SBA Life Insurance Term Requirement

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April 21, 2026

by a searcher from Harvard University - Harvard Business School in Los Angeles, CA, USA

Does anyone happen to know the SBA requires the term of the the life insurance policy to mirror the term of the loan? So, for example, on a 10-year SBA loan does the Key Individual require 10-year term life insurance? That's not always possible. Curious if there are any workarounds.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Yes, generally speaking the lender is looking for the term of the life insurance policy to match the term of the SBA 7A loan. So if you have a 10 year or 25 year loan term, they would want that policy to match the term. If you already have a policy and the remaining term is a bit short of matching that, then most lenders can work around that. Also, if the cost of getting insurance is too outrageous and is an economic hardship, you can get the insurance requirement waived. If you have additional questions regarding SBA loans or life insurance related to those loans, you can reach me here or directly at redacted Good luck.
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Reply by a lender
from University of Missouri in Denver, CO, USA
Brad is exactly correct. Also, if you are not able to get life insurance and have denials that would be eligible to be waived. Keep in mind, this is an SBA requirement and not a bank requirement to have life insurance on the collateral shortfall.
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