The Board of Trustees of ABC Associates, a nonprofit corporation, decides that its CEO and her management team are a great asset to the organization. Therefore, the Board of Trustees elects to purchase life insurance on each of the organizations executive team. In which scenario would the insurance cost be an allowable cost to the federal program?

a. The life insurance policies all name ABC Associates as the beneficiary and treats the cost of the insurance policies as part of the executives pay packages.

b. The life insurance policies name the individual families of the CEO and her management team as the beneficiaries. The cost of the insurance is included as part of their pay packages.

c. The life insurance policies name ABC Associates as the beneficiary, but does not include insurance costs in the pay packages of the management team.

d. The life insurance policy names the ABC Associates as the beneficiary, and ABC can demonstrate the cost of the insurance is reasonable and necessary.