If you are a renter reading this blog post, have you ever stopped to consider what you would do if you were rendered unable to work, and therefore also unable to keep up with your monthly rental payments and other bills?
We ask this question, because a recent survey by a well-known life insurance provider has once again thrown light on the subject of the millions of renters out there who lack a financial safety net in the event of the worst happening to them.
What exactly did the survey discover?
The poll that we are referring to was recently reported on by the Financial Times’ FTAdviser website. Specifically, the insurance specialist found that just 5% of renters had taken out critical illness insurance, which is the type of cover that provides a tax-free lump sum in the event of the policyholder suffering a serious illness such as cancer.
It was also discovered through the research that a mere 3% of renters had an income protection policy, and even life insurance was only held by one in four (24%) of those quizzed.
That’s not a great picture for tenants, although it’s worth noting that homeowners didn’t fare much better in this regard. The FTAdviser said that just 11% of those who owned their own home had taken out critical illness insurance, while 7% had income protection. A third, 33%, had arranged a life insurance policy to provide a one-off tax-free lump sum in the event of their death.
Renters shouldn’t assume they will never need protection cover!
The above situation may be especially worrying for renters, though, given that it is people in this category who typically face higher housing costs. Indeed, it has been said that while homeowners fork out an average of £525.90 a month to cover their mortgage responsibilities, renters typically pay £658 in rent every month.
When one considers this alongside the claim by almost a third (31%) of renters that they have previously taken an extended period of unpaid time off work as a consequence of illness or to care for a relative or friend, it suddenly becomes obvious just how crucial the right protection insurance could be.
This makes it all the more concerning that when the survey respondents were asked why they had not taken out life insurance or critical illness insurance, 21% of renters said it was not a financial priority for them. The equivalent figure for homeowners was 16%.
Are statistics like the above putting you in mind of your own past attitude to protection insurance, and making you wonder whether now is the time to look seriously at investing in a suitable policy? If so, we provide a completely free and no-obligation service to help you make sense of the possibilities on the market today; simply call 01604 436919 to get chatting to us.