{"ok":true,"canonical_url":"https://dealroom.so/glossary/beneficiary-designation","api_url":"https://dealroom.so/api/public/glossary/beneficiary-designation","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":"beneficiary-designation","term":"Beneficiary designation","group":"People and paperwork","definition":"Naming who receives the proceeds from an asset, like a life insurance policy, upon the owner's death. For an SBA loan, the lender will likely be designated as the beneficiary or assignee of your required life insurance.","what_it_means":"When a lender requires life insurance on a key principal for an SBA 7(a) loan, you'll need to formally designate the lender as the primary beneficiary or assign the policy to them. This ensures the loan is repaid if the guarantor dies, protecting the lender and potentially other guarantors.","url":"https://dealroom.so/glossary/beneficiary-designation","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":"decreasing-term-life-insurance-policy","term":"Decreasing term life insurance policy","url":"https://dealroom.so/glossary/decreasing-term-life-insurance-policy"},{"slug":"assignment-of-policy-form","term":"Assignment of Policy Form","url":"https://dealroom.so/glossary/assignment-of-policy-form"}],"related_questions":[{"question":"What is the difference between collateral assignment and naming a lender beneficiary?","url":"https://dealroom.so/sba-7a/questions/what-is-the-difference-between-collateral-assignment-and-naming-a-lender-beneficiary"},{"question":"Who owns and is the beneficiary of a key-person life insurance policy?","url":"https://dealroom.so/sba-7a/questions/who-owns-and-is-the-beneficiary-of-a-key-person-life-insurance-policy"},{"question":"Who must be named as the beneficiary for life insurance on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/who-must-be-named-as-the-beneficiary-for-life-insurance-on-a-7-a-loan"},{"question":"When is life insurance on key principals required by the SBA, and who must be the beneficiary?","url":"https://dealroom.so/for-lenders/questions/when-is-life-insurance-on-key-principals-required-by-the-sba-and-who-must-be-the-beneficia"},{"question":"Can the borrower's business entity be named as the beneficiary for SBA-mandated life insurance, instead of the lender?","url":"https://dealroom.so/for-lenders/questions/can-the-borrower-s-business-entity-be-named-as-the-beneficiary-for-sba-mandated-life-insur"},{"question":"How should a lender structure the beneficiary and assignment of life insurance on a key principal for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-structure-the-beneficiary-and-assignment-of-life-insurance-on-a-key-pr"}]},"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 — Beneficiary designation","url":"https://dealroom.so/glossary/beneficiary-designation","source_type":"DealRoom Data"}}