{"ok":true,"canonical_url":"https://dealroom.so/glossary/universal-life-insurance-policy","api_url":"https://dealroom.so/api/public/glossary/universal-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":"universal-life-insurance-policy","term":"Universal life insurance policy","group":"Your money in the deal","definition":"This is a type of permanent life insurance with a cash value component that grows over time. Its flexibility allows policyholders to adjust premiums and death benefits.","what_it_means":"If you're using the cash value from a universal life insurance policy for your equity injection, your lender will verify it's \"unencumbered,\" meaning it's not already pledged as collateral for another loan. You may need to assign the policy to the lender or cash it out. Understand the tax implications and any surrender charges before using it.","url":"https://dealroom.so/glossary/universal-life-insurance-policy","official_sources":[],"related":[{"slug":"cash-value","term":"Cash value","url":"https://dealroom.so/glossary/cash-value"},{"slug":"life-insurance","term":"Life insurance","url":"https://dealroom.so/glossary/life-insurance"},{"slug":"unencumbered","term":"Unencumbered","url":"https://dealroom.so/glossary/unencumbered"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"}],"related_questions":[{"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":"Can a lender rely on a universal life insurance policy that has a cash value for a collateral assignment on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-rely-on-a-universal-life-insurance-policy-that-has-a-cash-value-for-a-collate"},{"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":"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"},{"question":"Who typically owns the life insurance policy on a seller post-acquisition?","url":"https://dealroom.so/sba-7a/questions/who-typically-owns-the-life-insurance-policy-on-a-seller-post-acquisition"},{"question":"What is the specific SBA policy document that addresses collateral life insurance requirements?","url":"https://dealroom.so/sba-7a/questions/what-is-the-specific-sba-policy-document-that-addresses-collateral-life-insurance-requirem"}]},"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 — Universal life insurance policy","url":"https://dealroom.so/glossary/universal-life-insurance-policy","source_type":"DealRoom Data"}}