The Renters Generation | How are they exposed?
According to a recent Daft Study ,920,000 people are now living in rented accommodation. That is almost 20% of the Irish population!
Irish people are increasingly becoming a society of renters due to the changed social and economic environment. The concept of Rent Protection from both a Life cover & Living Protection benefit perspective is key. We often see home insurance companies market the concept of “Contents Insurance” for renters, yet the logic is rarely applied to Life Assurance.
Men and Women in their late 20’s and 30’s are not engaging with professional financial advice or institutions until a house purchase. House purchases are taking place a decade later than previous generations. Any Protection for your life or income increases in cost and acceptance of underwriting as we gradually get older also.
Protection coverage is suffering due to this change in engagement with the Renters Generation.
Who is now falling into this category?
- Young families, possibly co-habiting but not yet married, which leads to inheritance issues or incorrectly structured Protection
- Single parent families with significant instability if unable to maintain rent payments
- The renting classes, who may not see value in Life Cover, but would suffer with a loss of income to maintain lifestyle and bills such as rent or car loans
- Professional people, who may not be too concerned with Life Assurance on death, would certainly be concerned at a loss of income due to illness or injury or a need for a lump sum of cash to support themselves.
For anyone who is currently renting or has rented recently, they will know that the inability to pay one month or two months rent will lead to drastic consequences (particularly in rent pressure zones). It is much harder for a bank to legally remove a person not paying their mortgage than it is for a landlord with a tenant missing rental payments. Most landlords are not professionals, and will need a monthly rent to be paid to pay that mortgage. Failure of a tenant to pay this puts all in a difficult position.
What is the solution?…the solution is a combination of the below 3 financial products depending on the Renters situation
- Life Assurance(with multiple options within this to suit any profile)
- Income Protection
- Serious Specified Illness Cover
- For the family unit renting, a combination of Life cover or Income Protection or Specified Serious Illness Cover
- For single parent families, the priority must be Income Protection or Specified Illness Cover, followed by Life Cover
- For single professionals the priority must be Income Protection or Specified Illness Cover. As without their income, state benefits are limited
- For any self-employed people that fall into the Renters category, the Social Welfare benefits have improved as of December 2017, must are still quite onerous for claimants. They are capped for individuals@ just over €10,000 per annum.
We are all living longer, which is of course fantastic. However we are increasingly likely to become ill/injured and unable to work during our working lives. Living Protection is crucial for the Renters Generation.
It looks increasingly likely that our society will have more long term renters. If you take out a Mortgage, you are obliged to take out Mortgage Protection (in the event of death the Mortgage is cleared). You will also be encouraged to take out Illness cover and Income Protection.
People must now apply the same principle whilst living as “The Renters Generation”.