SBA 7(a) Q&A
Short answer
Business overhead expense (BOE) insurance covers ongoing business expenses if a key owner or partner becomes disabled, whereas key-person life insurance provides a death benefit if a key individual dies.
BOE insurance pays for fixed operating costs like rent, utilities, and employee salaries during a period when the owner/partner is unable to work due to disability. Key-person life insurance, on the other hand, is triggered by death and aims to replace lost income, cover debts, or fund a replacement.
If a consulting firm owner becomes disabled, BOE insurance might pay the $10,000 monthly office rent and staff salaries for up to a year. If the owner dies, key-person life insurance would provide a lump sum, perhaps $1,000,000, to the business for succession or debt repayment.
Last reviewed 2026-06-15 · SBA sources checked through 2026-06-15. DealRoom analysis of business life-insurance and SBA collateral-insurance practice (SOP 50 10 8). Not insurance, legal, or tax advice. Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on business life insurance & protection
Terms in this answer
← Browse all sba 7(a) questions
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day