Today freelancers represent over a third of American workers and are growing due to the pandemic. However, what makes them unique in the workforce is they are pretty much on their own without necessarily enjoying the benefits employees receive from corporations. Here are some things freelancers need to know about life insurance.
Freelance Means You're on Your Own
Being a freelancer provides plenty of freedom and time to set your own schedule on your terms. It's an adventurous path for independent thinkers and people who operate most productively as their own bosses. At the same time, it means you won't be working for an employer who offers medical or other insurance benefits. Many times, however, this coverage is limited, and workers still have to supplement the coverage somehow.
Prioritizing Insurance Needs
Since freelancers need to come up with their own insurance, they need to prioritize the types of coverage they need to protect themselves and their loved ones. Due to the inconsistent nature of freelance work, as income levels can fluctuate from month to month, it's important for such independent contractors to understand all the options available to them for meeting expenses. That's why life insurance for freelancers is an important consideration, as it covers debt and expenses in case something happens to you that keeps you from earning income.
Life insurance is useful for families in many ways. If the policyholder dies, certain coverage provides funds for the family to pay expenses. The main two types of life insurance are term life and whole life. A term life plan provides coverage for a set time frame, whereas a whole life plan lasts for the life of the policyholder.
Term life is usually the most appropriate plan for freelancers, although the final decision still comes down to individual and family needs. It's simply more affordable and easier to understand. Factors that affect which plan to enroll in include business debts and overall financial condition.
Joining a Professional Union
Another consideration for freelancers is to join a professional union, such as the Freelancers Union or the National Writers Union. These groups lobby for the rights of freelancers and help with contract disputes. The main reason freelancers need to know about life insurance available through unions is that these plans are otherwise difficult for entrepreneurs to find on their own. If you contact a union to inquire about joining, find out if they offer health and dental plans, along with various types of insurance.
The Option of Dependent Coverage
If you are married to a spouse who works for a large corporation, you might want to consider dependent coverage through their employer. Dependent coverage is when someone gets to share coverage with a person based on their relationship. Find out if the plan includes an extra spousal surcharge and the overall cost of the plan. The combination of an employer-sponsored spousal plan and life insurance for freelancers might be sufficient for your needs.
Dependent insurance plans can cover the children of a policyholder up through age 26. This type of insurance at least provides a safety net for your family members who are dependent on you for expenses. The Affordable Care Act (ACA) requires that companies with 50 or more full-time employees offer plans for dependent children or face penalties. The decision is up to parents if they want to include their children in these plans.
Every decision on life insurance comes down to unique personal needs. The reason freelancers need to know about life insurance is that it's a way to take care of family members in the worst-case scenarios, such as your death or illness. To learn more about finding the appropriate policy for your freelance business, contact the experts at
Fuller Insurance in Southern California today.
