Small business owners and partners commonly use life insurance for two distinct purposes beyond personal family protection. First, key person cover is taken out by the business on the life of an essential person (often a founder or specialist) — the business pays the premium and is the policy owner and beneficiary, so the lump sum on death helps the business survive the financial shock of losing that person. Second, business succession or buy/sell cover funds the orderly transfer of ownership when one partner dies — each partner takes out a policy, with the proceeds funding the surviving partners' purchase of the deceased partner's share from their estate at a pre-agreed valuation under a buy/sell agreement drafted by the business's solicitor. The structure of ownership and beneficiary nomination matters significantly for tax — typically key person life cover is held by the business with the business as beneficiary (premiums non-deductible if for a capital purpose, payouts non-assessable for capital purposes), while buy/sell can be structured as cross-owned policies (each partner owns the policy on the other) or held under a buy/sell trust depending on the arrangement. Ownership structure, premium tax treatment, and CGT consequences vary case-by-case — engage both an insurance adviser and a business-tax accountant before finalising a business structure. Key person cover and buy/sell cover are both general-advice-only products through this brokerage; the legal documentation must come from your solicitor.