What is Rental Income Protection?
With house prices continuing to rise, the way we live is changing. In 2023, over 1 in 5 households were renting, and for many, this will continue to be a long-term reality (Office for National Statistics).
Essentially, rental income protection is a long-term insurance policy designed to pay out a regular, monthly benefit whilst you are unable to work. This could be for a number of reasons ranging from incapacity caused by illness or injury resulting in a loss of earnings. The benefit actively assists in managing living expenses such as rent, utilities, medical bills, childcare, and other monthly outgoings.
Why is it important to protect your earnings?
- Firstly, if you have signed up to a tenancy agreement, you are committed to paying your rent throughout the duration of the contract whatever your circumstances.
- Going into arrears could have a negative effect on your credit rating. As a result, you hinder your chances of renewing an existing tenancy, obtaining a new tenancy, applying for a mortgage or any other credit agreement.
- Employers are only required to pay you Statutory Sick Pay or SSP for up to a maximum of 28 weeks; after this SSP ceases potentially leaving you with no income.
- With rents at record highs, tenants spend a large proportion of their income on housing costs. Having the means to cover your outgoings if you were unable to work through illness or accident could provide you with a safety net allowing you. Therefore, allowing you to remain in your home and give your landlord added peace of mind.
- Implementing rental income protection reduces stress and the risk of financial hardship, forced relocation, and ultimately, eviction.
- Lastly, should the worst happen the policy may pay out a Death Benefit which your family could put towards the cost of a funeral.
What are the benefits of having Income Protection?
- Financial security if you were to fall ill and be unable to work.
- Protecting your credit score for future needs.
- Additional security for your family allowing them to remain in their home – keeping the children in their current setting be it nursery, school, college or university.
- Continuity of family life.
- Some breathing space, letting you recuperate
- Without the added pressure of worrying about how you’re going to continue paying the bills.
- The ability to increase the cover level should your rent and/or outgoings rise. *Eligibility criteria applies.
- Access to a range of additional services such as free Legal Advice, Counselling, GP Services and much more.
- Where costs for such a policy are a concern, budget options are available that limit the long claim period from long term to 12-24 months
- The ability to convert the product into a suitable arrangement should you purchase a property at a later date.
How we work with you
Traditionally homeowners see the need for protection to cover their mortgage payments, but renters may not have considered protection to cover the rent. As a result, could be exposing themselves to financial hardship should they become ill or injured and not able to work.
A rented property is more than just a place to live, it’s a home. Have you ever thought about how you would cover the cost of your rent or monthly outgoings if you were unable to work?
That’s where Carpenter Box Financial Advisers can help. Our Rental Income Protection Service is designed to provide renters with long-term insurance to help cover monthly outgoings when they are unable to work through accident or illness
Disclaimer; all information has been provided and taken from the Legal & General adviser protection website. Sources include; Office for National Statistics, The GOV.UK – Staturary sick pay page (SSP). Terms & Conditions apply. Please note that the information in this communication is for promotional use.