Who Can Be A Beneficiary On A Life Insurance Policy? 
Sometimes partners in a business will draft a buy-sell agreement . This agreement will define what happens to the business if one of the partners dies by mandating that the surviving partner buy the deceased partners share of the business at an agreed upon price . In this way each partner knows that should he die his heirs will receive a fair price for the value of the business . It also protects the surviving business owner from becoming partners with the deceased owners family . A buy-sell agreement is usually funded with life insurance policies . The partners will be the owners and beneficiaries of each other 's policies . Businesses will also sometimes take out insurance policies on key employees , known as key man insurance . In these situations the business owns the policy and is the beneficiary of the policy . 