Because it’s more than just a house, it’s your home…
As mortgage advisers, we look at life assurance as part of the process, but in reality, we aren’t protecting the mortgage, we are protecting your family or lifestyle, or both!
Having been involved in the financial services profession for some time now, I understand how important this differential is, and actually, taking out some form of life assurance is not just for people with mortgages, but for those who rent too.
Renters still have monthly payments to make and bills to pay plus they are still at risk of life throwing them a curve ball too.
Whether people own their property or are one of the growing number of people who choose to rent, it’s more than just a house, it’s your home. It is important that when life happens, the financial impact is taken care of so you can deal with the emotional side.
Most people who own their home have taken steps to address this but alarmingly, a large percentage of those who rent have not and invariably, if that curve ball strikes, they could find themselves just one rental payment away from being evicted. That’s not ideal, so let’s look at why those who choose to rent their home should also consider protection – to help them when they need it most so they do not lose the roof over their head or their lifestyle should something go awry.
The number of people who rent in the UK has doubled in the last 10 years and there is an increasing trend towards renting.
UK rents are expected to climb by over 15% in the next 5 years, and 7 out of 10 renters have said they are likely to buy a property of their own in the future. Insurance policies associated with protection are usually based on your age and health at the time of taking out the cover. So, surely it makes sense for these policies to be taken out as soon as there is a requirement? Most plans can be adapted to go some way towards future proofing your needs.*
It’s important to be protected as you are contracted to make the rental payments for the length of your lease. You also have bills to pay too: broadband, mobile, energy, water, council tax – there’s no getting away from them!
Going into arrears could affect your chance of a new tenancy or gaining a mortgage and could also mean you get evicted. With housing costs making up around 40% of income, and with rents likely to increase over the coming years too, if life happens, consider how long could you and your family survive.
Chatting with a protection specialist can help you identify what steps you need to take that are specific to your situation.
A single person will have different requirements to that of a couple, or those with families, so there is no ‘one size fits all’ approach. Some people can rely on savings to tide them over, others may not have that option or would resent using that money for this purpose. Would you like to see your savings being used for a purpose other than what you intended? Maybe you had been saving hard for a house deposit…
Getting the right cover with the right company can be a minefield. It’s not that simple, so surely it’s better to work with someone who knows the way, rather than try and make it across on your own?!
Everyone will have different needs and that’s how a protection adviser can help you choose the protection that fits your lifestyle. Some insurers have recognised this and have designed a product specifically for this – but looking at a bespoke solution should also be considered. There are a range of policies out there which can address needs either under one roof, or separately if this is better for you. By consulting with one of the protection specialists at Temple you will know what’s possible, establish a budget, and make an informed choice without any pressure or obligation.
Life Assurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
*statistics sourced from Legal & General product literature