expenditures, thus accumulating year by year and forming a certain cash value. 2. When obtaining a policy loan, the insured does not promise to repay the loan principal and interest, because the funds obtained by the insured come from the cash value of his policy, which is a part of the funds that the insurance company must pay him in the future. Policy loans enable policy holders to advance this part of the funds. 3. There are two main modes of policy pledge loan in China: one is that the insured directly mortgages the policy to the insurance company and obtains the loan directly from the insurance company. If the borrower fails to perform the due debt, the insurance company will terminate its insurance contract when the loan principal and interest reach the surrender amount; The other is that the policyholder mortgages the policy to the bank, and the bank pays the loan to the borrower. When the borrower fails to perform the due debt, the bank can repay the loan principal and interest by the insurance company according to the contract. 4. From a certain point of view, policy pledge loan is a new business for insurance companies to explore innovative business channels and extend service areas. The development of this business, for insurance companies, has stabilized customers, ensured premium income, given new functions to insurance policies, strengthened the marketing of insurance policies, and expanded the investment effect of customers buying insurance; For customers, it relieves the pressure of capital demand and solves the "dilemma" problem that customers will lose money when they surrender, but they will not surrender and have no money to do things. In a sense, policy pledge loan is the product of insurance breaking through the original single function of sharing risks and digesting losses and developing into multiple functions such as saving and investment. 5. There is a lot of room for growth in policy pledge loan business. However, China's current Insurance Law does not clearly stipulate the pledge loan system of life insurance policy, but only indirectly confirms the pledge of life insurance policy in the form of prohibitive norms in Article 56. This article stipulates that an insurance policy issued in accordance with the contract with death as the condition for payment of insurance benefits shall not be transferred or pledged without the written consent of the insured. The negative interpretation of this article is that the life insurance policy can be transferred or pledged with the written consent of the insured. 6. Through the policy loan, the insurance company pays the insurance premium in advance for the insured, so that its policy will not be invalid because of the failure to pay the insurance premium, or when the funds can be obtained through the policy loan to meet other capital needs, the insured will not choose the way of obtaining termination payment through surrender. In this sense, policy loans are conducive to maintaining the efficiency of insurance companies' policies. On the other hand, if the market interest rate rises, policy loans increase, and the cash expenditure of insurance companies increases, the funds invested in other assets will decrease accordingly. In more serious cases, if there are too many policy loans, the insurance company may be forced to sell some assets under unfavorable circumstances to obtain cash to meet the policy loans, which will have a negative impact on the operation of the insurance company.