Life insurance for a business loan
SBA and bank lenders often will not close a loan that depends on you without a life insurance policy assigned to them. Compare term life options from more than 30 carriers online, then handle the collateral assignment with your carrier and lender.
Your lender decides its own insurance requirements. Product availability, rates, and approval vary by state, carrier, and underwriting. Comparing options does not guarantee coverage.
Start with the need
Looking for coverage the business itself owns on a key employee? That is a different product with its own tax rules, and a licensed agent should walk you through it.
Key person insuranceMost companies stop at “you’re covered.” Your policy belongs in your free Vault, and when the time comes MedaSynq can file the claim for your family.
How the Vault worksHow it works
Lender requirements are typically satisfied with an ordinary term life policy you own personally, sized to the loan. Compare options from multiple carriers online.
After the policy is issued, a collateral assignment form from the carrier names your lender as assignee for the loan balance. Your lender and carrier finalize the paperwork.
A collateral assignment covers what is owed on the loan. Any remaining benefit above the assigned amount is paid to the beneficiary you name, under the policy terms.
Common questions
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.
Licensed insurance agency
MedaSynq Insurance Services, NPN 22206860.
30+ carriers to compare
Including carriers rated A or better by AM Best.
A real person answers
Questions before you apply? Call (877) 346-6657.
AM Best financial strength ratings apply to individual insurance carriers, not to MedaSynq, and are shown where available during comparison.
Answer one set of questions, compare real prices, and apply online for the policy your loan is waiting on.
Compare Term Life and Apply OnlineMedaSynq Insurance Services (DBA of MedaSynq Technologies Inc) is a licensed insurance agency, not an insurance company. NPN #22206860. Insurance products are underwritten and issued by their respective carriers. Availability, policy forms, rates, and underwriting vary by state and carrier. Lender insurance requirements are set by the lender. MedaSynq is not affiliated with or endorsed by the U.S. Small Business Administration.