According to the Money Advice Service, an estimated one million employees across the UK are troubled by an illness or serious injury every year. Income protection, along with Critical Illness Cover, are products that sensibly respond to this costly misfortune, which is a commonplace risk for our workforce. As a companionable offer to those purchasing life cover, is it time to pull this out of the periphery of protection offerings? And how does it apply to the younger generation of renters on the rise?
Income protection can offer financial relief should life plans become frustrated by illness or injury. It is designed as a long-term relief inasmuch as offering people a routine income in the wake of a troubling illness or injury until they can return to work. Critical Illness, on the other hand, pays out if you are diagnosed with a condition specified within your policy.
Income protection is usually the footnote to a much larger loan offering yet is near-essential in your financial planning precisely because it is such a sensible contingency. This means ensuring that monthly payments can be met and, thus, the standards of your lifestyle are preserved against the uncertainty of the future. Given the sizable loans people take against their assets nowadays, it becomes a matter of protecting a way of life for many.
Recent news items have, however, detected a kind of emerging hesitancy in the wider public about life products and hatching sensible plans to keep life the way it is. It has become another identified “gap”, developing out of the lack of insured renters who rely on their monthly incomes and would otherwise be unprepared if anything should happen to their ability to work.
According to industry experts at COVER, a major worry for private renters is the possibility of an “income shock” caused by illness or injury. There is, however, opportunity and optimism aplenty here. The potential annual worth for this market is £400m, which would answer to a growing need to plan ahead more flexibly. The rental market is a place of progressive, untapped potential. It is just waiting to be noticed.
What are the barriers to protecting rental consumers in private accommodation?
Departing from the tired genre of “homeowners in waiting”, rental consumers are now occupying new spaces to transform how we think about home. This is a generation in bloom; the renting population is renewing optimism in the future of this industry.
What was once speculation is now strengthening into a more accurate portrait of how the industry might progress. Yet, some commentators consider it unusual that income protections are not more casually taken out against high loans, suggesting that injury is still a major risk for our current workforce. If so, the lacking awareness around income protection – or how it could benefit a lifestyle – could quickly become a barrier to those wishing to secure their routine income against uncertainty.
An AIG report has created some dispute over what has been deemed, “illness denial”. It details the lack of financial preparedness in consumers in the eventuality of a major illness. Interestingly, barriers to a fully-protected population of renters tend to have less to do with cost than an issue with the basic perception of how income protection can secure their lifestyle.
Perhaps, then, the trick is in challenging the various, competing ways private renters are thinking about their lifestyles and assessing what matters most. Income protection as a contingency, or a sort of precautionary thinking, can set up for a kinder future through sensible plans.
Critics at large look to the future of the industry through an optimistic looking-glass. Hope, it would seem, is out there.
- illness denial
a trend, observed by AIG, whereby millions are supposedly living in denial about the ways illness can impact their lifestyle.
- income protection
a type of bespoke policy that covers someone’s income in the event of injury or illness.