{"ok":true,"canonical_url":"https://dealroom.so/glossary/death-benefit","api_url":"https://dealroom.so/api/public/glossary/death-benefit","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":"death-benefit","term":"Death benefit","group":"Your money in the deal","definition":"The payout from a life insurance policy to your beneficiaries upon your death. For a buyer getting an SBA loan, this isn't directly relevant to funding, but the policy itself might be collateral.","what_it_means":"While the death benefit isn't a source of funds for your equity injection, the life insurance policy itself is often assigned to the SBA lender as collateral for the loan, especially if you're a key principal. This protects the lender if you die before the loan is repaid. The focus for the buyer is usually the Cash surrender value as a source of funds.","url":"https://dealroom.so/glossary/death-benefit","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","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":"life-insurance-assignment","term":"Life insurance assignment","url":"https://dealroom.so/glossary/life-insurance-assignment"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"}],"related_questions":[{"question":"Who legally owns a key-person life insurance policy and who receives the death benefit?","url":"https://dealroom.so/sba-7a/questions/who-legally-owns-a-key-person-life-insurance-policy-and-who-receives-the-death-benefit"},{"question":"Are death benefits from a business life insurance policy generally taxable to the recipient?","url":"https://dealroom.so/sba-7a/questions/are-death-benefits-from-a-business-life-insurance-policy-generally-taxable-to-the-recipien"},{"question":"How does the SBA guarantee truly benefit me as the borrower?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-guarantee-truly-benefit-me-as-the-borrower"},{"question":"How does the SBA guarantee primarily benefit me as the business owner?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-guarantee-primarily-benefit-me-as-the-business-owner"},{"question":"What is the main benefit of an SBA 7(a) loan over a traditional bank loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-main-benefit-of-an-sba-7-a-loan-over-a-traditional-bank-loan"},{"question":"What is the main benefit of an SBA 7(a) loan compared to a conventional bank loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-main-benefit-of-an-sba-7-a-loan-compared-to-a-conventional-bank-loan"}]},"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 — Death benefit","url":"https://dealroom.so/glossary/death-benefit","source_type":"DealRoom Data"}}