Research by LV found that millions of mortgage holders and private renters are worried about money and feeling stressed and anxious.
However, a large proportion of renters, freelance workers and self-employed people don’t have an income protection product to provide an income if illness or injury leaves them unable to work.
Only 12 per cent of mortgage holders and five per cent of private renters say they have income protection, while 5.7 million or 87 per cent of self-employed people, sole traders and gig workers don’t have income protection.
LV’s says its new income protection product, which is designed to help pay mortgage or rent payments if illness or injury prevents the insured person from working, is “simple and affordable”.
Developed with feedback from financial advisers, LV Mortgage and Rent Cover offers income protection with no minimum hours worked or proof of income required, either when applying or making a claim.
As part of the application process the adviser will need to validate that the cover amount does not exceed the customer’s mortgage or rent payments, and obtain documentary evidence from the customer to support this, such as a copy of their mortgage offer or tenancy agreement.
If the customer is unable to work due to an illness or injury, their rent or mortgage payments will be covered up to £2,000 a month for a maximum of one or two years per claim. The amount of cover can be adjusted by the customer during the lifespan of the policy to account for life events, such as moving house or rent increases.
Debbie Kennedy, protection director at LV, said: “Working patterns have been transformed over the past 20 years and there are millions of freelance workers whose incomes fluctuate. Many would struggle to meet their mortgage or rental payments if illness or injury prevents them from working.
“LV Mortgage and Rent Cover is the first product of its kind, focusing on under-served groups who are more prone to income shocks. It is designed to provide protection and peace of mind for people who worry about paying their mortgage or rent, if illness or injury stops them working.”
She added: “As millions of households opt to rent their homes and working patterns change, it is vital that protection providers adapt and innovate to suit the needs of advisers and their clients.
“We’ve stepped up, started from first principles and thought again about how income protection can best serve policyholders. With LV Mortgage and Rent Cover, we can offer reassurance for consumers seeking to protect their mortgage and rent outgoings.”