Despite many misconceptions, life insurance can deliver many benefits to renters in the UK, and not just homeowners. This is especially true if an individual has dependents who rely on them financially and would otherwise be unable to cope if they were not around.
Life insurance for renters can financially safeguard any loved ones and enable them to continue paying the rent each month if an individual has passed away.
What is life insurance?
Life insurance is, in essence, assurance that your loved ones can be financially secure in the event of you passing away or being diagnosed with a terminal illness. Often, people only consider life insurance after taking out a mortgage, which is where the misconception about life insurance not being beneficial to renters perhaps comes from, which is absolutely not the case.
Put simply, a life insurance pay-out can be used to either pay the remainder of the mortgage in full, or to assist in keeping up with monthly repayments. Yet, as outlined below, a life insurance policy can also benefit renters and provide financial security in the event of unexpected tragedy.
Do I need life insurance as a renter?
Whilst many people take out life insurance when securing a mortgage, as we have seen, it can also be beneficial for renters. As aforementioned, regardless of whether an individual is a homeowner or tenant, policies such as group life insurance can be beneficial and could support family members with a cash pay-out if an employee passes away during the length of their policy, or is diagnosed with a terminal illness with a life expectancy of less than 12 months.
Due to increasing costs of house prices, many individuals are effectively forced into renting property, with the number of renters currently being at an all-time high. Life can change in the blink of an eye, anything could happen at any moment, and we never know what lies ahead the next day.
Therefore, individuals should ask themselves if something unexpected were to happen to them, would their loved ones be able to afford food, clothing, rent, and other associated living costs, regardless of whether they are a homeowner or tenant?
If the answer to this question is “No”, then investing in a life insurance policy will of course seem like a worthwhile endeavour, and a pragmatic solution to tackling the unpredictability of life, regardless if an individual is a homeowner or not.
Beneficial for renters and homeowners alike
Indeed, whilst life insurance is important when it comes to large debts such as a mortgage, not everyone is a homeowner, and a life insurance policy is a wise investment, even if an individual is renting whilst being employed (and especially so if they have multiple dependents or family members who depend on them financially).
Therefore, not having a life insurance policy (even if you don’t have a mortgage) could potentially put any loved ones in a perilous financial position upon your death. With renting becoming more and more commonplace, the distinction between homeowner and renter is perhaps irrelevant when it comes to life insurance, and investing in a policy that works for you and your dependents or loved ones is a sensible way to ensure their future is in safe hands.