Final answer:
Buy-sell plans are indeed commonly funded by life and disability insurance policies to ensure business continuity in the event of a partner's death or disability.
Step-by-step explanation:
The statement that buy-sell plans are normally funded by life insurance and disability insurance is true. A buy-sell agreement is a legally binding agreement between co-owners of a business that dictates how a partner's share of the business is reassigned if that partner dies or becomes disabled. Typically, life and disability insurance policies are taken out on the lives of each partner, with each being the beneficiary of the other's policy. This ensures that in the event of death or disability, funds are available to purchase the incapacitated or deceased partner's share of the business.