Life Insurance 101 for Freelancers: What You Need to Know

When you’re self-employed, you’ve built a life around independence. You set your own schedule, choose your own clients, and take control of your financial future. But have you thought about protecting that future for the people who rely on you?

Life insurance may not be the first thing on your mind when managing your freelance business, but it should be. If you have loved ones who depend on your income—whether it’s a partner, children, or even aging parents—life insurance ensures that they’re financially secure if something happens to you.

Why self-employed workers should prioritize life insurance

Unlike traditional employees, freelancers don’t have the safety net of employer-sponsored life insurance. That means it’s up to you to put coverage in place that protects your family and assets. Here’s why it’s a smart move:

• Protect Your Loved Ones: If you were to pass away unexpectedly, your family would lose not just you, but also the income that supports them. Life insurance ensures that your family can maintain financial stability in your absence and helps cover expenses like rent or mortgage payments, childcare, daily expenses, and more.
• Cover Outstanding Debts: Do you have a mortgage, student loans, or credit card debt? If you pass away before these are paid off, your next of kin could become responsible for them. A life insurance policy can help prevent your loved ones from inheriting your financial burdens.
• Have Peace of Mind: Knowing that your loved ones are protected allows you to focus on growing your business and enjoying life, rather than worrying about “what if” scenarios.

Choosing the Right Policy: Term vs. Whole Life Insurance

When considering life insurance, you’ll typically choose between term life insurance and whole life insurance.

• Whole life insurance covers you for your entire lifetime and builds cash value over time, but it comes with higher premiums.
• Term life insurance, which Freelancers Union offers, provides coverage for a set period and is generally more affordable, making it a great option for freelancers looking to keep costs down.

For most self-employed workers, term life insurance is a cost-effective way to ensure financial protection during key earning years.

How Much Coverage Do You Need?

Determining the right coverage amount depends on several factors, including your income, debts, and dependents. You’ll need to decide how much “death benefit” your family needs. As you might suspect, your premium depends on how much “death benefit” your family will receive. So if you’re looking to leave $50,000 behind to cover taxes or a funeral, your premium will be a lot less than a $1 million policy intended to support your dependents for several years. A common rule of thumb is:

• Multiply your annual income by 10 to determine a basic coverage amount.
• If you have children, add $100,000 per child to help cover future education and living expenses.
• Factor in any outstanding debts, such as a mortgage or business loans, to ensure those costs are covered.
• Consider how long you’ll need coverage—if your children are young, you may need a longer term than someone whose kids are in college.

How to get Affordable Coverage

Getting life insurance might seem complicated, but we’re here to make it simple and affordable for you. As a Freelancers Union member, you get access to group coverage under Guardian’s term life insurance policy, a flexible, easy-to-use plan tailor made for freelancers. 

With term life insurance options tailored for independent workers, you can get the coverage you need without the hassle of employer restrictions. First, you’ll want to check out our website to view the premium rates for each policy amount in relation to your age, sex, and smoking status. View our rates here.

Once you’ve determined the plan you want, you can start the application process. The application for term life insurance will list Freelancers Union Inc. as your employer, but don’t worry - this will not affect your taxes or impact your status as an independent contractor.  

You’ll be asked about the coverage amount that you want, and if you want to add coverage for your spouse and/or dependents. 

Plus, with our group plan, an evaluation of your medical history may not be required for policies up to $100k. However, you will be asked a few questions about your health, including whether or not you use tobacco, if you’ve received medical care for certain illnesses (including but not limited to Cancer, Diabetes, & more), and if you or your dependents have ever been diagnosed or treated for AIDS.  

Have any questions about the application process? Reach out to our team at membership@freelancersunion.org and we’ll be happy to help!

Don’t Wait—Protect Your Future Today

Freelancers often think about health insurance, retirement savings, and business expenses—but life insurance is just as crucial. It’s not about you; it’s about protecting the people you love. It’s a simple step that can make a world of difference for those you love.

Apply for coverage today: https://freelancersunion.org/insurance/term-life-insurance/