Rent falls due whether you are well or not
If you fall behind on rent, a landlord can start the process to end your tenancy sooner than a mortgage lender would usually act. Moving out in the middle of an illness, finding a deposit and passing new referencing checks without an income would be hard.
Renters also have no home equity to borrow against. Your income is the thing that keeps the roof over your head, which is why protecting it matters.
Renters often move more than homeowners, and a new tenancy usually means proving your income. If you are unwell and on reduced pay, passing referencing can be difficult. Keeping your income steady keeps your options open.
Working out how much you need each month
Start with rent, then add council tax, energy, broadband, phone, food, travel and any loan repayments. That is your must-pay figure. Insurers cap benefit at a share of your earnings, so the maximum may sit a little below your take-home pay.
If you share a flat, think about your own share of the rent and bills. If your partner pays half, size the policy to your half.
Some renters also pay for a car they need for work. If you would keep the car during an illness, include the finance payment in your figure.
- Your share of the rent
- Council tax, energy and water
- Food and travel
- Phone, broadband and subscriptions you would keep
- Loan or credit card repayments
Picking a deferred period that fits your savings
Count how many months of rent and bills your savings would cover, then add any sick pay. If you could manage for three months, a three-month deferred period might suit. If you have no savings and little sick pay, a shorter one may be safer, though it costs more.
Remember that insurers pay benefit monthly in arrears, so the first payment arrives a month after the deferred period ends.
If your job comes with generous sick pay, match the deferred period to when that pay ends. If you are self-employed or on statutory sick pay only, you may want benefit to start sooner.
Thinking ahead to buying a home
Many renters plan to buy in a few years. An income protection policy bought now carries on when you move, so you do not need to start again. You may want to increase the benefit later if your mortgage costs more than your rent.
If you share a tenancy with a partner, life insurance can also help them keep paying the rent if you died. Our renters' life insurance page explains how.
Life cover for a renter can be modest, since it does not need to clear a large debt. A modest sum can cover a few months of rent and the funeral.
How Hi Tomorrow helps renters
We look at your rent, bills, job and savings, then suggest a monthly benefit and deferred period that keep the tenancy safe without costing more than you need. We compare policies from our panel and explain how each defines being unable to work.
If your work has a higher risk of injury, we will point you to insurers who take a fair view of your job.