Article 120 section 1 of Taiwan Insurance Law regulates that if premium has been fully paid for one year or more, the proposer may obtain loans from the insurer by using the insurance contract as collateral. This is also called as policy loan. This paper criticizes that whether or not the proposer come to another loan contract with insurer. This paper also asserts that the policy loan should be considered as reduction of insurer’s contract liability but a loan for consumption. It means that proposer does not come to another loan contract with insurer. In addition, the enforcement of the insurance contract should be considered on the surrender value not on the non-forfeiture values. The paper recommends that the court makes a judgement of the enforcement of life insurance policy should be discretionary under the principle of proportionality and avoiding the abuse of rights in order to protect the beneficiaries.