Insurance is an important aspect of life in modern society. Most people experience their initial first-hand encounter with insurance when they start driving, although many teens have this covered by their parents. Auto insurance is required by law, and for 16-year-old first time drivers, it is quite expensive. This is because new drivers are the most likely people on the road to get into accidents, due to their lack of skills and experience combined with the natural recklessness that so often accompanies youth.

While auto insurance can seem like an incredibly voracious money sink, it can be a lifesaver in the event of an at-fault accident. Of course if someone gets into an accident but is not at fault, the other driver is liable to pay for damages. However, if a driver is the person at fault, or if the accident only involves one vehicle (such as backing into a telephone pole), the owner of the car must pay damages. If the driver did not have insurance, this would come out of his own pocket - an expensive inconvenience at best, and a financially ruinous disaster at worst. If someone drives an economical car because of financial reasons and then drives it into a ditch, fixing it will be far more within his means than if he drives it into the back of a Lamborghini. In such cases, insurance can be a lifesaver

Term life insurance lasts for a set term, such as 30 years. In the above scenario, the husband would have a policy that his paid to his wife, assuming he dies within 30 years of opening the policy. If he does, the wife receives a payout. If he dies after the term expires, the payout is much less, and possibly nothing. While this seems like a potential recipe for disaster, take into consideration that the husband and wife are likely close in age. Statistically, the wife is probably unlikely to outlive the husband by enough time for savings to run out. Even so, the risk involved with this scenario means that term insurance is much cheaper

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