SBA 7(a) Q&A
Short answer
Yes, the explicit written consent of the insured person is almost always legally required for a company to purchase a life insurance policy on them.
Laws vary by state, but generally, an individual must provide written consent for a third party, including an employer or business partner, to obtain a life insurance policy on their life. This protects against unauthorized policies and privacy invasion.
Before a company can secure a key-person policy on its CFO, the CFO must sign a consent form, typically part of the application process, acknowledging the policy and agreeing to the medical examination.
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.
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This page answers “Must the insured business owner provide consent for a company to purchase a life insurance policy on them?” for SBA 7(a) business buyers — a short answer, the detail, and official sources — from DealRoom.so SBA Intelligence. It is general information, not legal, tax, or financial advice, and DealRoom is not a lender.
Source: DealRoom.so SBA Intelligence, based on public SBA, lender, franchise, FDIC, and related records. DealRoom is not a lender and does not guarantee financing.
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