Once your policy has acquired a Surrender Value, you can borrow against it from the insurer. The loan is capped at a percentage of the Surrender Value (usually 70–90%), interest accrues until repaid, and unpaid interest gets added to outstanding loan amount. If the policy matures or is claimed while a loan is outstanding, the insurer deducts the loan + interest before paying out.
Policy loans are useful as a low-friction emergency line of credit — no credit check, no documentation beyond the policy itself — but the interest rate (typically 9–10% p.a.) is higher than a top-up home loan or LAP against a fixed deposit.