PDC corporation, an oil drilling company, has a "key person" variable universal life policy on Mr. Phelps, its vice president of drilling operations. The owner and beneficiary of the policy are the corporation. Which of the following is correct?

Select one:

a. premiums paid by PDC are taxable income to Mr. Phelps.

b. premiums paid by PDC are considered gifts to Mr. Phelps.

c. premiums paid by PDC are tax deductible as a business expense.

d. any death benefit paid will be nontaxable to PDC.