Why would I set up a 'own life under trust' arrangement?

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To avoid the problem of having the claim proceeds paid to the company and the uncertainty about whether they’ll be liable to corporation tax, the shareholders may prefer to enter into an arrangement outside of the business. The key person could take out an own life policy to be held in trust for their fellow shareholders. However, the business trust wouldn’t be suitable for this purpose, so a solicitor would need to draft an appropriate trust. In this event, the surviving shareholders could introduce the claim proceeds to the company as required through their director loan accounts. This alternative approach could be more tax efficient.