A study from Sainsbury’s Bank reveals that renters are significantly less likely to have life insurance or critical illness cover, with just 26% of renters taking out a policy in comparison to 41% of homeowners. In the past 10 years, the number of households renting privately with children has risen by almost 800,000 to nearly 1.6 million. Renters are being urged to consider what their partner or family would do if they unexpectedly needed to cover housing costs such as rent and factoring contributions and other monthly out goings if the unthinkable was to happen.
Based on the average monthly household expenditure in the UK (£572.60) the calculator suggests that the average UK family which rents, should allocate £687,000 worth of life cover (25 years) as a financial safety net. Despite being less likely to have life insurance or critical illness cover, 54% of renters are more concerned than homeowners (48%) about the financial implications should they pass away before old age. Also 21% of renters living in private accommodation worry about this situation on a weekly basis compared to 16% of homeowners.
The survey found the top reason renters do not have life insurance is they believe they don’t have enough equity or money to have a life insurance policy (29%), in comparison to homeowners (11%). Important life events are the top reasons people decide to financially protect themselves. Buying a house is the main reason people chose to purchase life insurance (34%), followed by other memorable life stages, such as having a child (17%) and getting married (12%). Unfortunate experiences, such as becoming ill (9%) also prompt people to take out a policy.