{"ok":true,"canonical_url":"https://dealroom.so/glossary/decreasing-term-life-insurance-policy","api_url":"https://dealroom.so/api/public/glossary/decreasing-term-life-insurance-policy","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":"decreasing-term-life-insurance-policy","term":"Decreasing term life insurance policy","group":"The loan itself","definition":"A life insurance policy where the death benefit decreases over time, often used to match the declining principal balance of a loan. It ensures the loan is repaid if a key guarantor dies.","what_it_means":"For SBA 7(a) loans, lenders often require key principals to obtain life insurance, with the decreasing term policy being a common choice. The death benefit reduces as you pay down the loan, aligning with the outstanding balance. The lender is usually the beneficiary or assignee.","url":"https://dealroom.so/glossary/decreasing-term-life-insurance-policy","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"}],"related_questions":[{"question":"Is a decreasing term life insurance policy acceptable for the SBA's life insurance requirement on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/is-a-decreasing-term-life-insurance-policy-acceptable-for-the-sba-s-life-insurance-require"},{"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":"When is term life insurance more suitable than permanent life insurance for business protection?","url":"https://dealroom.so/sba-7a/questions/when-is-term-life-insurance-more-suitable-than-permanent-life-insurance-for-business-prote"},{"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":"What defines 'insurable interest' for a business life insurance policy?","url":"https://dealroom.so/sba-7a/questions/what-defines-insurable-interest-for-a-business-life-insurance-policy"},{"question":"Who is responsible for paying premiums on a business life insurance policy?","url":"https://dealroom.so/sba-7a/questions/who-is-responsible-for-paying-premiums-on-a-business-life-insurance-policy"}]},"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 — Decreasing term life insurance policy","url":"https://dealroom.so/glossary/decreasing-term-life-insurance-policy","source_type":"DealRoom Data"}}