Are you self-employed and currently without life insurance? Do you believe life insurance is only for those with traditional jobs and a steady income? Think again. As a self-employed individual, you are the backbone of your business and your family’s financial stability. Therefore, it’s crucial that you have a solid plan in place to protect yourself and your loved ones in case of the unexpected. 

There are several things, as a self-employed individual, you can do to improve the likelihood of being approved for a life insurance policy. First, you should make sure to have all of your financial documentation in order, such as tax returns and bank statements. You should also be prepared to provide a detailed explanation of your work and income. Finally, it may be helpful to work with a life insurance broker who can assist you in the application process.

In this blog, we’ll explore the importance of life insurance for self-employed individuals, the different types of life insurance policies available, and how to choose the right one to fit your unique needs. Don’t wait until it’s too late to secure your future.

1. Permanent Life Insurance

Self-employed individuals have a unique set of needs regarding life insurance as their financial situation is a bit more uncertain. A permanent life insurance policy is one option that can provide death benefit protection and a savings component. This type of policy covers the insured person for their entire life, for a fixed price. This can provide peace of mind and financial security for self-employed individuals and their families. As a freelancer, small business owner, or gig worker, we understand you have a lot on your plate. In addition to running your business, you also have to worry about your financial security. One way you can ensure that your loved ones are cared for financially in the event of your passing is to take out a permanent life insurance policy. While a permanent life insurance policy is generally more expensive than term life insurance, it allows you to access tax-deferred savings. Therefore, you can take a loan against these savings. Get in touch with us at Alia Quotes to learn more about this option.

2. Term Life Insurance

A term life insurance policy is more affordable than a whole life insurance policy, and it provides cover for a designated period, usually 10 to 30 years in 5-year increments. This type of policy is ideal for self-employed individuals because it gives them the peace of mind of knowing that their loved ones will be taken care of financially if something happens to them. This policy also allows for the convenience of adjusting coverage which can be crucial for you if you are new to self-employment. Depending on the fluctuations of your earning, you can adjust your coverage upward or downward. And with the help of the expert team at Alia Quotes, you can access term life insurance policies conveniently and fast.

3. Universal Life Insurance

As a self-employed individual whose income keeps fluctuating, you may want a self-employed life insurance policy that can give you lifetime protection. A universal life insurance policy may be a good option for you. This type of policy provides coverage without an expiration date, comparable to the one offered under a permanent life insurance policy. Still, depending on your needs and income changes, it allows you to increase or decrease your coverage costs. This flexibility can be helpful if you are looking for lifetime coverage but your income keeps fluctuating, or if you have other financial obligations that you need to consider. Talk to the team at Alia Quotes to learn more about this insurance policy.

4. Final Expense Insurance

Final expense insurance is a policy designed to assist self-employed individuals’ families with end-of-life expenses. These expenses include funeral arrangements, burial, medical and legal debts. The self-employed life insurance policy can help to ease the financial burden on your family during a difficult time after your demise. Schedule a call with the expert team at Alia Quotes to learn about this option.

How Much Life Insurance Do You Need When Self-Employed?

When you’re self-employed, it’s important to have enough life insurance to cover your business expenses in the event of your passing. Your amount of life insurance needed depends on several factors, including your business size, your outstanding debts, and your family’s financial needs. Generally speaking, you should have enough life insurance to cover at least six months of your business expenses. This will give your family and/or business partners time to get things in order and make arrangements for the future. Of course, the amount of life insurance you need ultimately depends on your unique circumstances. If your household is large or has a lot of debt, you may need more than six months’ worth of coverage. We invite you to utilize our insurance calculator or talk to us here at Alia Quotes to better understand of how much life insurance you should take depending on your circumstances.

How to Choose the Best Insurance Cover

Without access to employer-sponsored life insurance as a self-employed individual, you must find an individual policy that meets your needs. The best life insurance option for a self-employed individual is a policy that covers the following things:

  1. The policy should provide a death benefit large enough to replace the lost income in the event of your demise as the breadwinner.
  2. The policy should have a flexible premium that can be adjusted as the self-employed individual’s income changes.
  3. The policy should have the option to convert to a permanent policy later on if the self-employed individual’s financial situation changes.

Finding Self-Employed Life Insurance Coverage

For self-employed individuals, life insurance is an essential part of financial planning. It can provide much-needed financial security for your family if the unexpected happens. Many self-employed life insurance providers and products are available, so choosing one that meets your needs and budget is important. We always recommend that you compare rates before buying a policy.

If you are self-employed and in need of help with finding life insurance coverage, get in touch or schedule a call with an expert at Alia Quotes. We help connect self-employed individuals with a range of life insurance policies from top-rated providers. With the help of our team, you will be able to choose the best coverage.

Self-employed insurance saleswoman on the phone with a client


Can my LLC pay for my life insurance?

Yes, it is possible for your LLC to pay for your life insurance premiums, but there are some important considerations to keep in mind. First, the payment must be considered a reasonable and necessary business expense for tax purposes.

Additionally, the LLC should have a written agreement in place outlining the terms of the payment and specifying that the policy is owned by you personally, not by the LLC. It is important to consult with a tax professional and attorney to ensure that this arrangement is structured correctly.

Why do self-employed people need life insurance?

Life insurance is important for self-employed individuals because they often lack the safety net of employer-provided benefits. In the event of their untimely death, life insurance can provide financial protection for their loved ones by covering expenses such as outstanding debts, funeral costs, and ongoing living expenses.

Additionally, life insurance can be used as part of an estate planning strategy to transfer assets to heirs tax-free.

Do I need life insurance if I own a business?

The need for life insurance when you own a business depends on your individual circumstances. If you have dependents or business partners who rely on your income, life insurance can provide financial protection in the event of your death. Additionally, life insurance can be used to fund a buy-sell agreement or other business succession plan, ensuring a smooth transition of ownership in the event of your death.

It is important to evaluate your specific situation and consult with a financial advisor or insurance professional to determine if life insurance is necessary for you.

What retirement plans are available for a self-employed person?

There are several retirement plans available for self-employed individuals, including Solo 401(k), SEP IRA, SIMPLE IRA, and individual 401(k). These plans offer various tax advantages and contribution limits, and the best option for you will depend on your individual circumstances.

It is important to consult with a financial advisor or tax professional to determine which plan is right for you and your business.