Get the requirement in writing
Ask who must be insured, the coverage amount, policy term, collateral-assignment instructions and when the documents are due. These details determine whether an available policy will work for your closing.
Apply early
Underwriting time varies by applicant, carrier, coverage amount and records required. A policy approval, an active policy and an insurer-acknowledged assignment are different milestones.
Choose for the transaction and the future
Term life insurance can often be a practical starting point. Consider the policy’s guaranteed premium period, duration, conversion feature and carrier assignment process. The lender requirement should be coordinated with your family and business protection needs—not substituted for them.
Read the complete SBA life insurance requirements guide for program distinctions and a borrower checklist.