In this revolutionized world where many people are choosing freelance employment because of the flexibility and independence that come with it, which is not a bad idea, it is important to ensure one’s financial future by purchasing insurance products. Life insurance policies are available for freelancers, ranging from whole life and term life to universal life insurance.
In contrast to typical employees who have access to life insurance policies through their employers, freelancers need to take proactive measures to safeguard their financial future and the safety of their loved ones by purchasing their own coverage. In the event of an unplanned disaster, life insurance offers vital financial support, guaranteeing that dependents are taken care of and financial commitments are fulfilled.
This article aims to shed more light on the value of life insurance for freelancers. Also, how to determine life insurance coverage, factors that affect the cost of life insurance policies, and how to get life insurance. Stay close and read to the end so as not to miss out on essential insights.
Should Freelancers Buy Life Insurance?
Whether you are self-employed or working under someone, it is important to understand the value of life insurance. Life insurance does not only protect your family in the event of your passing. It also assists with living expenses and mortgage payments. Compared to traditional employees who enjoy the perks of group life insurance bought by their employer, freelancers are responsible for buying coverage on their own.
You may face significant issues later on in life, such as an inability to pay off a student loan or mortgage; life insurance features debt coverage for policyholders. Also, it ensures that your family is not burdened with finances if an unexpected situation like death occurs. In essence, life insurance guarantees the safety and financial security of your loved ones in the event of an unexpected loss.
Factors That Affect the Cost of Life Insurance
Life insurance companies have their unique underwriting process, where the eligibility of an applicant is determined. There are several factors that affect the cost of life insurance policies, and it varies across different insurance companies. Some of the factors that can affect life insurance cost are as follows:
Your Age
This is one of the major factors that influence how much you will be charged for a life insurance policy. If you apply for life insurance when you are young, you are likely to get lower premiums because it is believed that young people tend to be less risky to cover than older adults. So, the younger you are, the lower the premiums, and vice versa.
Health
The overall health condition of the individual when applying for life insurance will be considered when determining how much he/she will pay for coverage. If you have a critical or chronic health condition before applying for a life insurance policy, you are most likely to pay higher premiums for coverage. This is because most insurance companies consider it riskier to cover a serious health issue compared to those with good health.
Term Length
The length of the life insurance policy you intend to purchase also affects how much you’ll pay for coverage. If you intend to buy a higher term of about 20-30 years, prepare to pay higher premiums for coverage. This is because longer terms often come with higher risk, and the likelihood of the policyholder dying increases.
Coverage Amount
Also, the amount of coverage you choose on your life insurance largely affects how your premiums will be set. If you select a high death benefit to be paid out to your beneficiaries upon your death. You will pay more premiums than those who choose low or average death benefits.
Furthermore, your family’s medical history will be factored in when the insurer is determining how much you’ll pay for coverage. Your premiums will increase if your family has a history of cancer or other health conditions. The type of lifestyle you engage in also contributes largely to the cost of your life insurance. To unlock lower premiums, it is advised not to engage in high-risk activities like skydiving and mountain climbing.
Other Types of Insurance That Freelancers Need
There are various insurance products in the market today, but there are some that are considered most important. If you are a freelancer, highlighted below are some of the key insurance coverages you should consider:
- Health insurance.
- Disability insurance.
- Professional liability insurance.
- Business insurance.
- Cyber liability insurance.
- General liability insurance.
- Commercial property insurance.
These types of insurance offer broad and comprehensive coverage that provides protection against a wide range of risks and perils. It is typically designed for individuals who want to safeguard their financial security and stability. For each of these types of insurance, the underwriting process and coverage options differ significantly. That said, it is important to pay attention to the features of each type of insurance. You can consult an insurance professional for proper guidance.
How to Get Life Insurance for Freelancers
Purchasing a life insurance policy is not as difficult as you think; here‘s a guideline on how to go about it.
- Assess Your Need: The first thing you need to do before purchasing a life insurance policy is assess your needs, as this would help to determine how much coverage you need for yourself and loved ones. Factor in your financial obligations, income, and needs of your dependents when assessing your needs.
- Compare Quotes: Once you have assessed your needs, the next thing is to compare quotes from different insurance companies. This would give you an idea of the average cost of life insurance, and it would also enable you to weigh your options and choose an insurance company that aligns with your needs and budget.
- Apply for Coverage: After choosing an insurance company to work with, apply for coverage. You will be required to complete an application form by providing personal details about yourself, which include age, job, lifestyle, and health status.
- Undergo a Medical Exam: Most life insurance companies require applicants to undergo a medical exam before coverage is approved. Your blood pressure, sugar level, and other vital signs will be checked to determine your premiums.
- Review and Sign Your Policy: Once the application is approved, take your time to review the policy document sent by the insurer and sign it. Understand the terms and conditions of the policy and seek clarification where needed.
Conclusion
Life insurance is a great financial tool for freelancers as it provides financial protection for your loved ones. If you are self-employed and you have people who depend on your income to survive, such as elderly parents, a spouse, or a sibling, looking out for their future by purchasing a life insurance policy is paramount.
