First child? Insurance and finances: How to plan your finances and insurance coverage to protect your family

1. Deciding to start a family

The idea of starting a family brings up many emotions, excitement, enthusiasm... and plenty of questions. Is this the right time? Are we ready? Are we financially prepared? Having a clear understanding of your financial situation can help you approach this new chapter with greater confidence.

Take stock of your family budget 

Start by looking at where you stand financially and what might change over the coming months. There's no need to plan every last dollar. The goal is to have a realistic picture of your income, expenses and financial flexibility, especially if parental leave will result in a temporary reduction in income. 

Next, make a list of the expenses that come with welcoming a child. Some will be one-time purchases, such as a car seat, stroller and furniture. Others will be added to the budget and become recurring monthly expenses, such as diapers, clothing, medications and childcare costs.

Use this opportunity to:

• Assess how starting a family could affect your ability to save
• Maintain a financial cushion for unexpected expenses
• Make sure your emergency fund could cover three to six months of expenses 

Also consider any plans that could be affected if your budget becomes tighter for a while. Will you need to postpone buying a home or a vehicle, taking a trip or making certain retirement savings contributions?

Revisit your existing insurance coverage

If you have group insurance, take a close look at your plan. Pay particular attention to coverage for prescription drugs, hospitalization, healthcare professionals and any other services you may need after your child arrives. Review what coverage is available for your partner and your child as well.

A few questions are also worth discussing with your employer or insurer:

• What family coverage options are available?
• Will my child be covered automatically, or do I need to add them to the plan?
• What deadlines do I need to meet?
• If both parents have group insurance, which plan best meets our family's needs?

This will help you understand what is already covered and which coverages may need to be updated or enhanced.

Keep everything in one place

Create a folder now, either digital or paper, to store your important documents and information.

After your child is born, you can add their birth certificate, health insurance card, tax information, insurance documents and any confirmations you receive.

Having everything in one place will make it easier to file a claim, confirm coverage or complete administrative steps on your child's behalf.

2. Preparing for your child's arrival and parental leave

As your plans to grow your family become a reality, a number of important decisions start taking shape. This is the time to learn about the steps ahead, assess how parental leave may affect your finances and make sure your coverage keeps pace with your family's changing needs.

Plan parental leave

Parental leave will have a direct impact on your household income for several months. Before deciding how long your leave will be or how it will be shared between parents, find out what benefits you may be entitled to and how much income they could provide.

Your province of residence determines which program you’re eligible for:

• In Quebec, maternity, paternity and parental benefits are provided through the Quebec Parental Insurance Plan (QPIP) (This hyperlink will open in a new tab). In addition to maternity and parental benefits, the QPIP includes a dedicated paternity leave benefit.
• In all other provinces and territories, maternity and parental benefits are provided through the federal government's Employment Insurance (EI) program (This hyperlink will open in a new tab).

Because eligibility requirements and benefit structures vary from one program to another, it's a good idea to learn early about the benefits available, the length of leave, parental leave-sharing options and the amounts you may receive.

A quick look at public parental benefit programs

And what about your employer…

Your employer may also offer measures that can help make the transition easier. A discussion with Human Resources or your manager can give you a better understanding of the support available.

When you're ready to share the good news with your employer, consider asking about:

• Salary top-ups during parental leave
• Whether certain insurance coverages will remain in effect
• Vacation and seniority accrual while on leave
• Return-to-work arrangements
• Administrative steps that need to be completed before your leave begins

Review your insurance needs

The arrival of a child often changes the way you think about financial security. You may be wondering which type of coverage should take priority: your own, your child's or both? The answer will depend on your needs, your budget and the protection you already have in place.

Life insurance

Life insurance becomes even more important when your family grows. Beyond the emotional considerations, one practical question can help guide your decision: if one parent were to pass away, would the other have the financial means to cover day-to-day expenses, housing costs, debt payments, childcare expenses and other family responsibilities on their own?

To help assess your situation, review the following:

• Does your insured amount still meet your family's needs?
• Are your designated beneficiaries up to date?
• Does the length of your coverage align with your family's needs?

The exercise is worthwhile for both parents, even if their incomes differ. Income is not the only factor to consider. A parent who earns less but takes on a larger share of unpaid responsibilities at home also makes a significant contribution to the household's financial well-being.

Many new parents choose term life insurance because their protection needs tend to be greatest during the years when their child is fully dependent on them. The amount of coverage and the length of the policy, however, will vary based on your family situation, financial goals and budget.

Disability insurance

An illness or injury that prevents you from working for several weeks or months can put a strain on your family's finances. Disability insurance can help by replacing a portion of your income during that period.

If you have group insurance, start by checking whether disability coverage is included, what it covers and how long benefits are payable.

Your needs will depend on several factors, including:

• Your income
• Your employment
• Your employment status, whether you're an employee or self-employed
• Your available savings
• Any other coverage already in place

Other options may also be worth considering, such as critical illness insurance.

