Key person insurance is life insurance on a key person, usually the owner or a highly valuable employee on whom the continued successful operation of a business depends. The business entity is the beneficiary under the policy. If a key person dies, the company receives the insurance proceeds that can be used for expenses until a suitable replacement can be found "or the business is sold. Key person insurance usually consists of a term insurance policy. Determining the ideal amount of key person insurance is part of the due diligence process.