In 2017, there were around five million households living in private rented accommodation.1 Symptomatic of the struggle for many young people to get on the housing ladder (first time buyers now need an average deposit of £33,127 outside of London and a staggering £114,952 in the capital2), the number of private renters overtook those living in social housing for the first time since the 1960s in 2013 and the gap has only widened since. It’s expected that a quarter of all UK households will be renting privately by the end of 2021.1
One issue which has remained in recent years is that of financial security, particularly with the younger generation. Those aged between 25 and 34 years of age and living in rented accommodation are amongst the most financially fragile in the UK, according to research3. In fact, 45% of this group would only be able to survive for a month or less if they lost their income - that’s almost double the national average3.
Protect your income, secure your household
For many, taking out a mortgage comes hand-in-hand with protection policies, such as life insurance or critical illness cover, which are often sold by an adviser at the time of the mortgage application. However renters are unlikely to be offered such protection policies when signing a rental agreement.
In fact, according to a poll, around 5.8 million renters don’t have a plan B in place to cover their rent if they weren’t able to earn an income for 3 months or more due to illness.4 However, one protection policy available to individuals is income protection (IP) insurance, which offers a regular income if the policyholder is unable to work due to illness or injury.
This long-term policy continues to pay until you are able to return to work, retire or pass away. It is quite literally a lifeline for some people, enabling them to keep their home and pay the bills at what is likely to be an already stressful time. But even in the face of financial fragility, many private renters are still failing to take out IP insurance.
Sovereign Assured Partners Limited, which is a wholly owned subsidiary of Sovereign Health Care, has partnered with IP provider PG Mutual to offer Income Protection Plus, a comprehensive policy for individuals and businesses.
Choosing the right cover
Here are four good reasons to consider Income Protection Plus:
1. Prepare for the unexpected
Nobody likes to think about suffering illness or accidents, but by taking out cover you can be more prepared if the unexpected happens. Even if you are eligible for Statutory Sick Pay (SSP), the current rate is only £92.05 per week, and ends after 28 weeks.5 Income protection can be paid alongside SSP and help to top up the shortfall in your household income.
The issue is even more prevalent for the growing number of self-employed people in the UK, which rose dramatically from 3.3 million in 2001 to 4.8 million in 2017.6 Without the backup of SSP, this arm of independent workers risk being left with no income if they are unable to work due to long-term illness or injury.
2. Long-term benefits
Income Protection Plus cover can start from the first day you are incapacitated, and continues to pay you an income until you recover or reach the age of 65, whichever comes sooner. Unlike short-term or ‘lump sum’ critical illness policies, it is deemed a long-term policy – you can claim as many times as you need, each time you are left unable to work. And there are no penalties for claiming – your premiums will not go up if you make a claim.
3. Match your policy to your needs
The policy is flexible and you can choose the amount of regular income you want to receive in the event of illness or injury. You can also choose when you start receiving payments, for example, if your employer provides sick pay for the first 12 weeks you are off work, you can choose for your policy to start paying you once sick pay from your employer has ended.
PG Mutual’s speedy online Quick Quote means you can tailor your plan to suit you – select what you can afford to pay, or the level of monthly benefit you require. Some will cover their monthly rental, others may include a sum for living expenses too – the choice is yours, up to 70% of your normal monthly income. Plus, there’s no waiting period – cover starts as soon as the first premium contribution is paid and continues until you are able to return to work or reach age 65.
You can also review your plan at any time to ensure you have the right amount of cover to suit your personal circumstances.
4. Added benefits from PG Mutual
As an added bonus, PG Mutual returns its profits to its members meaning the plan builds up an investment for your future, whether you claim on the plan or not! Any profits are returned to members and held in an individual’s ‘Profit Share Account’ and builds up every year, in a similar manner to an investment account.
Income Protection Plus offers a full range of member benefits too, including discounts, cashbacks and offers from leading brands such as Currys PC World, Energylinx, Marks & Spencer, EE and much more.
Want to know more? Discover Income Protection Plus, offered in partnership with PG Mutual, here.