from what i understand about how this works, you fund a certain type of life insurance policy that has a cash value component to it. once you’ve accumulated a certain amount of cash value in the policy, you are allowed to take out loans against the policy. however, you are still paying premiums on the insurance, and it is a loan that accrues interest. if you borrow too heavily, the policy can lapse. unpaid balances also reduce the death benefit from the policy. over funding too aggressively can also expose you to something called modified endowment contract status, which may cause the income from the loans to be taxable. none of this is financial advice, if you don’t feel comfortable with your parents involving you in this, i would tell them that.