Self-employment has its perks, including being your boss, setting your hours, and working from anywhere. However, self-employment also means that you don’t have an employer-sponsored benefits package, including health, disability, and life insurance. Therefore, as a self-employed individual, you need to take care of your insurance needs yourself. Here are some insurances that self-employed individuals should not overlook.
Your health is your wealth, and without it, you can’t run your business or enjoy your life. Therefore, health insurance is a must-have for self-employed individuals. Health insurance will help you pay for medical expenses, including doctor visits, hospital stays, and prescription drugs. Keep in mind that without health insurance, a single medical emergency can bankrupt you. Here are some health insurance options for self-employed individuals:
- Individual health insurance: You can buy individual health insurance from the marketplace, where you can compare plans and prices.
- COBRA: If you left a job that provided health insurance, you may be eligible for COBRA, which allows you to keep your previous employer’s health insurance for up to 18 months.
- Group health insurance: If you have employees, you can offer them group health insurance, which can also cover you as the business owner.
Disability insurance is often overlooked by self-employed individuals, yet it’s essential. Disability insurance provides income replacement if you become sick or injured and can’t work. Keep in mind that disability can happen to anyone, and it’s not just limited to physical disabilities. Mental illnesses, such as depression and anxiety, can also prevent you from working. Here are some disability insurance options for self-employed individuals:
- Individual disability insurance: You can buy individual disability insurance, which can provide you with a monthly benefit if you become disabled.
- Social Security Disability Insurance (SSDI): If you have paid enough Social Security taxes, you may be eligible for SSDI if you become disabled.
- Worker’s compensation: If you have employees, you may be required by law to have worker’s compensation insurance, which can also cover you if you become disabled while working.
Life insurance is not just for married couples or parents; it’s also for self-employed individuals. Life insurance can provide financial protection for your loved ones if you pass away. Keep in mind that funeral expenses and outstanding debts can add up quickly. Here are some life insurance options for self-employed individuals:
- Term life insurance: Term life insurance provides coverage for a specific period, such as ten or twenty years, and it’s often the most affordable option.
- Permanent life insurance: Permanent life insurance provides coverage for your lifetime and may include a savings component.
- Group life insurance: If you have employees, you can offer them group life insurance, which can also cover you as the business owner.
As a self-employed individual, you need to take care of your insurance needs yourself. Health insurance, disability insurance, and life insurance are some insurances that self-employed individuals should not overlook. By having the right insurance coverage, you can protect yourself and your loved ones from financial hardship.