Life Insurance for the Self-Employed (Discounts & Rates)

Self-employed workers include business owners and freelancers. Regardless of the type of work, life insurance provides self-employed income protection. The type and amount of insurance depend on your current income, debt, and how much you made the previous year. Compiling this information will help you find the right life insurance for self-employed workers.

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D. Gilson is a writer and author of essays, poetry, and scholarship that explore the relationship between popular culture, literature, sexuality, and memoir. His latest book is Jesus Freak, with Will Stockton, part of Bloomsbury’s 33 1/3 Series. His other books include I Will Say This Exactly One Time and Crush. His first chapbook, Catch & Release, won the 2012 Robin Becker Prize from Seve...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Dec 14, 2021

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The Highlights

  • Past year’s income is used to determine eligibility and rates
  • High-risk jobs increase life insurance rates
  • Freelancers should consider private life insurance

Most companies provide insurance benefits but self-employed workers must acquire insurance on their own.

Purchasing life insurance can help those lacking a definite income protect their earnings. The best insurance companies offer life insurance for self-employed workers.

For those looking for life insurance rates for self-employed workers, enter your ZIP code to find the best life insurance quotes in your area.

How much does life insurance for self-employed workers cost?

Life insurance companies use several factors to determine rates of those looking to buy life insurance for self-employed workers. These factors include your age, gender, health, hobbies, and the type of policy purchased.

The cost of life insurance for the self-employed largely depends on the type of policy purchased. According to the Insurance Information Institute, there are various ways to choose the right type of policy.

The two primary types of life insurance are term life and permanent life insurance. Term life is more affordable for most people.

Additionally, the rates of a level-term life plan don’t change, ensuring you can continue to afford it.

Unlike health insurance, life insurance usually isn’t deductible. However, if you own a business and offer life insurance as an employee benefit, you can use your premiums as a deduction.

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How is life insurance for self-employed workers determined?

There are various ways in which a life insurance company can determine eligibility.

Self-employed workers often don’t have a guaranteed amount of income so providers can use your past year’s earnings to determine the amount of coverage for which you qualify.

The maximum coverage offered by most providers depends on your income reported to the IRS. However, those looking for affordable life insurance for self-employed people usually don’t require the maximum amount of coverage.

How does a job affect life insurance for self-employed workers?

Life insurance providers use the risk of a person to determine their rates. This might include your age, any health issues, hobbies, and your occupation.

Those that work in a high-risk environment will see higher life insurance rates.

While every life insurance company for self-employed workers increases the rates of those in high-risk jobs, each provider will judge jobs differently.

For example, some might consider a rideshare driver risky to insure while others might consider it a low-risk form of income.

How much life insurance for self-employed workers is needed?

In most cases, self-employed income protection should be 10 to 15 times your annual income.

If a freelance job is your only source of income, you might consider additional life insurance to cover various outstanding debts, such as a car loan, mortgage, or student debt.

Freelancers oftentimes have multiple sources of income. When applying for income protection insurance for self-employed workers, you should include all of your forms of income to ensure that you’re providing accurate information.

Those with a full-time job might have life insurance through their company and think that’s enough coverage. However, only a small amount of company-provided life insurance carries over.

Those with a full-time job and part-time position should consider private life insurance. This will ensure you’re protected should your employment at the full-time job come to an end.

Following a life insurance guide will help you determine the total amount of life insurance to purchase.

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Life Insurance for the Self-Employed: The Bottom Line

Self-employed workers often have fluctuating incomes and life insurance offers protection.

If their income decreases or stops, it can help pay expenses like car and mortgage payments. Life insurance for self-employed workers ensures they can protect their income.

To find life insurance quotes for self-employed workers, enter your ZIP code to discover the best life insurance rates in your area.

Are you looking for free insurance quotes?

Your one-stop online insurance guide. Get free quotes now!

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