A. The insurer won't let this happen.
You can take policy loans out of your life insurance if it has enough cash value and insurer would allow you to do it at a favorable interest rate, that's because the insurer is using your cash value as a collateral.
When the insurer sees that your loan, adding interest, will exceed the cash value, it will close your policy. In that case, if your loan amount is larger than your premium contribution, you will have to pay tax.
What to do in such a situation? There are a couple of strategies, as outlined in this great article, its summary is shown in the chart below.