A household with both a retirement plan and a cash value policy has two places to borrow from itself. The 401(k) loan is the one more people know. You can usually take up to half your vested balance, capped at $50,000, and pay it back through payroll over five years at a rate the plan sets, often prime plus a point. The money comes out of your investments, so whatever it would have earned while it's out, it doesn't.
The policy loan is the carrier lending you its money with your cash value as collateral. Your cash value stays in the policy and keeps being credited, though on a direct-recognition contract the loaned portion may be credited differently. No payroll deduction or five-year clock, and the request is the application. Interest accrues at the contract rate, and if you don't pay it, it compounds onto the balance.
The 401(k) loan has a trap the policy loan doesn't. Leave the job and the unpaid balance generally comes due. If it isn't repaid or rolled over by the due date of that year's tax return, it's treated as a distribution: taxed as income, plus a 10% penalty if you're under 59½. Plenty of people learn that rule the year after a layoff, which is the worst possible year to learn it. The policy loan doesn't care where you work. That's the general rule, and I'm a broker rather than a CPA, so check it against your own situation.
The policy loan has a trap of its own, and it's the mirror image. Nothing forces repayment. A 401(k) loan is gone in five years because payroll made it go. A policy loan is still there in year eight, bigger, because nobody billed you, and a loan that outgrows the cash value collapses the policy and hands you a tax bill on the gains.
So the order for most situations. Take the policy loan first when you can repay on your own schedule and the amount fits well under your available loan value. The cash value keeps compounding while the money's out, and the loan survives a job change. Take the 401(k) loan when you specifically want the forced payback, when the policy is too young to have the loan value, or when the policy loan rate is running well above the plan's rate. And neither one is for spending that won't come back.
A policy loan reduces cash value and death benefit until it's repaid. If you take the policy loan, write the payback schedule the same day. Use the same timeline a 401(k) loan would have forced on you. Then set the transfer up in the portal the way the payback-schedule post lays out, so the discipline runs without you.