There's the nature of the policy (term life or permanent life?). There's the owner of the policy (the business? Or a cross-purchase by partners?). There's the amount of the policy (is it sufficient to pay the value of the partner's share of the business?). There are tax issues, depending on how the payment of premiums is arranged.
The business owners should speak with their insurance, accounting and legal advisors to make sure that the policy they choose best suits their needs.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.