{"ok":true,"canonical_url":"https://dealroom.so/glossary/term-life-insurance","api_url":"https://dealroom.so/api/public/glossary/term-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":"term-life-insurance","term":"Term life insurance","group":"The loan itself","definition":"This type of life insurance provides coverage for a specific period (the term), paying a death benefit if the insured dies within that term. It's often required by SBA lenders to protect the loan.","what_it_means":"For 7(a) loans, the SBA often requires the buyer (key principal) to carry term life insurance with an assignment to the lender. This ensures the loan can be repaid if something happens to you. The policy typically covers the loan principal for the duration of the loan.","url":"https://dealroom.so/glossary/term-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"},{"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":"whole-life-insurance","term":"Whole life insurance","url":"https://dealroom.so/glossary/whole-life-insurance"},{"slug":"key-principal","term":"Key principal","url":"https://dealroom.so/glossary/key-principal"},{"slug":"life-insurance-assignment","term":"Life insurance assignment","url":"https://dealroom.so/glossary/life-insurance-assignment"}],"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":"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":"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":"Should a business choose term or permanent life insurance for key person protection?","url":"https://dealroom.so/sba-7a/questions/should-a-business-choose-term-or-permanent-life-insurance-for-key-person-protection"},{"question":"What are the consequences if I fail to maintain required life insurance collateral during the loan term?","url":"https://dealroom.so/sba-7a/questions/what-are-the-consequences-if-i-fail-to-maintain-required-life-insurance-collateral-during-"},{"question":"How does a lender ensure life insurance policies assigned as collateral are properly maintained throughout the loan term?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-ensure-life-insurance-policies-assigned-as-collateral-are-properly-maint"}]},"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 — Term life insurance","url":"https://dealroom.so/glossary/term-life-insurance","source_type":"DealRoom Data"}}