In a small business, there are typically "key people"
who are critical to the success of the business. This could be the business owner or partners, or other "key" employees such as the senior marketing or sales manager, chief engineer or software developer in the case of a technology company.
In a small business, the death of any of these people could have a serious impact on the business' bottom line.
As the owner of the key life insurance policy, the company is the beneficiary and receives the benefits once the employee dies.