3 other ways to protect loved ones

1 LIFE INSURANCE

This is essential if your partner or children rely on your income to cover the mortgage or rent. Life insurance (from £5 a month) will pay out a lump sum or make regular payments to your family if you die. It won’t pay out if you can no longer work due to illness or injury (you’ll need income protection or critical illness insurance for such circumstances). There are different types of life insurance, each with pros and cons, so look closely at which one suits you. If you only need cover that runs until you have paid off the mortgage or until your children reach 18, consider a fixed-term policy. It’s also worth looking at Family Income Benefit, which pays out a regular income rather than a lump sum to your dependents and is a cost-effective way to provide protection.

2 LASTING POWER OF ATTORNEY

It’s scary to think about but there may come a time when we can no longer manage our own money. You can appoint someone to look after your financial affairs by naming them in a legal document called a Lasting Power of Attorney (LPA). There are two types of LPA: financial and property (the most common), and health and welfare. LPAS are registered with the Office of the Public Guardian and this costs £82. Find out more at gov.uk/power-of-attorney. These are hard to set up on someone else’s behalf so it’s important to organise these early.

3 JUNIOR ISAS

Imagine how amazing it would feel to be able to give your child a deposit for their first home. If you paid £20 a week into a Junior ISA from when they were born, it could be worth more than £30,000 by the time they turn 18, according to Wealthify. Compare Junior ISAS at moneysupermarket.com.