Life insurance for self-employed people: do you need it?

If you are self-employed, you already know the many benefits of this career: the ability to set your own schedule, choose the projects you work on, and exert control over your income. By working in a passionate field, you can often build a business that reflects your values and interests.

That’s pretty tasty, isn’t it?

However, if you are self-employed, you are also familiar with the following risks and challenges: income instability. Lack of benefits that often come with traditional employment (health insurance, paid vacation, retirement savings plan, office, not kitchen). Business expenses, including taxes, marketing and equipment, must be paid by you.

In addition, there is an overload: you are constantly working to bring in new clients and projects to keep your income down. It rattles on.

So, you sign up for life insurance. People with unpredictable incomes may be inclined to think that life insurance is an expense they can do without.

But if you are self-employed and have dependents, you should consider life insurance. Simply put, life insurance is a way to help cover income in the event of death. Your loved ones can use this payment to pay for everything you can’t take care of, from clothes and groceries to rent or a mortgage.

It may seem like an extra expense, but consider taking out life insurance as an investment for your own peace of mind. This is something you shouldn’t miss. Keep reading to see why self-employed life insurance is important.

What is life insurance?

Life insurance provides financial protection to individuals and their families in the event of the death of the insured. Beneficiaries can use the death benefit to pay for anything they choose. Common expenses include funeral expenses, unpaid debts and other financial obligations such as mortgages or tuition.

When an individual takes out life insurance, the insurer pays a regular premium. The amount of premiums depends on factors such as a person’s age, health status, and desired coverage.

When choosing life insurance, it is important to consider several factors. The first step is to determine the amount of coverage required. This will depend on your financial obligations and the amount of debt you may have. Think about how much you can pay there and how long you want your premiums to last.

What types of life insurance are available?

There are two main types of life insurance: life insurance and life insurance. Each type of life insurance has its pros and cons, but term life insurance is often considered the cheapest insurance.

Term life insurance covers you for a specific period (usually 10, 15, 20, 25 or 30 years). During this period, you pay a monthly premium, and it usually stays the same for the entire period. If you die during the period of coverage, the death benefit is usually paid to the beneficiary in a lump sum, tax-free.

If you don’t die during the term of the policy, no death benefit will be paid. (But the upside is that you’re still alive.)

Many experts recommend that you buy insurance coverage that is 5 to 10 times your salary and extend that period until your dependents are no longer dependent. This could mean until the loan is paid off or until your child is expected to graduate from college.

Then, as you get older, that period may expire and your health may deteriorate.This is one of the reasons term life insurance is often cheaper. This usually happens when you are relatively young and healthy.

Other things to consider: when you’re older, you probably won’t have any more dependents. Because your children will move here and become prosperous members of society. You may also have no income instead of earning a living from the money you saved after you retired. This means that you may no longer need life insurance.

Life insurance, including life and death coverage, covers the entire life of the insured as long as the premium is paid. This usually means that premiums are more expensive than life insurance. Because you have insurance, including your unhealthy age.

Again, this may mean buying insurance at a time when you are no longer earning the income needed to support your dependents. Of course, since it depends on the individual, it may make sense to consult with financial

How much does life insurance cost?

For a 35-year-old woman in very good health, Haven Life’s 20-year, $500,000 life insurance would cost $17.50 a month, much cheaper than the cost of streaming TV service, for example.

Below is MassMutual or C.M.This is a sample quote about 20 years of life insurance issued by Life for people with excellent health:

Term Life Insurance Quote.

The estimate is based on the price for eligible applicants for term life with excellent health. The difference in price is based on age, health status, amount of coverage, and length of coverage. This price does not reflect the percentage of applicants in DE, FL, ND, NY and SD.
By comparison, according to a quote from State Farm, a $500,000 permanent life insurance policy for a 35-year-old woman in good health could cost $411 a month. That’s an increase of more than $4,700 per year.

Why does life insurance make sense for self-employed people?

As we mentioned, one of the downsides of being self-employed is that your income can change every month. The good news is that Haven Life insurance is not. The premium stays the same over the selected period, which means that the premium doesn’t change even if your health deteriorates with age. This is the kind of certainty freelancers can rely on.

There’s something else to think about: many traditional employers offer group life insurance as a benefit. It’s not enough for most families, but it’s important. If you are self-employed, you have to do it yourself.

I mentioned earlier that experts often recommend taking out life insurance that is 5-10 times your salary. What do you do when your annual income changes? You can calculate an average of the last five years or consider an income trend line. If you’ve taken higher pay for your job, a) congratulations; and b) take that into account when calculating the amount of life insurance you need.