Is Life Insurance Important if You Are Self-Employed?

Self-employment provides a lot of independence and flexibility. However, there is a disadvantage to being your own boss: you will have no financial security unless you establish your own arrangements. But, if you’re self-employed, do you really need life insurance? Marcan Insurance can clarify this essential topic.

What exactly is life insurance? 

If you die while covered by a life insurance policy, the policy will pay you a predetermined lump amount. You pay monthly premiums to obtain this financial protection, which ensures that your loved ones will be able to fund their continuous living expenses – from household bills to rent or mortgage payments – if you die. 

Do I need life insurance if I work for myself? 

It all depends on your situation. Regardless of your employment situation, the most critical factor to consider is if you have any financial dependents who would suffer financially if you died. As bleak as it may appear, your death might create a financial void for your loved ones if you do not plan ahead of time. 

A life insurance cash payout might assist your partner, children, or other designated dependents with continuous living expenditures, such as mortgage or rent payments, as well as other day-to-day expenses. If you have dependents, whether you’re a freelancer or a full-time employee, life insurance is something you should think about. 

Why is life insurance important for self-employed people? 

Life insurance is especially crucial for self-employed persons since you will not have the same financial safeguards as a full-time employee. If you’re a permanent employee, you may be eligible for a death-in-service benefit, which some businesses offer. If you die while working for the firm, your family will get a multiple of your yearly pay under this benefit. 

You will not have this if you are self-employed. However, if you have dependents who would struggle to pay bills or other day-to-day expenditures if you died, life insurance might provide you piece of mind that they would be able to cope financially if you died. So, whether you work as a freelancer, consultant, or contractor, you should consider purchasing a life insurance policy to provide financial security for your loved ones. 

Other insurance to consider if you work by yourself 

If you are self-employed you probably don’t have death-in-service benefits nor paid holidays, sick pay, and time off for emergencies. So, if you’re self-employed, you should investigate different forms of insurance other than life insurance to ensure you’re protected in any situation. 

Insurance against loss of income 

Purchasing income protection ensures that you are protected if you are unable to work due to a medical condition. If you can’t work due to your physical or mental health, you’ll receive a monthly payout in return for paying monthly premiums. As a self-employed worker, income protection insurance can assist in covering you and your family’s necessary living needs during difficult times. 

Coverage for critical illnesses 

When you get critical illness insurance, you are protected in the event that you are diagnosed with a severe sickness or condition. If you are diagnosed with one of the illnesses or disorders covered in your insurance, you will be paid a lump payment. You may get critical illness insurance as a separate policy or as an add-on to your life insurance coverage.