Life insurance for your loan checklist.

Often, yes. When repayment of an SBA loan depends on one or two key people, lenders commonly require life insurance with a collateral assignment before closing. Your lender sets the exact requirement, including the amount and the documentation.

Most lenders accept an ordinary term life policy that you own personally, with a collateral assignment naming the lender. Confirm the required amount and any documentation deadlines with your lender before you apply.

No. Key person insurance is owned and paid for by the business, with the business as beneficiary, and it carries its own tax and consent rules. What lenders typically require for an SBA loan is a personal policy on the owner with a collateral assignment. If your situation actually calls for business-owned coverage, call us and a licensed agent will help.

It is a standard carrier form, completed after the policy is issued, that gives the lender first claim on the benefit up to the outstanding loan balance. It does not change who owns the policy, and the rest of the benefit stays with your named beneficiary.

It depends on the carrier and product. Some carriers offer accelerated underwriting with a decision in minutes for eligible applicants; others require more underwriting time. If a closing date is near, start the comparison early and tell your lender where things stand.