Life insurance sold to tenants could provide a valuable additional income stream for agents whose revenue has been hit by the fees ban.
Tenant Shop, the utilities management service, says a so-called Protection Gap has opened up as a result of more people renting for longer and therefore missing out on the traditional life insurance trigger when a mortgage is taken out.
“We have listened to the feedback from our agents and they are telling us that this is something renters care about and something that they are looking to introduce to their customers” says Glenn Seddington, Tenant Shop’s managing director.
Inchora, Tenant Shop’s parent company, has insurance products under the branding Cignpost Life, which Seddington says could provide new opportunities for lettings agents.
“Access to additional revenue routes will be a key component in this new landscape that we find ourselves in. Products like income protection, life insurance and critical illness cover will become increasingly valuable to agents as renting becomes a lifestyle choice for many families and older people” he explains.
Cignpost Life provides what he calls a simple online life insurance product with optional critical illness cover to offer tenants: after answering a survey including five yes/no medical history questions, Cignpost Life provides an instant decision with no medical required.
“We’ve been offering this solution for a while, although have only started to promote it recently. Busy tenants’ need for quick and simple life insurance is greater than ever before and this should now be a solution offered by all the best modern letting agents” says Seddington.
He cites research by Sainsbury’s Bank, carried out earlier this year, which has revealed the extent of the insurance problem in the private rental sector.
It found that only 26 per cent of tenants are likely to have a life insurance or critical illness policy, compared to 41 per cent of homeowners.
Yet despite being less likely to have the required cover, 54 per cent of tenants are more concerned than homeowners about the financial implications should they pass away before old age.
Moreover, 21 per cent of renters taking part in the research said they worry about this scenario on a weekly basis, compared to just 16 per cent of homeowners.
