In an unpredictable world, financial security can often feel like a luxury, especially for renters who may already juggle living expenses, rent payments, and the rising cost of living. But taking time off work due to an illness or an accident can take its toll and have serious financial implications, particularly if there is no safety net in place.
Our Bruised Britain research study found that nearly a third (29%) of adults experienced an accident in the last three years, with the frequency higher among younger people (37% of under-35s). Over half (57%) of workers had to take unplanned time off work, climbing to 71% among under-35s.
Furthermore, one in four (24%) felt pressure to return to work early as they needed the income, and 16% felt pressure to go back earlier than planned as they didn’t want to risk losing their job.
One way for renters to safeguard against the unexpected is by securing short-term income protection insurance. While this type of insurance is often associated with homeowners or those with long-term mortgages, renters can also benefit greatly from having it in place.
Here are five key reasons why renters should consider short-term income protection insurance:
1. Financial resilience against loss of income
While renters may not have a mortgage to worry about, they still need to pay the rent. Without an income, keeping up with rent payments, utility bills, and daily living expenses can quickly become a major source of stress.
For many renters, their work situation may be uncertain or temporary. Whether a freelancer, contract worker, or employed in a job that doesn’t provide paid sick leave, they may have fewer options for earning an income when sick or injured. Traditional sick leave policies often don’t apply to contract workers, and if self-employed, they may not have access to any type of financial assistance during downtime.
2. Support for those without savings
While many people are encouraged to save for emergencies, the reality is that not everyone has a significant savings buffer. Our Bruised Britain report found that 21% of those that have had an accident in the last three years dipped into any savings they were fortunate to have (32% of men vs 12% women).
Renters, particularly those in expensive cities or with lower incomes, might struggle to put aside enough money for a rainy day. In these situations, short-term income protection insurance becomes even more valuable, as it provides a reliable income stream when savings run dry.
3. Avoiding rent arrears and eviction
Falling behind on rent payments is a genuine concern for many renters, especially if their income is interrupted. Rent arrears can quickly accumulate, leading to serious consequences, including eviction or damage to credit ratings. By receiving a regular payout during periods of illness or injury, they can continue to make rent payments on time helping to preserve landlord relationships, maintain a good credit history, and avoid the potentially catastrophic effects of eviction. And that deposit for a house may soon be gone.
4. Affordable coverage options
Short-term income protection insurance and accident-only policies are typically much more affordable than long-term income protection policies. Renters often don’t need extensive coverage for decades or until retirement age, making short-term plans a practical and budget-friendly option.
5. A better alternative to credit
In times of financial difficulty, many people turn to credit cards or loans to cover their expenses. However, accumulating debt can make an already stressful situation even worse, especially if they’re unable to repay it quickly. Short-term income protection helps avoid this situation by offering an alternative financial support system. Instead of relying on credit, renters will have the funds necessary to maintain their financial commitments without taking on high-interest debt.
Renters may not have a mortgage to worry about, but they do face the same risks of financial instability due to illness or injury, and in many cases can be in a more vulnerable position. Short-term income protection insurance can provide crucial financial support during these times, ensuring that rent and other living expenses remain manageable.
Whether self-employed, a freelancer, or with limited savings, this type of coverage can give the peace of mind and financial security needed to focus on recovery, without the added stress of falling behind on rent. For renters seeking greater financial stability, short-term income protection insurance is an affordable investment in both their future and well-being.
