SBA 7(a) Q&A
Short answer
The individual being insured must provide their written consent for a business to obtain a life insurance policy on them.
This consent is a legal requirement based on the principle of 'insurable interest' and privacy. The insured person must be aware that a policy is being taken out on their life and give explicit permission. This prevents companies from secretly profiting from an employee's death without their knowledge.
A company wants to take out a key-person policy on its CFO. The CFO must sign an application or consent form 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 “Who must provide consent for a business to obtain life insurance on an individual?” 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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