People who rent their homes are significantly less likely than owners to protect themselves or their families, new research shows.
Just over a quarter (26%) of renters in the UK take out protection insurances such as life insurance or critical illness cover, according to Sainsbury’s Bank. In comparison, 41% of homeowners take out these products, suggesting that the myth still persists that cover isn’t needed unless you own your home.
In the last 10 years, the number of privately rented households with children in the UK has doubled to nearly 1.6m. Based on average monthly household expenditure of £572.60, Sainsbury’s Bank calculates that the average renting family should allocate £687,000 worth of life cover to act as a financial safety net over the course of 25 years. Yet nearly three times as many renters as homeowners believe that they don’t have enough equity or money to need a life insurance policy.
In a survey, the most common reasons given by renters for not taking out life insurance were:
- I don’t have enough equity or money to need to have life insurance (29%)
- I haven’t got around to it yet (18%)
- I have no dependents in the event of my death or illness (14%)
- I’m too young to have life insurance (13%)
- There are no serious hereditary illnesses in my family (9%)
Despite being less likely to have life insurance or critical illness cover, however, 54% of renters are more concerned than homeowners (48%) about the financial implications should they pass away unexpectedly. In addition, 21% of renters living in private accommodation worry about this situation on a weekly basis, compared to 16% of homeowners.
There’s no doubt that buying a house is the main reason people decide to take out life insurance (34%), followed by other memorable life events such as having a child (17%) and getting married (12%). Unfortunate experiences, such as becoming ill (9%), also act as a prompt.
Sainsbury’s Bank head of insurance Karen Hogg said: “As more people are raising families in rented accommodation, we need to shift our thinking in terms of life and critical illness cover only being relevant for people with a mortgage. That’s just not the case. All people need to consider what protection their partner and children may need should anything happen to them, including how to cover rent, bills and household essentials.
“Our research found that people are more likely to worry about the financial implications of their passing rather than taking action to alleviate any concerns and protect themselves for the future. Taking out a life insurance policy can help give you peace of mind and ensures you have the financial protection in place.”
Life insurance, critical illness cover and income protection insurance are often more affordable than our customers expect, and comparing quotes can help you find the right cover at a price you can afford. Premiums tend to be cheaper the younger you are when you take out the policy, while other factors such as your health and whether or not you smoke also play a role.
Read our article on why you might need life insurance when you’re under 30. You might also be interested in a survey showing that millennials are more likely to choose an income for life than a lottery jackpot!