Although we are more than a month into the New Year, some resolutions may still be doable. In fact, the number one New Year’s resolution (ahead of even losing weight!) is financial.  Franklin Covey, the global leadership and effectiveness training and products company, conduct a survey each year on our yearly resolutions.

The top three are:

• Improving personal finances (like eliminating debt or saving money)
• Losing weight
• Beginning a healthy habit like exercising or eating more healthy foods

Financial Priorities

Suze Orman, the popular financial expert, suggests that the following three items be among the top priorities to improve your financial health:

• Savings
• Retirement
• Life Insurance

She suggests that life insurance provides a priceless peace of mind. In fact, it can be the foundation of a savvy family financial plan. Any other planning can be fruitless if life insurance doesn’t exist.

Term Life Insurance

Orman suggests that if anyone, including a partner, parent, spouse, child or other relative, depends on you for financial support, life insurance is a necessity. She recommends to keep it simple and buy term life insurance.

Specifically, she says most people need to consider a 20 year level term policy that has a value equal to 25 times the amount of annual income your dependent needs to live securely.

So, if your annual income is $40,000, you would need to purchase a $1 million dollar term life policy.

The purpose of term life is to have the funds there to protect your dependents before you’ve had enough time to accumulate enough funds to do so. That’s why term insurance has limits (of 20 or 25 years for example).

One of the other attractions of term life is that it’s the most affordable kind of insurance, providing a lot of coverage for your insurance dollar.

Photo via Mai Le