whole point of paying off house was to not have the risk..So now this WL policy is the emergency fund? One can also borrow from their retirement accounts but its not generally smart to do that.
So at what point would one pay off a house and not have "the risk"?
So now you are talking about 3 asset types: A Whole Life insurance policy, A house (presumably you're referring to primary residence), and An employer sponsored retirement account (IRAs don't generally allow for loans, CARES act being the exception allowing for a withdrawal that can be redeposited).
The WL should not be an emergency fund, but it could be used as a backup to such. Unlike the other two assets, which would be leveraged to secure a loan, that could decline in value while a loan is outstanding, a Whole Life policy, by design and definition, cannot decline in value (with the exception of the cost of some riders that could eat into the policy's value, none of this should be an issue if working with a competent agent).