Final answer:
Universal life insurance combines level renewable term insurance with a cash value fund, offering permanent coverage with flexible premiums and an accumulation of cash that can be used by the policyholder.
Step-by-step explanation:
The insurance option that provides a combination of level renewable term insurance and a cash value fund is C. Universal life insurance. Unlike annual renewable term life (A) which offers no cash value and focuses only on life coverage that renews annually, and variable life (B) which has investment components that can fluctuate in value, universal life offers a form of permanent coverage with the flexibility of adjustable premiums and the addition of a cash value component.
This cash value accumulates over time and may be used by the policyholder for various purposes while they are still alive, serving as an accessible account.