Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?

Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?



a. partner B buys a policy on partner A in the amount of $75,000 naming Partner A as beneficiary.
b. partner A buys a policy on partner B in the amount of $150,000 naming Partner A as beneficiary.
c. partner B buys a policy on partner A in the amount of $150,000 naming Partner A as beneficiary.
d. partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.


Answer: d. partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.

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