Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.

Life insurance for the self-employed

Protect your family and your business with the right policy.

Updated

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: Haven Life

Customized term life insurance policies up to $3 million, no medical exam for certain applicants.

  • Up to $3 million in affordable term coverage
  • Dependable level term premiums
  • No commission nor up-selling

Customized term life insurance policies up to $3 million, no medical exam for certain applicants.

  • Competitive rates at an affordable price
  • Effortless online application process
  • No medical exam necessary for qualified applicants

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 and family 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 or key man insurance.

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.

Protect your loved ones
Compare affordable quotes from 12+ A-rated life insurance companies side-by-side.

Need help? Talk to a customer specialist

X

If I die, how can my business affect my loved ones?

Aside from your family depending on your business income — they may also have to figure out how to handle the business moving forward. Here are reasons your family might have to step in after your death:

  • Loans backed by personal assets. If your business loans are backed by personal assets your family could lose their home, cars or any other collateral used to start your business.
  • The sell of your business. If your family has to sell your business quickly because they aren’t equipped to run it, they may be forced to sell it for cheap, or during bad market conditions.
  • Keep your business running. If your family relies on this income alone they may be forced to learn to run the business or assist your business partners during a stressful time.

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 Minimum Coverage Maximum Coverage Medical Exam Required
Bestow
21 - 54 years old
$50,000
$1,000,000
No
Affordable 10- and 20-year term life insurance policies with instant quotes and no medical exams.
LadderLife™ Life Insurance
20 - 60 years old
$100,000
$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.
Policygenius
18 - 85 years old
$10,000
$10,000,000+
Depends on provider and policy
Compare affordable quotes from 12+ A-rated life insurance companies side-by-side.
Haven Life
18 - 64 years old
$100,000
$3,000,000
No
Customized term life insurance policies up to $3 million, no medical exam for certain applicants.
Sproutt
18 - 100 years old
$50,000
$3,000,000
No
This life insurance broker combines technology and the human touch to match you with a policy tailored to your needs.
loading

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

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site