{"ok":true,"canonical_url":"https://dealroom.so/glossary/assignment-of-policy-form","api_url":"https://dealroom.so/api/public/glossary/assignment-of-policy-form","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"assignment-of-policy-form","term":"Assignment of Policy Form","group":"People and paperwork","definition":"This form legally transfers the rights to your life insurance policy to your lender as collateral. It ensures the bank can collect if you, as a key principal, pass away, protecting the loan.","what_it_means":"Lenders require life insurance on key principals for SBA loans. This form legally assigns the policy to the lender, giving them the right to collect proceeds if needed. Confirm the policy amount covers the outstanding loan balance, and know who pays premiums.","url":"https://dealroom.so/glossary/assignment-of-policy-form","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"life-insurance-assignment","term":"Life insurance assignment","url":"https://dealroom.so/glossary/life-insurance-assignment"},{"slug":"key-man-insurance","term":"Key man insurance","url":"https://dealroom.so/glossary/key-man-insurance"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"}],"related_questions":[{"question":"Are there specific requirements for the type of life insurance policy needed for a collateral assignment on a key principal?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-requirements-for-the-type-of-life-insurance-policy-needed-for-a-collate"},{"question":"Can a term life insurance policy be used for the collateral assignment requirement on an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-term-life-insurance-policy-be-used-for-the-collateral-assignment-requirement-on-an-s"},{"question":"What are the specific requirements for naming the lender as the loss payee on a life insurance policy collateral assignment?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-naming-the-lender-as-the-loss-payee-on-a-life-insur"},{"question":"Can a term life insurance policy be used for the required collateral assignment on key principals for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-term-life-insurance-policy-be-used-for-the-required-collateral-assignment-on-key-pri"},{"question":"Can a lender rely on a universal life insurance policy that has a cash value for a collateral assignment on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-rely-on-a-universal-life-insurance-policy-that-has-a-cash-value-for-a-collate"},{"question":"How does a collateral assignment of life insurance protect a lender?","url":"https://dealroom.so/sba-7a/questions/how-does-a-collateral-assignment-of-life-insurance-protect-a-lender"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Assignment of Policy Form","url":"https://dealroom.so/glossary/assignment-of-policy-form","source_type":"DealRoom Data"}}