Key person insurance premiums are generally tax deductible as long as certain criteria are met.
To qualify for corporation tax relief on key person insurance premiums, the policy will need to be for loss of trading income related to the loss of the relevant key person and, for life insurance policies, be term-limited i.e. only cover the death of a key person within the term of the policy.
If you need to make a claim against your key person insurance policy, any lump sum you receive will be paid tax-free to your business, but the funds will then be liable for tax in exactly the same way as any other funds received by your company.