Legal & General is introducing a Rental Protection Plan for tenants, thought to be one of the first examples of this kind of insurance in the UK.
The company says the thinking behind the new product is the rapid growth of the private rental sector overall, which it says may account for a quarter of UK households as soon as 2023.
The plan offers three choices: Rental Income Protection Benefit, Rental Life Insurance and Rental Life Insurance with Critical Illness Cover.
If a tenant moves away from the private rental sector, the product can be switched to an Income Protection Benefit Plan.
“The rental sector is growing, but unlike those who have taken their first step on the housing ladder, tenants won’t have the natural trigger of a mortgage application to consider the protection that can be so vital should the worst happen” explains Craig Brown, director of Legal & General Intermediary.
“UK rental prices are expected to increase by 15 per cent over the next five years and nearly a quarter of UK households are expected to be in privately rented accommodation by 2023. These are couples, young professionals and families, thousands of whom are vulnerable to the financial implications of a critical illness diagnosis, long-term sickness or death of a loved one” he adds.
“It is therefore vital that financial services companies provide the solutions needed for this underserved market.”