Getting life insurance when you're self-employed | finder.com

Life insurance for the self-employed

Protect your family and your business with the right policy.

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If you’re self-employed, life insurance could provide a safety net for your family and the people who depend on your business.

Why we like:

Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.

  • Apply online and get a decision instantly
  • Cancel your coverage at any time
  • No annual fees

Why we like: LadderLife™ Life Insurance

Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.

  • No brokers trying to upsell you
  • Your rate is locked in until your term expires
  • 30 day money-back guarantee
Promoted

Why do I need coverage if I’m self-employed?

If you’re a small business owner or self-employed, the payout from a life insurance policy could be what your business needs to keep it afloat.

Depending on the coverage you choose, your policy can cover everyday operating expenses, pay off loans or take care of real estate taxes and sales. A few reasons you may need life insurance coverage if you’re self-employed:

  • Income from your business pays the bills and supports your family.
  • You want your business to keep running without you.
  • You have debt or real estate connected to your business.
  • You’re looking to help your partners or beneficiaries with a buy–sell agreement.

MUST READ: What is key man insurance?

Key man insurance is a life insurance policy on an owner, founder or key employee of a business. Such people are considered critical to the success of the business — so critical, the business could fail without them.

The business is the beneficiary of key man insurance to help it avoid bankruptcy if the person who’s important to the company dies. If the business closes, the policy payout can be used to settle debts, pay investors and help with selling the business.

What type of life insurance policy do I need?

The type of life insurance policy you need depends on how much you can afford. Consider factors like your debt, financial responsibilities and business assets.

Term
Usually a more affordable option, this coverage could be good for those just starting a business with little funds.

  • Choose coverage for 10, 15, 20, 25 or 30 years.
  • Good for younger people in good health.
  • Renew or convert to a permanent policy after your term ends.

Permanent
This coverage lasts as long as you pay your premium and can include:

  • Whole life. As you pay your premium, your policy builds cash value. You can use this cash as a loan if you need it, but it decreases the payout to your beneficiaries.
  • Universal life. Payment flexibility with the option to increase or decrease your payments and change how often you pay. Use the money in your policy for a loan or to cover payments.
  • Variable life. Like universal life, but you can invest in securities like stocks, bonds and mutual funds.

Compare life insurance companies

Name Product Issue Ages Coverage Range Medical Exam Required
18 - 85 years old
$10,000 to $10,000,000+
Depends on provider and policy
Compare quotes from 16 life insurance companies side by side.
18 - 64 years old
$100,000 to $3,000,000
No
Customized term life insurance policies up to $3 million, no medical exam required.
20 to 60 years old
$100,000 to $8,000,000
No
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
21 - 54 years old
$50,000 to $1,000,000
No
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
25 - 60 years old
$100,000 to $5,000,000
No
Offers term life insurance with accelerated underwriting. No-exam coverage up to $1,000,000 for those who qualify.
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
Get a quote within minutes from more than a dozen insurers.
20 - 85 years old
$100,000 to $1,000,000
Depends on policy
Get a term or whole life insurance quote from Fidelity Life - starting as low as $15/day.

Compare up to 4 providers

Bottom line

Deciding to get life insurance coverage if you’re self-employed means providing a plan for your business — and your family after you’re gone. Compare life insurance policies to find the right fit for your business and budget.

Frequently asked questions

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