Can Term Life Insurance Be Used As Collateral For A Loan? 
Yes , term life insurance can be used as collateral for some loans . Most commonly , we see people using term life insurance as collateral for loans through the SBA -LRB- Small Business Administration -RRB- . When the loan is expected to be paid off within 10 years , using a term life insurance policy is a very inexpensive way of providing collateral . Our office generally uses nonmed insurance for this type of need , so that it can be put into effect quickly . 