What is a key characteristic of ordinary (straight) life insurance?

Ordinary life insurance, also known as straight life insurance, is primarily characterized by its provision of cash value accumulation over time. This type of policy not only provides a death benefit to the beneficiary upon the insured's passing but also includes a savings component that builds cash value. As premiums are paid, a portion goes towards the death benefit while another portion contributes to the cash value, which grows tax-deferred.

This cash value can be accessed by the policyholder through loans or withdrawals, providing a source of funds if needed during the insured’s lifetime. This accumulation feature distinguishes ordinary life insurance from term life insurance, which only provides coverage for a specific period without any cash value benefits.

The other choices reflect characteristics that do not accurately describe ordinary life insurance. For example, limiting coverage to a specific term aligns more closely with term life insurance rather than ordinary life insurance. Similarly, the premium for ordinary life insurance is generally higher due to the cash value feature, contrasting with term insurance, which usually has lower premiums because it covers a defined period without such benefits. Finally, ordinary life insurance is not designed solely for children; it is meant for individuals of all ages who wish to establish long-term coverage with cash value benefits.