{"ok":true,"canonical_url":"https://dealroom.so/glossary/life-insurance","api_url":"https://dealroom.so/api/public/glossary/life-insurance","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":"life-insurance","term":"Life insurance","group":"Doing the deal","definition":"A policy that pays a sum of money to beneficiaries upon the insured person's death. For SBA loans, it protects the lender in case of the borrower's death.","what_it_means":"The SBA requires life insurance on key principals, typically you as the borrower, for the full amount of the loan, assigned to the lender. This ensures the loan can be repaid if something happens to you. This is distinct from \"key man insurance\" which protects the business itself.","url":"https://dealroom.so/glossary/life-insurance","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":"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":"beneficiary","term":"Beneficiary","url":"https://dealroom.so/glossary/beneficiary"},{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"}],"related_questions":[{"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":"How does disability insurance complement life insurance for business protection?","url":"https://dealroom.so/sba-7a/questions/how-does-disability-insurance-complement-life-insurance-for-business-protection"},{"question":"How does business overhead expense insurance differ from key-person life insurance?","url":"https://dealroom.so/sba-7a/questions/how-does-business-overhead-expense-insurance-differ-from-key-person-life-insurance"},{"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":"Why is long-term disability insurance considered a vital complement to business life insurance?","url":"https://dealroom.so/sba-7a/questions/why-is-long-term-disability-insurance-considered-a-vital-complement-to-business-life-insur"},{"question":"How are appropriate business life insurance coverage amounts calculated?","url":"https://dealroom.so/sba-7a/questions/how-are-appropriate-business-life-insurance-coverage-amounts-calculated"}]},"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 — Life insurance","url":"https://dealroom.so/glossary/life-insurance","source_type":"DealRoom Data"}}