Final answer:
Under a partnership cross-purchase plan with 4 partners, the number of life insurance policies needed is 12, which is calculated using the formula n(n - 1).
Step-by-step explanation:
Under a partnership cross-purchase plan, the number of policies required is calculated based on the number of partners in the business. For each partner, a life insurance policy is purchased on them by every other partner. In the case of 4 partners, each partner needs to buy a policy on the other three partners.
To calculate the total number of policies needed, you can use the formula n(n - 1), where n is the number of partners. Applying this formula for 4 partners:
4(4 - 1) = 4 × 3 = 12
Therefore, for 4 partners, a total of 12 policies are needed for a cross-purchase agreement.