Glossary · People and paperwork
In short
This form legally transfers the rights to your life insurance policy to your lender as collateral. It ensures the bank can collect if you, as a key principal, pass away, protecting the loan.
Lenders require life insurance on key principals for SBA loans. This form legally assigns the policy to the lender, giving them the right to collect proceeds if needed. Confirm the policy amount covers the outstanding loan balance, and know who pays premiums.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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