Your family
Estimate what your household would need if your income stopped. Consider whether it could continue receiving business income, and whether selling your interest would be practical at that time.
Avoid assuming the full value of the business would immediately become cash available to your family.
The business
Key person life insurance can help a company manage the financial impact of losing someone essential. That might include replacing expertise, stabilizing revenue, or meeting commitments during a transition.
The company may own and benefit from this policy. That is a separate purpose from money paid directly to your family.
Your business partners
Life insurance may help fund an ownership buyout following a death. The insurance needs to fit the buy-sell agreement: whose life is insured, who owns the policy, who receives the money, and how the business interest is valued.
An agreement and its funding work best when designed together.
Loans and guarantees
Review business borrowing and any personal guarantees. Ask your legal and financial advisers which obligations would remain and how any insurance would be applied.
Company revenue, company value, and a personally guaranteed loan are different inputs. Keep them separate in the planning conversation.
Get the right people around the table
Bring your ownership agreements, policy details, loan documents, and financial statements to an insurance professional, accountant, and legal adviser as appropriate. Ownership and tax treatment can materially affect the result.
A household calculator is a useful starting point for personal needs. Business continuity deserves its own review.