Life insurance cover gap revealed for UK renters (1)

Life insurance cover gap revealed for UK renters (1)

12 June 2019

Renters are more likely to worry than take out life insurance or critical illness cover to alleviate financial stresses(2)

A new study from Sainsbury’s Bank(2) reveals that renters are significantly less likely to have life insurance or critical illness cover, with just 26% of renters taking out a policy in comparison to 41% of homeowners.

In the past 10 years, the number of households renting privately with children has risen by almost 800,000 to nearly 1.6 million(3). Renters are being urged to consider what their partner or family would do if they unexpectedly needed to cover housing costs such as rent and factoring contributions and other monthly out goings if the unthinkable was to happen.

Sainsbury’s Bank Life Insurance Calculator: Example based on a rental term of 25 years

Based on the average monthly household expenditure in the UK (£572.60) the calculator suggests that the average UK family which rents, should allocate £687,000 worth of life cover (25 years) as a financial safety net(1).

Before buying a life policy it's important to consider all current living expenses, significant outgoings, any cover already in place and financial help your family or partner may need in the future.  The Sainsbury’s Bank Life Insurance Calculator can help you work this out (1).

Despite being less likely to have life insurance or critical illness cover, 54% of renters  are more concerned than homeowners (48%) about the financial implications should they pass away before old age. Also 21% of renters living in private accommodation worry about this situation on a weekly basis compared to 16% of homeowners. 

The survey found the top reason renters do not have life insurance is they believe they don’t have enough equity or money to have a life insurance policy (29%), in comparison to homeowners (11%).

Top reasons renters don’t have life insurance (2)

Main reasons renters don’t have life insurance % of UK adults
I don’t have enough equity/ money to need to have life insurance 29%
I haven’t got around to it yet 18%
I have no one who needs money in the event of me becoming ill or dying 14%
I’m too young to have life insurance 13%
There are no serious hereditary illnesses in my family 9%

Important life events are the top reasons people decide to financially protect themselves. Buying a house is the main reason people chose to purchase life insurance (34%), followed by other memorable life stages, such as having a child (17%) and getting married (12%). Unfortunate experiences, such as becoming ill (9%) also prompt people to take out a policy.

Karen Hogg, Head of Insurance at Sainsbury’s Bank said: “As more people are raising families in rented accommodation, we need to shift our thinking in terms of life and critical illness cover only being relevant for people with a mortgage. That’s just not the case. All people need to consider what protection their partner and children may need should anything happen to them, including how to cover rent, bills and household essentials.

“Our research found that people are more likely to worry about the financial implications of their passing rather than taking action to alleviate any concerns and protect themselves for the future. Taking out a life insurance policy can help give you peace of mind and ensures you have the financial protection in place.”

Sainsbury’s Bank Life Insurance, provided by Legal and General, (4) offers a range of protection including Life Insurance and Critical Illness Cover. New life insurance customers are offered double Nectar points(5) on Sainsbury’s shopping and fuel, when buying a new Life Insurance policy either with or without Critical Illness cover.

Sainsbury’s Bank offers five top tips on life insurance 
1. Ignore common misconceptions: 
A common assumption is that you have to be a certain age before you get life insurance. This is the reason preventing nearly one in 10 (8%)(2) from taking out life insurance, but anyone with financial responsibilities should consider life insurance regardless of age. 
2. Renters must prepare: One in five (21%) renters worry every week (2) about the financial implications of their passing. Instead of letting stress set in, it’s important to turn that worry into action, something as simple as looking into a life insurance policy can offer relief from financial concerns. 
3. Look at lifestyle choices:
Small changes that can make improvements to your health and wellness, such as quitting smoking, may also result in cheaper life insurance premiums(6).
4. Choose the right cover: 
It’s important to know the difference between life insurance and critical illness cover. Life insurance provides a lump sum payment upon passing during the policy term that can be left to loved ones. Critical illness cover can provide a cash sum if you are diagnosed with or undergo a medical procedure for a specified critical illness during the policy term, to help financially during your recovery. Both can help ensure that your family’s financial prosperity will be protected in a time of need. 
5. Check your calculations:
Before buying a life insurance policy, calculate how much cover you will need. In just four easy steps, Sainsbury’s Bank Life Insurance provides a helpful Life Insurance calculator(1) which can  help you discover the amount of life cover you need and calculate how much your monthly premiums could be.


