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Life insurance for the self-employed

You can get life insurance if you're self-employed, you'll just need proof of income.

Narrow down life insurance companies by coverage levels, riders offered, medical exam requirements and more to get a life insurance quote.

1 - 5 of 5
Name Product Issue age Minimum Coverage Maximum Coverage Term Lengths Medical Exam Required
20 - 60 years old
10, 15, 20, 25 or 30 years
No, for coverage up to $3M
Apply for term life insurance online without the medical exam. Get an instant decision and adjust your coverage at no charge.
18 - 60 years old
10, 15, 20, 25, 30 years
Apply for term life insurance in minutes and get an instant decision all online. Plus, you’ll get to skip the medical exam.
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Policygenius - Life Insurance
18 - 85 years old
10, 15, 20, 25, 30 years
Depends on provider and policy
Compare 12+ top insurers side-by-side to get the best possible deal, and shop return of premium policies online.
Nationwide life insurance
18 - 80 years old
10, 15, 20, and 30 years
Depends on policy
Select Go to site to apply for Nationwide Life Essentials: 21-55 years, no medical exam required.
JRC Life Insurance
JRC Life Insurance
18 - 85 years old
10, 15, 20, 25, 30, 35, 40 years to lifetime/age 121
May be required
Compare policies up to $10 million from 45+ top insurance companies with the click of a button.
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We compare the following brands

Life insurance offers self-employed workers a safety net that can protect your business and your family. Whether you’re a freelancer, independent contractor, gig worker, small business owner or rideshare driver, you’re eligible for life insurance. You’ll just need to show your last year’s income. But, determining how much coverage you need and which type of policy fits your lifestyle comes down to your income, expenses and savings.

How much life insurance do self-employed workers need

The general rule for anyone getting coverage is to aim for 5 to 10 times your annual salary. And, even if you don’t make a ton of money you’re likely eligible for coverage much higher than 10 times your salary. But how much you really need comes down to your income, savings, loans and expenses. Here’s how to calculate your life insurance needs:

  1. Calculate your liquid assets. Add up all of your money, including cash, savings account and checkings account.
  2. Tally up your expenses. Include debt, monthly expenses and your annual income multiplied by the number of years you want to replace your income. Consider your mortgage, day-to-day costs, childcare, loan repayments, funeral costs and your dependent’s needs.
  3. Subtract your liquid assets from your expenses. This number is the minimum amount of coverage you need.

How to calculate income when it’s unpredictable

To find out how much coverage you need, you’re asked to input your annual salary. And, to get approved for coverage, you have to show proof of income. But, if your income isn’t steady, or changes from month to month, this can be a confusing calculation. You have two options:

  1. Use whatever income you reported on your last annual income tax return. This is the simplest way to calculate what number to use as your annual income.
  2. Take your highest income month and multiply it by 12. This represents your earning potential, that way your higher capability of earnings is covered.

Take into account all revenue streams including tips or multiple clients or contracts when calculating your annual income. Use bank statements, or other documentation to determine your overall income.

Benefits of life insurance for self-employed workers

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

Personal benefits

  • You can take care of dependents who depend on your income
  • You can cover your own funeral costs
  • Your family can pay off your debts such as a mortgage, car loans or credit cards
  • You can leave behind money to take care of aging parents

Business benefits

  • Your business will have the finances to keep running without you, especially if your family depends on this income
  • Any debt connected to your business such as real estate or loans can be paid
  • Your business partners or beneficiaries can have access to finances with key man insurance
  • Any business loans backed by personal assets, like your home, can be paid off to keep your family secure
    Protect your loved ones
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    How to apply for life insurance when you’re self-employed

    The buying process is the same, regardless of whether you’re self-employed or work for a company. Here’s how to apply:

    1. Set aside documentation you need to apply. Gather supporting documentation about your income, such as last year’s tax return. Plus, your personal information such as proof of residency, Social Security number and proof of identity.
    2. Determine how much coverage you need, then get multiple quotes. Get quotes from multiple insurers to make sure you’re scoring the best price for your age and health status that offers the amount of coverage you need.
    3. Complete your application. Use the helpful documentation you’ve set aside to complete your insurer’s application process, this may include personal information, income information and basic health questions.
    4. Take a medical exam. If you’re opting for traditional coverage, such as term life, you’ll likely be required to take a medical exam for coverage approval.
    5. Wait for approval. Once you’ve completed your medical exam and health questionnaire, an underwriter assesses your application. This process can take anywhere from a few business days up to eight weeks depending on the insurer.
    6. Sign off on your policy. Once approved, you’ll be sent policy documents for review. Double-check all of your details including coverage and price. If everything looks right, sign the documents and authorize payment.

    Self-employed workers should opt for term life

    Term life insurance is the most affordable option for most people. It offers coverage that lasts a specified amount of time from 10 to 30+ years. You’ll be able to get coverage from around $100k up to over $5 million if needed.

    Plus, most term life insurance comes with level premiums, which means your monthly premiums stay the same for your entire policy. Having level premiums makes it easier to budget for the cost of life insurance, especially if you’re a freelancer interested in life insurance, since your monthly salary may fluctuate.

    However, to be eligible for term life you have to pass a medical exam in most cases. And, the best rates are reserved for healthy people. So, if you have a serious health condition, you may instead opt for a no-exam policy that costs more but offers guaranteed coverage.

    Term life isn’t as expensive as you might think

    Your life insurance rates factor in your age, gender, health and the size and policy length you choose. But to give you an idea, the average cost of a $500,000, 20-year term life insurance for a healthy 30-year-old is around $25 a month for a man and $21 a month for a woman.

    When you might consider whole life

    If you’re a self-employed person who has a steadier monthly income and the budget to pay more towards life insurance, you might consider this type of permanent policy. It costs about five to 15x more than term life insurance, but it offers coverage that lasts your entire life.

    Plus, it acts as an investment-like product, where part of your monthly premiums are invested to build cash value over time. You can use the cash value to pay for retirement, take out a no-interest loan or pay towards your monthly premiums.

    Buy additional coverage as your salary grows

    If you’re just starting out, your business or client base may grow, which means a higher salary and the possible need for more coverage. Or, you may consider purchasing more coverage if your family grows or you acquire more assets.

    You can’t increase your coverage amount on term life insurance. However, you can apply for a new term life insurance policy that can be stacked on top of your current policy. Just know your new rates are based on your new age and health status, so your second policy may cost more.

    Life insurance isn’t tax-deductible for the self-employed

    Life insurance isn’t tax-deductible for anyone, including people that are self-employed. There is one exception. If you own a business and offer your employee’s group life insurance, the premiums you pay towards your employee’s life insurance are tax-deductible.

    Side-hustlers need life insurance, too

    Even if you have a group policy through your full-time job, consider opting for a separate private life insurance policy to cover your entire income and all of your current and future expense. Group life insurance policies tend to sit on the lower end of coverage, such as 50k to 100k, which may not be enough to cover your family’s needs after you die.

    Plus, if your side-hustle becomes your full-time gig at some point, you’ll lose your group life insurance.

    How key man insurance can help small business owners

    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.

    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.

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