For business partnership/shareholder protection, it is common to use a discretionary business trust, otherwise known as a flexible business trust.
As the name suggests, payment of the trust proceeds is made at the trustees’ discretion, usually from a list of potential beneficiaries or classes of beneficiary that the settlor has previously stipulated. In this context this will be the remaining business owners.
The main advantage of a discretionary trust in this context is that new business partners can be integrated into the agreement without the business having to “start over” with the trust planning; the new partner will just need to set up their own life assurance policy in trust and will automatically become a potential beneficiary of the existing trusts. Likewise, if a partner chooses to leave the business, they can be removed as a beneficiary fairly easily, and ownership of their own policy can be passed to them by the trustees. On their subsequent death, the claim proceeds will form part of their estate for IHT purposes.