Glossary · People and paperwork
In short
In the context of a life insurance policy, this is the first party designated to receive the policy's payout. For a 7(a) loan, the lender is often the primary assignee on your key-person life insurance.
The SBA requires key principals to carry life insurance assigned to the lender for the term of the loan. As a buyer, you'll be the insured, and the lender will be the primary assignee. This protects the lender if you, as the operator, pass away before the loan is repaid. It's a standard requirement to mitigate risk.
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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