Making money from your own hard work. You determine your hours, select your clients, and can work from any location. But that freedom also comes responsibility—especially as it relates to your financial future. And one of the least talked about ones? Life insurance.
People with traditional 9-to-5 jobs usually have insurance through their employer. But what about freelancers, entrepreneurs, remote workers? This guide is for you if you are one of these people.
Why You Should Care about Life Insurance as an Independent Worker
Let’s face it: When you are self-employed, there’s no safety net. No benefits, no employer provided. No paycheck if something happens to you.
So, why is life insurance important?
Protects your loved ones — If you have a spouse, kids, or even business partners depending on your income, life insurance means they won’t be left stranded.
Covering existing debts — Business loans, personal loans, mortgages — none of these disappear if something happens to you.
Gives you financial peace of mind – You’ve put in the effort to establish your career. Insurance protects your legacy.
Provides peace of mind — Having the knowledge that your family or dependents are taken care of is seismic.
Different Kinds of Life Insurance and Which Is Right for You
Term Life Insurance
This is the simplest choice of all. It protects you for a specified period — 10, 20 or 30 years. If you die during that period, your beneficiaries receive a payout.
Pros:
Affordable
Simple and easy to understand
Fixed premiums
Cons:
No cash value
Term Coverage Will Expire After The Term
Best for: Freelancers and remote workers seeking temporary budget-friendly coverage.
Whole Life Insurance
This is a “buy it and forget it” policy. It lasts for the duration of your life, provided you continue paying the premiums. It also has a savings component that builds up over time.
Pros:
Lifetime coverage
Accumulates cash value you can take out loans against
Cons:
More expensive
Can be complex
Best for: Business owners looking for permanent coverage with an additional savings component.
Universal Life Insurance
Policy type that gives you flexibility in adjusting premiums and death benefits over time. It builds cash value like whole life insurance.
Pros:
Adjustable coverage
Hope for growth of investments in future.
Cons:
More complex
Risks Involved in Investment Component
Best for: Business owners with variable income who need flexibility.
Key Person Insurance
Key person insurance is crucial if you own a business, and your absence would negatively impact its finances. General liability insurance provides a payout to your business, keeping it afloat if something happens to you.
Pros:
Protects your business
Ensures continuity
Cons:
It’s a business-specific, not personal
Based on company size and revenue, premiums may vary
Best for: Free agents who have employees or partners that rely on them.
What to Look for in a Policy
After you figure out what type of insurance is right for you, get into the details.
Coverage Amount
How much do you need? One common rule of thumb is 10 times your annual income. But consider:
Outstanding debts
Projected costs (kids’ education, mortgages, etc.)
Business obligations
Policy Flexibility
Income is unpredictable for freelancers, entrepreneurs, and many other professions. Can you readjust your premiums, if need be? Some policies allow it.
No-Exam vs Medical Exam Policies
If you’re in good health, a medical exam can qualify you for better rates. But if you’re always on the move, or if you just don’t want the burden, a no-exam policy may be more convenient.
Provider Reputation
Not every insurance company gets self-employed workers. Seek providers that have a reputation for servicing freelancers and entrepreneurs.
Common Mistakes to Avoid
Waiting too long. The younger and healthier you are, the less you pay in premiums.
Underestimating your needs. It’s not enough simply to pay off debts. Think long-term.
Choosing price over value. The most affordable policy isn’t necessarily the best — examine benefits and coverage.
Ignoring riders. Riders (aka critical illness coverage) can help strengthen your policy.
Failing to review your policy. Life changes. Every few years review your insurance policy to see if it still works for you.
Where to Buy Life Insurance
The key is to choose the right provider. Consider:
Web sites like Policygenius and Haven Life will assist you in making an apples-to-apples comparison of policies.
Insurance companies – Direct providers such as Prudential or Northwestern Mutual provide tailored plans.
Independent agents — They will compare policies from multiple insurers to find the one that fits best.
Final Thoughts
Life insurance isn’t the most exciting topic, but for freelancers, entrepreneurs, and remote workers, it’s a vital consideration. Without work-supported coverage, you must manage your own financial security.
The trick is to find a policy that suits your distinctive lifestyle. Be you a digital nomad, a startup founder or a freelancer managing several clients, there’s an insurance solution tailored for your lifestyle.
Take your time. Compare options. Ask questions. And get insured — because you can make no better investment than in your future.