Who is the beneficiary of a key person insurance policy?

The employee is not the beneficiary; instead, they are often the insured individual under the policy. While the employee's contributions are crucial to the business, they do not receive the benefits from the policy directly. Instead, the employer receives the payout to mitigate financial risks associated with losing the employee.

The insured's spouse is not the beneficiary of a key person insurance policy. While the spouse may benefit from other types of life insurance policies, the key person policy is specifically structured to provide financial support to the employer rather than to the employee's family or dependents.

A business partner may not be the beneficiary in a key person insurance policy, as the policy focuses on protecting the employer’s financial interests. However, business partners might have separate buy-sell agreements or insurance policies in place to ensure their partnership continues smoothly in the event of a partner's death.