{"ok":true,"canonical_url":"https://dealroom.so/glossary/assignment-of-policy-rights","api_url":"https://dealroom.so/api/public/glossary/assignment-of-policy-rights","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-rights","term":"Assignment of policy rights","group":"Doing the deal","definition":"This is when a policyholder transfers their rights in a life insurance policy to a lender as collateral. For an SBA loan, it secures the loan against the death of a key person.","what_it_means":"If you or another key principal is required to have life insurance for the SBA loan, you'll sign an Assignment of policy form. This gives the lender the right to collect the policy proceeds if the insured dies, ensuring the loan can be repaid. Make sure the policy is correctly assigned before closing.","url":"https://dealroom.so/glossary/assignment-of-policy-rights","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"}],"related":[{"slug":"life-insurance","term":"Life insurance","url":"https://dealroom.so/glossary/life-insurance"},{"slug":"key-man-insurance","term":"Key man insurance","url":"https://dealroom.so/glossary/key-man-insurance"},{"slug":"beneficiary","term":"Beneficiary","url":"https://dealroom.so/glossary/beneficiary"},{"slug":"assignment-of-policy-form","term":"Assignment of Policy Form","url":"https://dealroom.so/glossary/assignment-of-policy-form"}],"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 an SBA 7(a) loan finance the purchase of intellectual property rights from a third party?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-purchase-of-intellectual-property-rights-from-a-third-part"},{"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"}]},"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 rights","url":"https://dealroom.so/glossary/assignment-of-policy-rights","source_type":"DealRoom Data"}}