The rental protection plan (RPP) was developed in expectation of the private rental sector growing to nearly 25 per cent of UK households and rental prices increasing by 15 per cent over the coming four to five years.
It is designed to pay out a monthly benefit that can be used for rent, bills or other financial commitments.
The product will be offered exclusively through L&G intermediaries, with a single application providing access to three possible plans: rental income protection benefit, rental life insurance and rental life insurance with critical illness cover.
Tenants whose rent increases, may be able to increase their level of cover without answering additional medical questions, depending on eligibility.
L&G is offering access to its rehabilitation support service for rental income protection benefit customers and to nurse support services for customers of any of the three plans.
And there’s an option for clients, who change from renting to taking out a mortgage, to switch the policy to an income protection benefit plan.
MAB, which partnered with L&G on the product pilot this year, said the product would widen its “addressable market,” and said it would help it “make meaningful inroads into [its] plans to engage with tenants who are aspiring to buy their first home”.
Ben Thompson, deputy chief executive at MAB, said: “This is important to us strategically and L&G has been instrumental in helping us. The appointed representative firms that embraced this have helped many tenants to find protection for the first time.”
Craig Brown, director at Legal & General Intermediary, (pictured) said: “Rental payments are every bit as important as mortgage payments to a household’s finances, but tenants don’t have the natural trigger of a mortgage application to consider protection. It’s vital that financial services companies provide protection solutions for this under-served market.”
Paul Bamford, chief operating officer at Andrews Property Group, added: “Renters are often overlooked in the protection market, but should they lose their income it’s the same whether the person has a mortgage or a fixed-term tenancy agreement.”