Although in its early stages, the project, ‘Generation Rent’ is aimed at protecting the homes of renters, which LV= has noted hold far less protection securing their homes than mortgage holders.
LV= research on the market for renters and protection policies unearthed that only 3% of renters have income protection, 4% critical illness and only 18% hold life cover.
These figures hold true for a mixture of single people, couples and families, as couples and families make up 60% of LV=’s sample.
Iain Clark, managing director for protection at LV=, said; “We see the rental market growing, and statistically those people renting rarely get access to financial advisers.
“Renters just sign a rental agreement and get on with it for six to 24 months. From our point of view we need to make people aware that really this situation is pretty much like having a mortgage.
“They are still paying hundreds or even thousands a month in order to keep a roof over their heads and if something happens to them they are at risk of losing their home.”
In order to target this sector the provider noted that some estate agents are linked to mortgage and protection networks, while LV= is also considering setting up a “school of understanding” with the Association of Residential Letting Agents, getting over the message that protecting clients rental payments is a good idea.
“These people really need some kind of exposure to financial services and in this situation the burning product would be some form of simple income protection,” added Clark.
Justin Harper, head of intermediary marketing at LV=, added: “We need to look at all the risks these people face and the biggest is that their income stops, so we are also looking at adding unemployment cover into the mix.”
