There are many words like “should” and “ought” we use to tell ourselves and the world around us that we have obligations. There are other words to tell us what we want and need. When we put together all the pieces in a decision, we choose to do things when we have needs we cannot satisfy in any other way. So where do we start? It all starts with the word “I”. There is always a “me”, and what I have is “mine”. This is selfish. It may not be pretty, but nature has built it into us to help us survive. We are weak when born, depending on parents for everything.

As we grow, we redefine the world into what is mine and yours until we have independence and the right to choose for ourselves. When young, we never think of our own deaths. We do not have the experience to understand what effect an early death can have on those around us. So until we come to understand that death does affect people emotionally and financially, there is no perceived need to satisfy. We can assume there are no obligations to meet. We do not buy insurance for others. Yet this is untrue.

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Term Life Insurance as mentioned is a policy where in you keep paying your premium for a stipulated period of time. After the tenure is over the accumulated some is handed over to you. You could also opt to renew these policies once their term expires, by paying nominal revised premiums (higher in most cases). The two major diversification of this type of policy are Group Term Life Insurance and Level Term Life Insurance. Group term Life Insurance is usually taken by an employer for his employees, where in the employer pays on behalf of his employees by reducing that particular amount from their salary. For level term insurance the insured selects a particular period and pay premiums for the selected period. The policy automatically matures at the end of the selected period. Once you select the term say 5-10 or 15 years you cannot alter it. This type of insurance is ideal for those people who are not able to make long term financial plans.

Permanent Life Insurance is an expansive policy where the premiums are paid as long as you want to enforce the policy. In a permanent Life Insurance policy you pay premiums for an indefinite period irrespective of the fact they exceed the amount to be distributed to your dependents in case of death. (more…)