Things Freelancers Should Know about Getting a Life Insurance Policy

Life Insurance Plan

More and more people are choosing freelancing as a career, especially in the wake of the pandemic that left many people jobless. A 2014 study by Upwork, a freelance platform, revealed that one in three Americans had undertaken a freelance project over the past year. This number has only grown since then.

There are many reasons why people are becoming freelancers. They include the freedom to choose their working hours, a better work-life balance, and a chance to work from anywhere. Unfortunately, while it has many advantages, it also has some disadvantages. For instance, unlike salaried employees, freelancers are responsible for managing their benefits, including life insurance.

If you’re a freelancer planning to purchase a life insurance policy, this article is for you. Here, we will cover important things you should know as a freelancer about life insurance coverage.

Life Insurance Policies Are Affordable

To many people, life insurance policies are expensive and unaffordable. However, this thinking is incorrect, especially since most policies are flexible. Besides, since you are your own boss, you have a degree of control over your policy’s cost and the kind of policy you choose.

Term Life Insurance Is Cheaper

Primarily, there are two kinds of life insurance policies: permanent life insurance policy and term life insurance policy. Permanent life insurance is, as the name implies, an insurance policy that lasts your whole lifetime. Term life insurance, on the other hand, only applies to a set period. Most people pay for between 10 and 30 years.

As a freelancer with no set income, you might find a term life insurance policy more suitable. The primary reason for this is that it’s cheaper when compared with permanent life insurance. And if you’re wondering whether it offers sufficient protection, then yes, it does provide adequate coverage to your dependents.

Compare Quotes Across Insurance Companies

This tip applies whether you’re purchasing a life insurance policy or an auto insurance policy. Comparing quotes across insurance companies and even comparing different insurance plans from the same company will help you identify the one that covers your needs the most and at the right price. Fortunately, you do not have to compare insurance policies manually. There are numerous tools online for comparing insurance quotes.

Select Your Policy Yourself

Somebody whose employer covers life insurance cannot dictate what the policy covers. In fact, it is not uncommon for such policies to provide incomplete cover for worker’s families. Moreover, you would lose your policy if you decide to leave the job.

However, in case you are self-employed, you will have full control over your policy. For example, you can determine just how much coverage your policy provides. Additionally, you can change jobs and still be covered. You can update your policy as per your requirement.

Factor in Your Business Debts

End of life expenses, healthcare costs, and personal debts like car loans, student loans, and mortgages are some of the liabilities the average employee must account for when determining how much life insurance they need. In addition to these liabilities, the freelancer must also account for his business debts. If your life insurance policy doesn’t cater to them, it can affect your property’s value and thereby adversely impact your family’s inheritance.

Everybody needs a life insurance policy, whether they’re a salaried worker or a freelancer. It is a viable contingency plan that ensures your family’s needs are catered to in the case of your sudden demise.

If you want to purchase a life insurance policy but don’t know how to go about it, we can help you at American Premier Insurance. Contact us today for a consultation.