While some mortgages are reaching wince-inducing heights, renting is looking like an easier option for some people. And as a result, we might start seeing people putting down roots as tenants for longer than usual. So, what happens to your life insurance if you’re a renter? And do you still need it if you don’t own your home outright?

What happens to my tenancy if I die?

If the worst should happen, it’s important to know that your death won’t automatically end your tenancy. If you’ve left a will and have an executor, you should pass your tenancy on to somebody else who will need to maintain the property and keep paying rent.

If you die without a will, or with a will but have no executor, your tenancy will be temporarily transferred to the Public Trustee. In this case, the landlord will need to complete an NL1 application to get the property back.

Do I need life insurance if I’m renting?

The long and short of it is that life insurance protects you and your loved ones the same way, whether you’re renting your home, or you own it. But the things you might need to consider if you’re thinking about taking out life insurance as a tenant might be a tad different. 

If you were to pass away while renting, one thing to think about might be whether any family you’d leave behind would be able to keep up with the rent. Or, if they could manage the rent, would they still be able to save for the things they’d like to save for while renting without your support? Maybe you were planning to save for a deposit to buy a home or putting away funds to make sure your children have something for when you’re gone.

What type of life insurance do renters need?

There’re a few types of life insurance, but none that are specific to tenants. What’s right for you will depend more on what you think matches up with your personal needs, rather than whether you rent or not. But, because of some of the reasons we’ve mentioned above, there’s a small handful of types that might suit renters more. 

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Level term life insurance

Level term just means that you choose the cover amount and the length of time you’d like it for, and then pay the same monthly cost for the duration of the policy. This works quite well for renters, because you’ll be able to manage the cost of your policy alongside any other regular payments, like rent and bills.

We offer both level cover and decreasing cover. You can read more about term life insurance here.

Over 50 insurance (Whole of life cover)

Whole of life cover (or Over 50 insurance) isn’t just for people who own their home. It’ll protect you for as long as you live and will ensure that anyone you leave behind gets access to a lump sum you’ve decided on.

Critical illness cover and income protection insurance

Sometimes, we worry what might happen if we fall ill, or get injured, and can’t work. It’s a less than ideal situation, especially if you’re a tenant with rent due each month. There are two options here.

Income protection insurance acts as a safety net and will cover a portion of your loss in earnings. It will pay out a guaranteed income if you're unable to work due to illness or injury. That way, you may be able to keep your monthly outgoings in check. 

Critical illness cover will give you a lump sum if you’re diagnosed with an illness that’s outlined in the policy’s terms and conditions. 

Looking for life insurance?

Visit our Life Insurance page to see full details of the cover we offer.

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