Why renters need critical illness insurance

So, you're renting, and while you might associate critical illness insurance with monumental life milestones like getting hitched or buying a home, the truth is, it's just as vital for all you renters out there.

Why renters need critical illness insurance

It's not wise to gamble with your finances, in the swirling whirlwind of our economy.

The proof is in the numbers, with private rental prices paid by tenants in the UK rising by 4.8% in the 12 months to April 2023, up from 4.7% in the 12 months to March 2023.*

Here's where critical illness insurance becomes your secret weapon. Imagine this: you’re sadly hit with a severe illness. While you're battling health issues, the last thing you want to worry about is money. And that's precisely what this policy does - it can help take care of your rent as well as other living costs.



When plans change

Sadly, life doesn't come with a crystal ball, and a critical illness diagnosis could put a dent in your plans. A diagnosis could affect your ability to work full time, ultimately making it harder to make your rent payments every month.

Legal and General found that 78% of millennials prioritise their rent or mortgage payments over a life insurance payment.** But consider this: if you were diagnosed with a critical illness, who would pay your monthly rent payments in the first place? By making sure life insurance is a priority, you wouldn’t have to worry about affording your rental payments, if the unthinkable happened.

You could get a lump sum payout, with a critical illness policy in your back pocket. This means you won't have to raid your piggy bank, ask your buddies for a bailout, or take a loan to handle your rent and bills. How about that for peace of mind?



How much critical illness cover do you need?

There is no one set amount of cover that you’d need. Plucking a number out of thin air could leave you under insured, or over insured.

Your lifestyle is one of the primary considerations when taking out a life insurance policy. Do you smoke, or are you a teetotaler? Fitness freak or couch potato? Your lifestyle choices, along with your medical history, will play a big part in determining the cost of your cover.

Our critical illness insurance experts will guide you through everything to help you find a plan that suits you to a tee. They are there to listen to your needs and wants, so they can provide expert advice on the amount of cover that could be best for you and your loved ones.

There’s more than critical illness insurance

If you're not convinced that critical illness cover is the right policy for you as a renter, let’s look at income protection insurance.

Income protection could be your secret weapon if you're a renter, either self-employed or working more than 16 hours a week.

This policy is there to support you if you're unable to work due to illness or injury. You'll choose the length of your deferred period, and it’s after this amount of time, that the payouts kick in.

Typically, an income protection policy can cover up to 60% of your income, which should give you the money you need to keep up with rent payments, and give a helping hand with the essentials too!

But how can income protection help with your rent?

You can cover up to 60% of your income, so the pay-outs could help you pay the rent, and then some! Plus, you don’t have to use the pay-outs from your income protection policy just for rent.

Your policy could help you pay the bills, cover your food shop, contribute towards childcare costs - you name it. This financial safety net can give you breathing space when times are tough, so you can funnel your energy into getting back on your feet.

Plus, if you’re after a quick sample of how much your cover could cost, why not try our simple income protection calculator and see how much your policy could cost you.

It’s not just for your loved ones

Life can be as unpredictable as a thriller movie, and a critical illness diagnosis can turn the plot upside down. If this disrupts your ability to work full time, it can make keeping up with rent payments challenging.

But here's a plot twist: if a critical illness strikes, the financial burden can be colossal, potentially dwarfing the cost of a monthly insurance premium. A critical illness policy offers a lump-sum payout, providing you with a parachute, so you don't have to crash into your savings, ask your loved ones for loans, or deal with banks for credit to cover your rent and bills.

And the most important thing to remember about critical illness insurance? It's not just for your loved ones; it's also a financial security blanket for you.

Income protection vs critical illness

Imagine these two as Batman and Robin of the life insurance world, they're a real dynamic duo.

First up, income protection. This policy is like a dependable monthly salary, swooping in to save the day when you're unable to work because of any illness or injury. No matter what has knocked you off your feet, income protection has got you covered.

Now, on the flip side, you've got critical illness cover. This one's a bit more specific - it's only available to claim on when you're hit with a major, life-altering illness. But if you ever had to claim on your critical illness cover, you could use the lump sum any way you like.

So, what's the takeaway here? While income protection acts like a regular paycheque, helping you keep up with the rent and everyday bills, critical illness cover is your rainy day fund, stepping in for the heavy stuff when serious illness strikes.

Either policy could be there to take care of you, so you can concentrate fully on getting better, if the unexpected were to happen.

Getting advice - it’s worth it!

Choosing the right cover can feel like navigating through a thick fog. But don't worry, you’ve ended up here for a reason, take this as your sign to get life insurance.

Our insurance experts are there to simplify and explain any complex life insurance jargon and provide clear, concise advice. They’ll consider your unique circumstances, including your health, lifestyle, and occupation, and can help you tailor your cover to suit your needs.

The verdict

After thinking more about renting and life insurance, do you still think life insurance is just for homeowners?

Get a tailor-made plan based on what you need most. The best part is, we’ll do the hard work for you, while you sit back and relax.

*gov.uk


**Legal and General - The millennial insurance gap