In my travels, I've been astonished to learn how many of you don't have the basic provisions in place to protect the people you love so that a disaster (big or small) doesn't come along and sabotage your financial life. I want you to be sure that you've secured the following provisions for yourself and your family. The good news is that none of these are a) all that complicated or b) all that expensive. But if you don't have them and you hit some rough spots in your life, I guarantee you'll be sorry.

  1. Make a Will. Particularly if you're a parent, you absolutely must have a will. Why? It's the only document that allows you to name guardians for any minor children. Even if you don't have children, without a will the state will decide who will get your belongings if something happens to you. Personally, I'd rather make those decisions myself.
  2. Create a Living Will and Healthcare Proxy. The first of these documents tells a doctor or hospital whether or not you want life support if you're deathly ill or injured. The second names an individual who can tell the medical establishment exactly the kind of care you want. Both are simple but crucial forms.
  3. Get Life Insurance Where Appropriate. If you have dependents (people counting on your income) then you need life insurance. For most people, term insurance (which consists of a death benefit without any investments attached) is the way to go. Why? Because it's the best way to get the amount of insurance you need for the least amount of money.
Note: Single people do not generally need life insurance, so don't let some salesperson try to talk you into buying it. Instead, they need disability insurance so that if they're injured or unable to work they'll have a stream of income and won't end up back on their parents' couch.

How much life insurance will you need, and more importantly, how much will it cost? Read on .
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.

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