Legal & General is fully rolling out its Rental Protection Plan (RPP) for tenants.
Earlier this year, the insurer became the first UK provider to offer this type of insurance, following a pilot with Mortgage Advice Bureau (MAB).
The product is now exclusively available to all Legal & General intermediary partners.
RPP is designed to pay out a monthly benefit, which could be used to help pay the rent, bills or other financial commitments, in the event of a valid claim.
Nearly a quarter of UK households are expected to be in private rental accommodation by 2023 according to Knight Frank.
The plan offers three choices through a single application: Rental Income Protection Benefit, Rental Life Insurance and Rental Life Insurance with Critical Illness Cover.
RPP also includes a suite of additional benefits, such as Legal & General’s Rehabilitation Support, available on Rental Income Protection Benefit, and Nurse Support Services, available on all three offerings. Tenants also have the opportunity in certain circumstances to increase the amount of cover if their rent increases, without answering any new medical questions.
The full roll-out also includes the launch of a new feature for Rental Income Protection Benefit customers. This gives policyholders who no longer rent a property as a result of taking out a mortgage the option to change their policy to an Income Protection Benefit Plan.
Craig Brown, director of Legal & General Intermediary, said: “The rental sector is growing, but unlike those who have taken their first step on the housing ladder, tenants won’t have the natural trigger of a mortgage application to consider the protection that can be so vital should the worst happen.
“At Legal & General, we know that rental payments are every bit as important as mortgage payments in a household’s finances. We are proud to be the first provider in the market to launch a dedicated rental protection product exclusively to intermediaries following positive feedback on our pilot. UK rental prices are expected to increase by 15% over the next five years and nearly a quarter of UK households are expected to be in privately rented accommodation by 2023. These are couples, young professionals and families, thousands of whom are vulnerable to the financial implications of a critical illness diagnosis, long-term sickness or death of a loved one.
“It is therefore vital that financial services companies provide the solutions needed for this underserved market.”
Ben Thompson, deputy CEO, Mortgage Advice Bureau, added: “As part of MAB’s growth plans we are deliberately widening our addressable market. Being able to promote protection to tenants with Legal & General this year has helped us make meaningful inroads into our plans in this regard, specifically engaging with tenants who are aspiring to buy their first homes.
“Strategically this is important for us and Legal & General has been instrumental in helping us to enjoy success in this area. Most importantly, our partner AR firms that have embraced this have helped many tenants to be protected where previously they weren’t.”