Life Insurance for Self-Employed People

Getting life insurance for self-employed people is very important. These policies can ensure your businesses continued success and your family's financial well-being. Self-employed people need to think about insuring themselves since they are not receiving benefits from anyone else. Read more to discover how self-employed people can get the right life insurance coverage for them.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Dec 14, 2020

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Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.

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Quick Facts

  • Life insurance can provide self-employed people with a safety net for their family and business in the event of their death.
  • If you want your business to continue running when you are gone, life insurance is important coverage to have.
  • Depending on your situation, there are different life insurance policies that may work better for you than others.

Life insurance coverage is important for all to have, but it is especially crucial for self-employed people. Should anything happen to you, this coverage will be crucial in ensuring your family and business have the resources they need to carry on.

Life insurance for self-employed people will vary based on the priorities they have for their benefits. How much life insurance do you need if you’re self-employed?

Do you want to ensure your business will have funds to pay off any debts or fufill any obligations that may be left when you pass? Are you concerned about your family’s well being without your income?

No matter what your concerns may be or what you to protect in the event of your death, life insurance for self-employed contractors and business owners is very important. Let’s take a closer look at life insurance for self-employed individuals.

If you’re ready to start comparing affordable life insurance quotes for self-employed people now, enter your ZIP code above. Not yet ready to buy life insurance for self-employed people? Read on to learn more.

What insurance do I need if I am self employed?

Depending on your situation, the life insurance coverage you are going to want will vary. Are you a contractor? Do you own your own business? The specifics of your situation will guide you to the right amount of life insurance coverage.

Knowing the best life insurance for self-employed people will help you find the best life insurance rates for self-employed.

If you’re a self-employed contractor with little overhead or business expenses and other matters to tend to, then a standard life insurance policy that pays benefits to your beneficiaries (generally your family) is probably all the life insurance coverage you need.

You will need to choose from whole life, term, and other types of life insurance policies to get the right coverage for you. There are key differences between term vs permanent life insurance policies.

If you own a business and are concerned about its operations after you pass, you may want to look into key man insurance.

Key man insurance is designed to protect businesses in the event that a founder, owner, or another key member of the business dies. Entrepreneur lists some great reasons you may need key man insurance.

The “key person” the insurance policy covers needs to be someone who is so critical to the business that without them, the business could completely fail.

Under these policies, the business is the key beneficiary and the benefits are used to help avoid bankruptcy, pay out investors, and settle other debts.

Is life insurance tax deductible for self-employed people?

Yes. The IRS allows self-employed individuals to write off the costs of select life insurance policies from their annual taxes. However, if the business receives any portion of the benefits from the policy, the expense cannot be written off of your taxes.

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What is the cost of insurance for self-employed individuals?

Self-employment will not have any real effect on the rates you pay for your life insurance. Life insurance companies take a close look at your lifestyle, overall health, health history, and family health history to determine what your life insurance rates will be.

Take a look at the table below to see the average costs of life insurance from the top 10 providers in the country.

Average Monthly Life Insurance Rates by Age
AgeAverage Monthly Rates for a Male, $100,000 PolicyAverage Monthly Rates for a Female, $100,000 PolicyAverage Monthly Rates for a Male, $250,000 PolicyAverage Monthly Rates for a Female, $250,000 PolicyAverage Monthly Rates for a Male, $500,000 PolicyAverage Monthly Rates for a Female, $500,000 Policy
25$11.03$10.02$22.10$12.91$23.19$19.04
30$11.12$10.07$15.31$13.02$23.85$19.26
35$11.12$10.07$15.42$13.02$24.07$19.26
40$12.65$11.12$17.94$15.21$29.10$23.63
45$14.57$13.31$21.55$19.69$36.32$32.60
50$18.60$17.20$30.19$27.02$53.60$47.26
55$24.51$20.61$42.88$34.35$78.98$61.91
60$35.88$27.48$71.10$50.86$78.98$94.94
65$51.06$37.76$109.82$75.14$212.85$143.51
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As you can see from the table above, age, health, and lifestyle play a big factor in what your monthly life insurance rates are.

How do you apply for self-employed life insurance?

If you currently don’t have life insurance, you should start planning to get some. Life insurance is important when you are self employed since you aren’t receiving any benefits from an employer.

Life insurance could save your business or help keep your family financially afloat in the event that you pass on. It is never too early to start considering life insurnace.

When you’re ready to start comparing the best life insurance quotes in your locality, enter your ZIP code below. Which life insurance company for self-employed people is best for you? Find out now.

References:

  1. https://www.entrepreneur.com/article/56068

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