ENDS


For further information, please contact:
Sainsbury’s Bank press office 0131 286 0010 / [email protected] 

Notes to editor:

This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.
 (1) Sainsbury’s Bank Life Insurance Calculator: The sum calculated is for illustrative purposes only. The average weekly household expenditure, including rent, in the UK is £572.60 (ONS), which equates to family monthly living costs of £2,290.40. Using Sainsbury’s Bank Life Insurance Calculator with a policy term of 25 years = £687,000 life cover. 
This is based on the information you have provided and should not be taken as recommendation or advice. If you are in any doubt please speak to your adviser.  The actual level of life cover you need will depend on your individual circumstances and will be subject to underwriting. Sainsbury's Life Insurance is provided by Legal & General.

 (2) Sainsbury’s Bank commissioned Opinium Research to survey 2,004 nationally representative UK adults aged 18+ between 15 and 18 March 2019. Opinium Research is a member of the British Polling Council and abides by its rules.

(3) Ministry of Housing, Communities & Local Government: English Housing Survey, 2017/18 

(4)  Sainsbury’s Bank Life Insurance is a straightforward way to give your family a financial safety net if you die during your policy term. As long as you don’t make any changes to your policy, your amount of cover and premiums will stay fixed. So you and your family know exactly how much they’ll be left with if they need to claim.

This cover is provided by Legal & General and can be used to help protect your loved ones financially. 
Critical Illness Cover can be added for an extra cost when taking out Life Insurance or Decreasing Life Insurance. This cover can help protect you in the event that you are diagnosed with, or undergo a medical procedure for one of Legal & General's specified critical illnesses during the length of your policy and you survive for 14 days from diagnosis.
These policies are not savings or investment products and have no cash value unless a valid claim is made.
(5) Double Nectar Points. 1) Offer available to customers buying a new Life Insurance, Decreasing Life Insurance (with or without Critical Illness) or Over 50s Life Insurance policy. 2) You need to tell us your Nectar card number when you apply, and use this card with each Sainsbury’s purchase. 3) Double points begin on your policy’s cover start date. If you tell us your Nectar card number after your cover start date, double points begin on the date you tell us. 4) Double points stop when the policy is cancelled or you stop paying premiums. 

5) Each Nectar account can only collect points from one life insurance policy. 

6) It’s only the base points you collect at Sainsbury’s that are doubled. Bonus points won’t be doubled, nor will any points from Argos, Habitat, Sainsbury’s Bank (including travel money purchases), Sainsbury’s Energy or any other Sainsbury’s service.

7) By the 10th of each month, you'll get a bonus point award equal to the total of your qualifying points during the previous month, up to a maximum of 20,000 points. 

8) Sainsbury’s Supermarkets Ltd award the points from this offer. 9) No cash alternative is available. Sainsbury’s Bank reserves the right to alter, cancel or withdraw this offer without notice.

(9) Legal & General, Articles and guides: How would you define cheap life insurance cover.

About Sainsbury’s Bank: 
 
To view our latest press releases and product information, please visit the Sainsbury’s Bank online media centre at https://www.about.sainsburys.co.uk/news 

Sainsbury's was the first major supermarket to open a bank in the UK in February 1997.  Our range of financial products includes mortgages, credit cards, savings and loans, as well as travel money, and car, home, pet, travel and life insurance which we provide online and by telephone.  We offer Sainsbury’s shoppers great deals and rewards for choosing to shop and bank with us.

We have travel money bureaux at various Sainsbury's supermarkets across the UK and a large ATM estate.

Sainsbury's Bank plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury's Bank plc is covered by the Financial Services Compensation Scheme (FSCS).

About Legal & General:

The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions. 
The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. As at 31 December 2017, we had over 9.5 million customers in the UK for our life assurance, pensions, investments and general insurance plans.

Legal & General Assurance Society Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: One Coleman Street, London EC2R 5AA.