Final answer:
Disability buy-sell insurance provides funds to a business organization to buy the business interest of a disabled partner. The correct option is C.
Step-by-step explanation:
The type of insurance that provides funds for a business organization to purchase the business interest of a disabled partner is Disability buy-sell insurance. This type of insurance is typically used in partnership agreements to ensure that the disabled partner's share of the business can be bought out in the event of a disability.
The funds from the insurance policy can be used to buy the disabled partner's share at a predetermined price, allowing the business to continue operating smoothly.
Hence, Option C is correct.