Starting a family brings with it many more responsibilities. And while it may not be something you want to think about, it’s important to start putting some plans in place to take care of your family, and your child, should anything happen to you.

People often start thinking about life insurance when they have children. That’s often because they’ve recognised the importance of long-term financial security, the costs of raising a child to adulthood, and how difficult that might be should your partner or wider family have to raise them without you.

Life insurance is designed to pay out a lump sum in the event of your death. Having a clear understanding of your family’s current lifestyle and commitments will help you determine how much life cover you might need. You’ll need to factor in things such as mortgage or rent, household bills, as well as all the other costs associated with having a family, including childcare costs, education and general living expenses.

You might feel that life insurance is an unnecessary expense you could do without, but it’s important to appreciate just how valuable it could be to your family if it is needed someday. Provided you’re in good health, the sooner you take out life insurance, the cheaper the premiums will be. A life insurance policy is calculated based on risk and therefore the premiums tend to increase as you get older.

If you’re in a relationship, it’s worth considering taking out a joint life insurance policy, or two single policies. While a joint life insurance policy is usually cheaper, these policies only pay out once, when the first person dies during the policy term. If that should happen, the surviving partner will need to take out a new single person policy.

As your family grows, you’ll want to review and adjust your life cover to reflect your changing circumstances.

Once you’ve got a life insurance policy in place, you may want to consider other protection policies that can provide a safety net if you become ill or aren’t able to work.

For example, critical illness cover will pay out a lump sum if you’re diagnosed with a serious illness, whereas an income protection policy will pay out a replacement income for a specified period if you find yourself out of work or unable to work. You might also want to consider a private health insurance policy, which can cover the costs of medical treatment if you’re treated privately.

These types of insurance policies can be complex and sometimes confusing. For example, some critical illness policies will only cover certain types of cancer, and not others. A professional independent financial planner can give you advice on the best insurance policies to suit you and your family’s circumstances. They’ll also be able to help you review any policies you already have, to make sure they reflect your change of status – and financial obligations – as a new parent.

Starting a family is also the ideal time to make sure you have an up-to-date will in place. Not only is a will the best way to make sure that – in the event of your death – your assets will be distributed according to your wishes, but it also gives you the opportunity to name a legal guardian to look after your child if you were no longer around.

This legally-appointed guardian will have full parental responsibility over your child, and will be required to always act in the child’s best interests. You can appoint anyone over the age of 18 to be your child’s guardian in the event of your death – this is usually a family member or close friend. You can also appoint more than one guardian, in case circumstances change.

Appointing a guardian in your will is also good way of preventing potential legal disputes among family members about who should take responsibility for looking after your child.

While writing your will and getting your legal affairs in order, it’s also a good idea to arrange a Lasting Power of Attorney (LPA). An LPA lets you appoint someone to make financial and health-related decisions on your behalf, should you become incapacitated or unable to make those decisions yourself.

Arranging an LPA doesn’t mean losing control over important decisions that affect you, but it could make life less complicated, time-consuming and expensive for your loved ones should they need the legal permission to act on your behalf in the future.

After you’ve made all of the necessary decisions about insurance, your will, and guardianship, you might want to consider placing money into trust for your child’s future.

Trusts can be particularly useful when you are looking to make sure large sums are being managed effectively on behalf of younger generations. Using them alongside the intentions stated in your will can help you retain an element of control over those assets, even when you’re no longer around.

For example, a bare trust allows assets to be managed by trustees on behalf of a child until they are 18. In fact, if a child under 18 inherits money, a bare trust is automatically created and executors, parents or guardians look after the money until they are adults.

Alternatively, a discretionary trust can be used to help pay for school or university fees, or to prevent a child having control of assets until they are older and more responsible.

Parents can also arrange a trust if their child is disabled or vulnerable, or is unlikely to be able to look after themselves when they are older. A trustee can be appointed who will distribute sums of money from the trust to pay for care costs or treatment, or special educational needs.

It can be difficult to think about the possibility of your own death or disability, especially when you’ve just started a new family. But it’s absolutely the right time to start planning ahead and begin making sure that – even if the worst does happen – your family will be cared for and protected.

At Amber River, we make it easy to have those conversations, because our experienced and knowledgeable independent financial planners can help you to make informed decisions that help put your mind at ease. Together, we can help you shape financial plans that can create a secure and prosperous future for you and your family.

To speak to one of our team about Life Landscaping® or to arrange an appointment, call 0800 915 0000, or alternatively use our contact form to contact a financial planner.