Income protection financially covers you in the event you're unable to work for health reasons. Most claim on their income protection policy for things like long-term back pain, serious injuries caused by accident, and depression, but also for other illnesses like cancer, heart attacks and strokes.
Income protection offers a longer-term solution than something like sick pay – and also prevents you from needing to use your savings, take on debt, or significantly change your lifestyle. Crucially, if you’re a renter, income protection is a way of safeguarding the roof over your head in case you lose your income through illness or injury.
Do I need income protection as a renter?
As a renter, your rent payments are usually a significant chunk of your regular monthly outgoings. If you were to lose your income for health reasons, you might end up struggling to pay the rent. This is where income protection can help, making sure you’ve always got money coming in, even if you can’t work.
It makes sure you always have enough money coming in to cover the rent and other essentials. This might not be the case if you were relying on sick pay or savings, or someone else. It's definitely something to consider if you think a long-term period of being unable to work could affect your ability to pay the rent.
What’s the risk of not having income protection as a renter?
Renting might be a shorter-term commitment than buying – but it’s still a financial commitment. If you lose your income for health reasons, you might not be able to keep up with the rent, and the home you live in could be at risk. You might also be forced to use up savings or take on debt to cover the rent, which could set you back further down the line.
If you lose your income for health reasons, the significance and immediacy of the consequences depend on your circumstances:
If you’re single, you might not have someone who could support you financially.
If you have a partner, could they cover the rent on their own, or would they struggle without your income?
If you have children, it may feel even more important to protect the roof over your head. You may be able to rely on sick pay and savings for a bit, but, if not, do you have an alternative? Whatever your circumstances, with income protection in place, you can make sure your rent and expenses will always be covered.
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So, what should you remember about income protection?
It's an insurance policy that pays out a monthly amount if you can’t work for medical reasons
If you become too ill or injured to work and lose your income, you might struggle to keep up with your monthly rent payments
Income protection is a way of making sure you could always pay your rent (and other essential expenses) even if you can’t work for medical reasons
For renters, income protection provides peace of mind that losing your income for health reason would not put the roof over your head at risk