When it comes to life insurance, homeowners often come to mind as the primary candidates for cover. However, renters are an increasingly large segment of the population and should also consider its importance.
Over half a million people currently rent in Ireland, according to the latest census. And due to the ever-increasing cost of home ownership, this number has grown steadily over the past few decades.
The average age of transition from renter to homeowner (when over half an age group own their home in some capacity) is currently 36. In 2006, the average age was just 26.
This means that the average renter is getting older and is less likely to resemble the traditional stereotype of a student or a carefree twenty-something. Many renters are now married or in long-term relationships and have children and this means the responsibilites of the average renter are also increasing.
However many are leaving themselves financially exposed by not taking out adequate insurance cover like life insurance and income protection.
Do renters need life insurance?
In short, yes.
Life insurance or simply life cover pays out a tax-free lump sum if you die during the term of the policy. While it may seem unnecessary if you don't have a mortgage or property to protect, life insurance for renters plays a crucial role in securing financial stability for your loved ones and will help cover debts and other obligations in the event of an unexpected tragedy.
You can choose to just cover yourself, or to get joint or dual cover, where two people such as you and your partner are covered under the one policy.
Life insurance isn't usually expensive, especially if you're younger and in general good health. So the earlier you apply the better. And it’s especially important if you have dependants who rely on you and who would struggle financially in the event of your death. But despite an increasing number of renters being in this situation, life insurance policies are still generally seen as the preserve of homeowners, who often take out life insurance when they’re applying for mortgage protection, which is a requirement for getting a mortgage in Ireland.
The average age of someone searching for life insurance on bonkers.ie is just over 43 - well above the age at which renters become the minority. Less than 20% of searches were done by those under 36. Using our own website as a proxy, this suggests that the interest in life insurance is low among the age demographic most likely to be renting.
Renting is generally more precarious than owning your own home and this is exacerbated by many tenants not having life cover in place. Should an accident or illness occur, many renters, and their dependants, will be left potentially unable to meet their rent payments. And as rent in many areas is now more expensive than a mortgage, renters are even more vulnerable than homeowners should something happen.
Income protection
Differing from life insurance, income protection pays you a monthly income in the event you're unable to work due to accident, injury or illness. You can choose the amount to cover but it's usually between 50% and 75% of your normal income.
The cover pays out until you are fit to return to work and it can provide a certainty that rent can continue to be paid should you become too sick or injured to work.
The money can be used to pay for anything from energy bills to the weekly shop.
Like life insurance, the younger you get income protection, the cheaper it generally will be. Additionally, the price of income protection factors in the risk associated with your job - the more dangerous the job is perceived the costlier the premium.
The application process is generally quick and easy. And it's also possible to have both a life policy and an income protection policy, for maximum coverage.
In all, income protection is a great way to reduce the insecurity of renting your home, ensuring you'll be able to meet rental obligations and other outgoings in the unfortunate event of sickness or injury.
Financial security
Getting some form of life insurance can help provide financial security to the ever growing number of renters in Ireland.
As more of us continue to rent into our thirties and beyond, the importance of a financial safety blanket to protect ourselves and our dependants increases.
Therefore, obtaining some form of life insurance is an affordable way to guarantee financial security in the long run.
Get life insurance on bonkers.ie
Whether you're looking to get life insurance or income protection, bonkers.ie has you covered.
Head to our life insurance page and income protection page to begin reviewing the best value policies from Ireland's leading insurers.
Once you submit an online inquiry, a member of our experienced Dublin-based team will arrange a call with you and guide you through the application process.
Don’t forget, you can also compare a range of other insurance services, energy tariffs, broadband deals and banking options on bonkers.ie.
