I am buying a Assisted Living Facility.  The purchase price does not 
include the employment service of the seller but I am employing the
seller to work for me for three years because he has a reputation and
experience in the business. I want to find out about key man insurance
terms and pay outs if the seller walks away (not dies) during these
three years.

schmooz...

From what I've seen, "key man" insurance only covers
the death of a critical employee. If he walks out, it
would likely come under the venue of "breach of contract",
assuming you've been wise enough to draw up a contract.