Policy pledge loan is a financing method in which the insured directly mortgages the policy he holds to the insurance company and obtains funds according to a certain proportion of the cash value of the policy. If the borrower fails to perform the debt at maturity, the insurance company has the right to terminate the insurance contract when the loan principal and interest accumulate to the cash value of surrender. In the process of life insurance exhibition, it has become a fashion to add policy pledge loans to insurance clauses. For life insurance companies, the role of policy pledge loan in investment portfolio has been paid more and more attention, but what is its core significance and how to control its proportion in investment portfolio accordingly? Based on the analysis of the root and extended function of policy pledge loan, this paper puts forward some relevant suggestions.