What type of business plan involves the business owning policies on its participants?

The type of business plan that involves the business owning policies on its participants is the Entity Plan. In an Entity Plan, the business itself is the policyholder and is responsible for purchasing life insurance policies on the lives of key individuals or owners involved in the business. This arrangement allows the business to receive the death benefit directly upon the death of a covered individual, ensuring that the company has the necessary funds to buy out an owner's share or manage financial obligations when a key person passes away.

This plan is particularly beneficial for partnerships or closely-held corporations, as it simplifies the buyout process by providing liquidity in the event of the death of an owner. Furthermore, the ownership structure allows the business to control the policies, ensuring that the benefits are used according to the business's needs and objectives.

The other choices represent different types of insurance arrangements typically used in business contexts but do not involve the business itself owning the policies in the way that an Entity Plan does.