Life Insurance in the Gig Economy
Becoming your own boss and creating a job you’re passionate about are two of the biggest perks to being self-employed. One reason many hesitate to make the jump to self-employment is leaving company benefits behind. One typically offered and missed benefit is group life insurance. But can you get life insurance if you’re self-employed? Life insurance is more affordable than many think and can be purchased while keeping a few things in mind.
Calculate Your Income
In order to know how much life insurance you need, it’s important to calculate what your income is. Take a look back at your financial statements to see what your salary was in the past year and bring this along when you meet with an insurance agent.
Buy 10 Times Your Income
The rule of thumb is to typically purchase about 10 times your income. You may want to consider additional life insurance to cover any outstanding debt like a mortgage or student loans. Although roughly 10 times is the average a person needs, life insurance can be purchased up to 30 times an individual’s income.
Consider Term Life Insurance
For self-employed individuals, Term Life insurance is typically where you can find the best bang for your buck. Term life insurance offers affordable coverage for a specific period and allows you to reassess your life insurance needs over time. You can choose to maintain the policy as it is, convert some or all to a permanent policy, or decide to draw back on your coverage if it is no longer needed.
Life Insurance Isn’t Tax Deductible
Keep in mind that life insurance isn’t tax deductible, although there is one exception. A self-employed life insurance deductible may be applied if your business offers group life insurance as an employee benefit. Keep in mind that for the majority of newly self-employed businesses, this usually doesn’t apply, but it’s something to keep in mind for the future as your business grows.
Get the Protection You Need
Deciding on life insurance while self-employed doesn’t have to be overwhelming. Life insurance is there to protect both your business and your family. Connect with a local agent today to discuss your situation and what coverage option is best for you.