Life Insurance if Renting in 2024

Cosy one-bed in heart of city centre. Suits one person, ideally.

€3000 a month.

A more accurate description is Shoebox, 20 minutes outside of town.

Literally isn’t big enough for two people.

No smokers. No craic. No hope.

Right now, renters already face an uphill battle – especially if they’re in Dublin or any of the surrounding commuter cities (which, by the way, currently stretches all the way to include Wexford and Cavan).

Pokey box rooms.

Mouldy bathrooms.

Tiny flats or a shed at the back of someone’s house with no electricity or Wi-Fi.

We’ve all seen the news. It’s grim for a lot of people.  That’s not to say there aren’t any lovely rentals; of course, there are. It’d just be remiss of me to write an article about renting and not be honest about it.

According to the Central Statistics Office’s Census of Population 2022, 513,704 rental properties were occupied in Ireland, a 9% increase from 469,671 in 2016.

This is why I’m frequently asked:

Do you need Life Insurance if you’re renting?

I got this very question in an email from a woman called Lucy, who wrote in (shur aren’t I the Joe Duffy of insurance brokers) with the following:

Hi Nick. I was out with my friends over the weekend. My partner and I are renting as we’re saving to buy, as are most of my friends. One of the girls said she had Life Insurance. We told her she was mad and wasting money…but she made some good points. So, is Life Insurance for renters common? Any pointers would be great… Thank you!

That’s the exact question we’re going to be answering now.

Do you need Life Insurance if renting?

As with many things in insurance (and life), it depends on your situation.

You may or may not have heard about Mortgage Protection. That type of Life Insurance covers your mortgage: so if you die before you’ve paid your mortgage off, your bank/mortgage provider gets a payment to clear it off. Whoever you leave behind gets to keep the house, but there’s no other money left for them.

You don’t need mortgage protection as a renter – but the logic is pretty sound. For most people, the biggest outgoing is their rent, associated bills, and whatnot.

We all know the drill: get paid and watch all your money immediately disappear again.

The hamster wheel keeps turning.

Forever. Until you die.

The joys of capitalism.

You’re probably thinking, ‘Hmmm, what would happen if I died or got sick? Who would cover my rent? Would I lose my place?’

And that, my friend, is why some insurance makes a lot of sense so let’s look at some examples:

What types of Life Insurance do single tenants need?

If you’re a person who is very familiar with Tinder, Bumble, Hinge and whatever apps are out there – which is to say: single, or very, very bold – and it’s just you and maybe a potted plant or pet or two, you don’t need Life Insurance.

I won’t take the mickey and tell you otherwise to make a fast buck.

It’s tough enough already for renters without that worry.

However, I am going to ask you to consider your plants or pet—or even yourself.

What happens if you get sick and can’t work?

Would you be able to make your rent?

If yes, click out of this blog and email me your line of work so I can consider a career switch.

If it’s a no, then think about Serious Illness Cover (SIC) or even better Income Protection.

They both got your back but in different ways.

With SIC, you receive a tax-free lump sum if you get one of the illnesses covered by your policy. 

Income Protection, on the other hand, pays out if you can’t work because of ANY illness. It’s the best type of insurance you can buy.

You can read more about choosing between Serious Illness Cover or Income Protection over here.

We recommend Income Protection if you’re single, renting, and have no financial dependents.

Do families who rent need Life Insurance?

If you have chosen to spawn small versions of yourself in pursuit of love, glory or just to live vicariously through them, then this one is for you.

No doubt, you’d probably like to get a mortgage at some point, but it’s very fecking expensive, and we’re living in a delightful housing crisis right now.

If you’re a parent, it’s downright irresponsible not to have some kind of cover.

I have three kids and am insured up to my eyeballs because I run this insurance outfit. The thought of what might happen if I didn’t have cover and popped my clogs or couldn’t work is enough to wake me up in a cold sweat, which is why I bit the bullet and am spending some of my hard-earned spondoolies this way.

Would I rather spend my insurance premium money on pints or a holiday or who knows what else? Of course I would, but those little feckers at home are more important than a dirty big hangover after a rake of pints.

So if you, like me, are ready to make that move, you’ll need to consider which type of insurance you want.

My big piece of advice is this: don’t blow your money by focusing on just one type of cover.

Instead, be logical about it.

You might think the idea of buying €1m life insurance is gas but you won’t when you see the price.

The reason for life insurance is to replace your future income if you pass away.

Let’s say your half of the rent is €1,000 a month. At a bare minimum, you’ll want that much cover across 10 or 20 years (or until your youngest is 25 and financially independent – yeah right, they’ll sponge off you well into their 30s/40s)

If you’re the breadwinner, you must leave enough to cover your family’s rent for the rest of their lives AND replace your income.

Or you could leave enough for them to buy their own home.

Tis up to you.

Remember our friend Income Protection – get that too.

No income = no rent paid= no roof over your head.

Income Protection pays out while you’re still alive – and it pays you up to 75 percent of your salary until you can go back to work or retire.

Income protection is the glittering diamond in the vast desert of Life Insurance and it could save you from an awful lot of heartache if catastrophe struck.

Losing your income through disability or sickness is a financial catastrophe from which there is no recovery 😨

It is the single biggest risk you and your family face.

You have to guard against that risk before you do anything else.

We recommend enough Life Insurance so your family can live comfortably until your kids are grown up. You should also get Income Protection to cover you if you can’t work for any reason. 

Over to you…

No one likes paying for Life Insurance.

I’m an insurance broker and I certainly don’t.

There are a million other things I’d like to buy instead, but Life Insurance is the one that brings me real peace of mind.

Look, if you have a mortgage and are in arrears, you’re protected by the Code of Conduct on Mortgage Arrears.

You’ll get a grace period where you don’t have to repay.

But after that, the bank will turf you out if you can’t pay the mortgage.

It’s a sobering thought, but many of us are an illness away from homelessness.

If you’re a renter, your cards are already stacked.

Renting is hard.

Losing your home (or your kids’ home) would be even harder.

So yeah, I would say this to my dear Aunt Lucy (yer wan who asked the question above): Life insurance for renters is more common than you think. It might seem like a mad waste of money, but you’d be surprised how it could save the day.

If you need more advice (preferably about insurance!) or have any questions, call me on 05793 20836.

Or, you can complete this questionnaire, and I’ll be right back with my recommendation on the types of cover you should consider.

Thanks for reading

Nick

Editor’s Note | We published this blog in 2017 and have updated it since