7 Types of Freelancers Who Need Life Insurance
A common myth about life insurance is that it’s for the elderly and those who are near death. But like many myths, there’s no truth in it. Life insurance is a smart addition to everyone’s financial portfolio, regardless of your age, income, or living situation. Here are some of the types of freelancers who need life insurance and what role it can play.
1. World-traveling, Single Freelancers
Even if you are single, traveling the world, working an online part time job and don’t have a family that depends on you for financial support, it’s still smart to get a life insurance policy. At the very least, it will prevent family or friends from having to cover the expense of burial and a funeral. And if you aren’t debt-free, consider increasing the amount to also pay off any outstanding loans you have so your loved ones aren’t stuck with those bills.
Whether you decide to name a sibling, close friend, or parents as your beneficiary, be sure to let them know and give them access to the life insurance documents so they can make a claim for the payout if necessary.
2. Recent College Graduates working Freelance
You just graduated, maybe you aren’t quite settled yet, and life insurance seems pretty low on your list of priorities. If you are working away at side jobs and weekend jobs, you may be on to something great. So why are you someone who might need life insurance? In order to set yourself up for success by treating your job like it’s the real thing. Who knows, you may decide to stick with the freelance life.
Whether you ultimately decide to take a full-time job with a big company or not, you’ll want to take advantage of rock-bottom rates on term life insurance while you are young.
3. Stay-at-home Parents with a Side Job
Are you working stay at home job or an online part time job to generate some extra income for your family? Even if it isn’t full-time work, you are still contributing financially to your family. Instead of focusing on life insurance for income replacement, think about who your partner or spouse would have to hire to help them manage the household and take care of the kids. What would those services cost?
Buy a life insurance policy that lasts until the kids are on their own. Make sure the face value is large enough to pay off debts and hire someone to handle childcare and household management.
4. Freelancing Couples Without Children
Think about whether you could live comfortably on the money you make without your partner’s financial contribution. Do you have enough money saved to cover funeral and burial expenses that can exceed $10,000? Could you pay off your debts quickly to reduce your monthly payments if your spouse died?
If not, you might need life insurance. A term life insurance policy could prevent financial hardship from making life harder than it has to be.
5. Retirees Who work a Side Job for Extra Income
Side jobs and online part time jobs post-retirement is a smart way to let your investments continue to grow without having to trim the budget. Many retirees make money freelancing and enjoy working without the stress and pressure of a full-time job.
If your death would cause financial hardship, consider purchasing a term life insurance policy to cover any outstanding debts and prevent your loved ones from having to pay for your funeral out of their own pockets.
6. Part-time Freelancers With Life Insurance Through A Full-time Job
Freelancing on the side helps pay down debt and build up savings. It’s also a great way to build a business so that you can eventually leave your full-time job. Even if you have life insurance through work, consider purchasing a simple term policy while rates are at an all-time low. Life insurance premiums go up as you age, so buying now will save you money down the road.
7. Single Parents Using Side Jobs to Support A Family
For single parents, life insurance is a necessity. It’s crucial to provide for your children in case you die while they still depend on you for financial support. Think about who would care for them in your absence. If you don’t want to make their other parent the beneficiary of your life insurance policy, consider asking a close relative or family friend to be the custodian of the insurance payout if necessary. Your children will need money for everyday expenses, but they’ll also need financial support throughout their college years and into young adulthood. For this reason, consider buying the biggest term life insurance policy you can afford.
Life insurance isn’t a fun or easy topic to discuss with friends and family. However, doing so will give you peace of mind. There are a lot of things that freelancers must take care of on their own. Life insurance is one that’s easy to check off your list, so you might as well get to it!