To help you assess the strength of your financial safety net, ask yourself how long your family could maintain its standard of living if one source of income were temporarily unavailable.

Prepare a comfortable and safe environment

Before your child arrives, plan for the main purchases you’ll need, including:

• Nursery furniture and room setup
• A car seat and stroller
• Clothing and accessories
• Diapers and care products
• Other essentials for the first few months

By planning ahead, you can spread these expenses over several weeks and reduce the pressure on your budget.

3. Welcoming your child

The first few days with a baby are often filled with discoveries, precious moments and plenty of adjustment. Between feedings, diaper changes and interrupted nights, you'll gradually find your rhythm.

However, a few administrative steps still need to be taken so you can enjoy your new family life with greater peace of mind.

Register the birth

Birth registration officially records your child with government authorities. In Quebec, this process is usually initiated at the hospital or birthing centre.

It includes, among other things, declaring the birth to the Directeur de l'état civil and registering your child in Quebec's civil status registry.

Obtain official documents

After the birth or adoption, make sure you obtain the necessary documents, including:

• A birth certificate, issued by the Directeur de l'état civil (This hyperlink will open in a new tab)
  • A health insurance card
  • A Social Insurance Number

Apply for parental benefits and family allowances

Once your baby arrives, apply for any benefits and allowances your family may be eligible to receive, such as:

• Paternity, parental or adoption benefits
• The Canada child benefit (This hyperlink will open in a new tab)
• The Family Allowance (This hyperlink will open in a new tab)

Add your child to your existing contracts

Work may be the last thing on your mind right now. Even so, take the time to add your child as a dependent under your group insurance plan and provide your employer with any information needed to update your employee benefits.

Register your child for childcare

As early as possible, start the process of securing a childcare spot (This hyperlink will open in a new tab) in preparation for your return to work. In many regions, spaces are in high demand. Give yourself enough time to explore your options and find an environment that's a good fit for your family.

4. Making the most of your time at home with your child

As your family settles into its new routine, new needs emerge, priorities evolve and longer-term plans gradually come back into focus. Parental leave can be a good opportunity to revisit a few important matters without feeling pressured to tackle everything at once.

Review your family's coverage needs

Now that your child is part of your life, take the opportunity to review your overall protection strategy and determine whether any adjustments are needed.

You may want to:

• Adjust your life insurance
• Purchase critical illness insurance
• Take out insurance coverage for your child

Update your will and legal documents

Becoming a parent often leads you to think about matters that are easy to put off, such as preparing a will. Already have one? Review to make sure it still reflects your wishes. If not, this is a good reason to create one, so you can make provisions for your child and designate a guardian.

Also consider:

• Preparing a protection mandate (mandate in case of incapacity)
• Reviewing the beneficiaries named in your life insurance policies and registered savings plans

These decisions can have significant consequences for your family. A notary can help guide you through the process and answer your questions.

Common-law partners?

In Quebec, the arrival of a child can also affect the legal framework that applies to your relationship. Some common-law partners automatically become subject to the parental union regime when they have a child together.

These provisions apply to common-law couples whose child is born or adopted on or after June 30, 2025.

Among other things, the regime creates a parental union patrimony, which may include the family residence, its furnishings and the vehicles used by the family. The value of this patrimony may need to be divided in the event of a separation or death.

Set up or increase savings for your child

As your new family life begins to take shape, you may want to start thinking about saving for your child's future, particularly through a Registered Education Savings Plan (RESP).

Some families start contributing during parental leave. Others wait until they return to work. Both approaches are perfectly valid. Even small, regular contributions can make a difference over time. The important thing is to choose a savings pace that fits your budget and aligns with your other financial priorities.

5. Adapting to your new family routine

Returning to work marks the beginning of a new chapter. Childcare arrangements, coordinating schedules, evolving income and new expenses all become part of the equation. It may take some time and adjustments before everyone settles into a routine.

Manage the transition to childcare

Starting childcare is an adjustment for both children and parents. If your situation allows, a gradual transition a few weeks before your return to work can help make the experience smoother for everyone.

Prepare to return to work

Before your parental leave ends, reconnect with your employer and ask about any steps you need to take, as well as what to expect when you return. Knowing what's ahead can make the transition easier for both your family and your colleagues.

Adjust your budget to your new family reality

Returning to work often changes your household's income and expenses. Review your budget, taking into account:

• Childcare expenses
• Transportation costs
• Meals and other work-related expenses
• Your child's new needs

Reassess your financial goals

Once your new routine is a little more established, you can begin refocusing on your longer-term plans.

Meeting with a financial advisor can help you update your financial plan and review topics such as government benefits, education savings, estate planning and the insurance coverage you put in place before and after your child's arrival.

You'll have a clearer picture of where to invest your time and money now, and what can wait until later.

Want to keep all these steps close at hand?

Download our checklist to guide you before, during and after your child’s arrival.