Once a household has both a line of credit and a funded policy, the question stops being which one to use and becomes what each one is for.
The line is short money. It's revolving, the rate can move, and the bank can reduce or freeze it. That makes it the right tool for anything paid back inside a few months: the chunk against the mortgage, the float between paychecks, the roof that has to happen this week.
The policy is long money. Nobody can call it, the loan has no repayment schedule, and the cash value keeps growing while the loan sits there. That makes it the right tool for things measured in years: a business injection, a car you plan to pay back over four years, a bridge into retirement.
The tangle happens when people run both at full stretch at the same time. A maxed line and a loaded-up policy means every dollar of surplus is servicing something, and the first surprise expense has nowhere to go. Pick one to be the active tool and leave room in the other.
There's a sequencing question when both are new. Get the line approved while your income documentation is clean and before the policy is fully funded, because a lender looks at debt-to-income and a big new premium can read as an obligation. Once the line is open, the premium schedule doesn't threaten it.
Sequencing usually goes line first, policy second, because the line is cheapest to carry when it's paid down fast and the interest clock runs on the daily balance. When the payback is going to stretch past a year, the policy is usually the better home for it, since the line's rate can move against you the whole time.
Run the numbers on both before the money moves. Loan rate, expected payback window, and what happens to the balance if your income drops for three months. Policy loans reduce cash value and death benefit until they're repaid, so the policy side isn't free either.