Glossary · People and paperwork
In short
A flexible type of permanent life insurance with a cash value component and adjustable premiums and death benefits. It's often required by the SBA to secure a loan on key principals.
Similar to a whole life policy, a universal life policy can be assigned to your SBA 7(a) lender to ensure the loan is repaid if a key principal dies. While flexible, lenders generally prefer term life due to its simplicity and lower cost. Expect to complete an Assignment of policy form if using an existing policy.
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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