Fatherhood is a wonderful journey to embark on, filled with love and responsibility. This role, whilst rewarding, comes with its own set of challenges. Amid the hustle and bustle of daily life, whether that’s juggling work commitments, household maintenance or helping with homework, many fathers live in the present but overlook a vital aspect of their role…future planning.
It’s crucial for dads to recognise the fact that their contributions are beyond daily duties; they also need to ensure their family’s security in the long run is secure. This bigger picture on fatherhood helps encompass not just the immediate needs of their children, partners and loved ones but also the long-term wellbeing of the entire family unit.
Life can be unpredictable, and while we can’t control every outcome, we can take proactive steps to help prepare for the unexpected. This isn’t necessarily a financial obligation but more an act of love that demonstrates a father’s commitment to his loved ones’ future.
3 steps to financially prepare for the future
Essential steps in this planning process could include:
- Creating a Will
A Will is one of the most critical documents you can create as a parent. This is because it ensures your assets are distributed exactly as you wish, meaning your children can receive an inheritance if something were to ever happen to you. This could be specific sentimental items or an amount of money to help towards future costs such as an education fund, a first home or a small legacy.
Without a Will, the process after you pass away can become complicated, which could cause preventable stress to your loved ones during an already difficult time. It could also prolong the settlement of an estate. This can seem like a daunting task, however there are many resources available to guide you through the process. For example:
- A financial advisor
- Using a dedicated Will writing service
- Following guidance from the UK government
- Start building an emergency fund
An emergency fund is essential for maintaining your family’s financial stability during unexpected situations, such as household repairs or medical expenses.
Even if you start with setting aside a small amount each month, having a dedicated savings account for emergencies can provide reassuring peace of mind when you need it most.
Aim to set aside an affordable portion of your income each month or establish specific savings goals to build this fund over time. Each father has his own unique style of parenting, whether it involves exploring the great outdoors, engaging in shared hobbies, or imparting important life lessons, whatever you bring to the table, it’s essential to be ready for any situation that may arise.
You could set up an easy access savings account such as an ISA, which allows you to invest up to £20,000 tax free, each financial year.
- Consider life insurance
Although it can be uncomfortable to think about our own morality, considering life insurance is a crucial part of planning your loved ones’ future. It offers financial protection by paying out a cash lump sum in the event of you passing away, ensuring that your family can maintain their current lifestyle and not face financial hardship.
A pay out can be used as your beneficiaries wish but is often used to clear a mortgage (securing the family home), replace a lost income, provide an inheritance and/or cover rising family living expenses.
As a father, you may want to arrange a life insurance to cover high childcare costs; according to daynurseries.co.uk, the average cost of full-time childcare in the UK is an eye watering £225.70 per week. Additionally, costs associated with primary school can add up to £864.87 per child every year and £1,755.97 per child every year for secondary, stated by CPAG.
There’s a suitable policy option to meet every individual’s unique needs. Ultimately, life insurance for dads acts as a safety net, offering reassurance that your loved ones will be financially safeguarded in unforeseen circumstances.
Policy options include;
- Level term – Provides a fixed pay out sum (sum assured) regardless of when you pass away during the policy term.
- Decreasing term – Provides a pay out amount which reduces in value over the lifetime of the policy, making it ideal for mirroring a repayment mortgage.
- Whole of life insurance – Guarantees a pay out when (not if) you pass away. Because a pay out is guaranteed premiums are significantly higher compared to term-based options above.
- Over 50 plans – Provides a guaranteed pay out for UK residents aged 50 – 85. The maximum sum assured does not exceed £20,000 and so tends to be used to cover rising funeral costs, instead of more substantial expenses such as a mortgage.
You can compare dads life insurance quotes for free through a regulated broker such as Reassured.
Additionally, some insurers now offer free or discounted Will writing services included with their life insurance policies as an added bonus.
By taking the time to address the security and financial future of loved ones is an important aspect of family life. Ultimately, being a father means not only nurturing children during their formative years but also through to early adulthood and beyond – securing their long-term future.
The cost of life insurance is largely determined by the likelihood of a pay future out. Therefore, if you are in your senior years with pre-existing health problems, you will pay significantly more than if you are a non-smoker, in good health in your 30s.
So, why not seize the day and secure a policy sooner rather than later, to lock in the lowest possible premium for many years to come?
