Which of the following statements regarding entity purchase buy$-$sell agreements is correct?

If the business has five owners, $20$ life insurance policies must be purchased.

When one of the owners dies, the surviving owners will have an increased cost basis in theirshare of the business.

When an owner dies, the death benefit received by the business is income tax$-$free as long as the rules of IRC Sec. $101($j$)$ have been followed.

The business entity will purchase a life insurance policy on each owner and will pay thepremiums, which are tax deductible as a business expense.

None of the above