Key person life insurance

Your bank may require the collateral assignment of a key person life insurance policy.  Specifically, the SBA gives the following: 

The lender must determine if the viability of the business is tied to an individual or individuals. In these situations, the lender must require life insurance.  The life insurance required must be consistent with the size and term of the loan. The amount and type of collateral available to repay the loan in the event of the death of the borrower may be factored into the determination of the appropriate amount of life insurance.

Expect your bank to require a collateral assignment of key person life insurance; the required policy amount being at least equal to that of the loan.