Renting or buying? Income protection fit for the future

Mortgage? Rental? – Let’s keep things simple
Aviva Protection Propositions Manager Julie Higman

We have all seen our lives dramatically impacted in the first half of 2020 due to the Covid-19 pandemic. We have never been more aware of the impact illness can have on our daily lives as over the last few months.

This is likely to be a time where many people pause and reassess what is important to them and their family. Many may also be questioning how financially resilient they are at this uncertain time, whilst others will be having their first experience of looking to claim state benefits to help them stay afloat.
The good news is that there are solutions available to help families protect their financial resilience. Let’s put income protection at the top of the list.

In times like these, whether customers are renting or have bought their home using a mortgage, keeping a roof over their heads is likely to be a top priority. At Aviva we’ve developed our income protection products to be suitable for our customers over the long term, with the flexibility to adapt to key life changes.

Fit for the future
Flexibility and portability are key customer benefits of our three income protection products. Aviva have improved the built-in flexibility of our income protection Life Change Benefit options (Aviva’s answer to GIOs) to ensure that both tenants and those with mortgages can increase their benefit if their monthly rent or mortgage payments increase.

From 28 June, customers with full term Income Protection+, 2-year benefit Income Protection+ and Living Costs Protection can easily increase their cover, if they’re on standard terms, without the need for further underwriting, if:
• There is an increase in rental payments imposed by the landlord, or
• There is an increase in rental payments due to a move to another rented property, or
• There is a move from rented to mortgaged accommodation.

We understand that it can be a challenge to explain income protection to customers and that not everyone can afford the ‘Rolls Royce’ option. But, with Aviva’s range of income protection products customers can choose the type of cover that best suits their needs and budget.

The tenant protection opportunity
With 8.6m rental households in the UK1 and only 2% of renters having any income protection in place2, the Protecting generation rent’ report published by Hymans Robertson in September 2019 states that renters are keen to engage with someone regarding how they can cover their rent if they are ill. This tenant protection market offers a huge opportunity but reaching customers in the rental sector could be a challenge to you as an adviser.

Support for advisers
Aviva have a full range of marketing support materials available on their Tenant Protection hub for advisers. With tips on how to identify and engage with prospective tenant customers, plus a customer video and sales aids to reinforce the value of putting protection in place, we’re providing the support advisers need to tap into the tenant protection opportunity.

1English Housing Survey 2018-19 Headline Report, ONS (Contains public sector information licensed under the Open Government Licence v3) 2FCA Financial Lives Survey 2017 Updated Jan 2020.

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