Glossary · Your money in the deal
Life insurance cash value
In short
This is the savings component that accumulates within certain types of life insurance policies, like whole life. It can be borrowed against or withdrawn, making it a potential source of funds for your equity injection.
What it means in a deal
Lenders will look at your personal liquidity to ensure you have sufficient funds for your equity injection and post-closing working capital. If you have a whole life policy, its cash value is considered an asset. You might assign the policy to the lender as collateral or use the cash value for your down payment.
Related terms
Common questions about Life insurance cash value
- Can personal retirement accounts or life insurance cash values be used as collateral if business assets are insufficient?
- Can a lender rely on a universal life insurance policy that has a cash value for a collateral assignment on a 7(a) loan?
- When is term life insurance more suitable than permanent life insurance for business protection?
- How does disability insurance complement life insurance for business protection?
- How does business overhead expense insurance differ from key-person life insurance?
- Is a decreasing term life insurance policy acceptable for the SBA's life insurance requirement on a 7(a) loan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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