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A Guide to Term Life Insurance for Freelancers

April 09, 2018
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

Freelancers out there have to wear many hats—from visionary to marketing guru to company benefits coordinator—and that’s just your agenda before breakfast.

You’re at the forefront of an exciting shift in the economy—one that’s adding $1.3 trillion to the national piggy bank. But, as the shape of the American workforce changes, one thing hasn’t:

As a freelancer, you’re on your own when it comes to finding benefits—such as life insurance—that many employers offer salaried workers.

There are probably some roles that you love (managing your own time) and some that you don’t like as much (bookkeeping). If you’re a creative genius, but a bit spotty on the financial planning part of managing your business (or your life), we’re here to help.

Today we’re going to cover three common questions that freelancers have about life insurance:

  1. What is term life insurance?
  2. Do I need life insurance?
  3. How can I comparison shop term life insurance quotes online?

See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

An Easy Gig: Getting Term Life Insurance Quotes

More than 68% of freelancers choose to leave 9 to 5 jobs for the flexibility of more time with their families and to be fully in control of their financial future. One of the most important ways that a freelancer can make their future more secure is to have a term life insurance policy that would cover their family’s needs if they were to die unexpectedly.

» Calculate: Life insurance needs calculator

If you’re attempting to research life insurance companies online, however, you may have hit a roadblock when it comes to finding clear, objective answers about your policy options.

Let’s take care of that right now.

Quotacy’s free comparison tool allows you to view term life insurance quotes side-by-side in seconds. Answer a few short questions without disclosing your personal identity (no phone or email required) and then click to get your quotes.

You’ll be given quotes from multiple life insurance companies and when you’ve found the policy you’re interested in, you can apply online in just a few minutes. Our underwriters will review your application and make sure you’ve found the best possible policy for your lifestyle. We will keep you updated every step of the way by walking you through the life insurance buying process.

We created a FAQ of the most common term insurance questions. We’ll cover the highlights here for you as we know freelancers are working it all the time.

The Basics: What Is Term Life Insurance?

Term life insurance is the simplest and most affordable kind of life insurance. A term life policy protects your loved ones in the event that you pass away, providing a death benefit (a payment) designed to cover immediate expenses by replacing your lost income.

» Learn more: What Is Term Life Insurance and How Does it Work?

You choose the amount of coverage and term during which your family will be protected. The most common terms are 10,15, 20, 25, and 30 years; the best term for you depends on your insurance needs.

If you have young children, consider a longer term to ensure that they are provided for through college. You may choose a shorter term if your children are older, or if you are the sole provider for an aging parent. You can also ladder (combine) multiple policies to match your needs at different times in your family’s life.

The cost of your premiums will stay the same over the life of your policy’s term. Your beneficiaries receive a death benefit if you pass away during your term (provided that you’ve kept up with your payments).

Another reason to get insured is that if you get injured, you won’t have a group disability insurance plan to rely on—the responsibility will fall on your loved ones to make up for your loss of income.

Fortunately, a disability rider is an option with some policies.

The disability income rider waives premium payments and provides supplementary income if you become disabled and cannot work. Other rider options—such as long-term care riders and critical illness riders—provide protection for your family in the event that you become chronically ill or are diagnosed with a critical illness.

These riders can be an important replacement for worker’s compensation or medical leave when you are self-employed.

Is the death benefit tax-free for my beneficiaries? Yes!

Since you have already paid taxes on the money that you used to pay the premiums, the death benefit won’t be subject to tax.

How much life insurance coverage do I need?

If you have young children that you care for, you’ll not only have to replace lost income for you or your spouse (or life partner), you’ll need to cover childcare expenses.

If you’re a single parent, you’ll have to think about any extra costs that your extended family or loved ones may incur if they become your child’s caregiver. Will they have to reduce their work hours? Will they have to take on debt to pay for family expenses?

These are just a few things to consider as you pick a policy.

Even if you are among the top 20% of freelance earners, you may face fluctuations in your income from year to year. This may make it difficult to determine how to calculate the amount of coverage you’ll need to replace the loss of income that your loved ones will experience when you are deceased.

You have a few options here.

One is to simply look at what you earned last year. Use that figure to calculate the policy amount that you would need to support your loved ones during the coverage term. The second is that you could base your estimate on your highest income month and multiply that number by twelve.

Using your best month may be a more fair representation of your earning potential as numerous factors outside of your control could have contributed to a less-than-stellar earnings year.

An easier way to determine your life insurance plan is to use our insurance needs calculator. Use the sliders to adjust the amount of debt you’d like to pay off, how much income your family may need to live comfortably, and how many years that you’d like them to be protected under your policy.

Executive Summary: How to Get Term Life Insurance

We’ve answered the question what is term life insurance and showed you how to get your free (anonymous) term life insurance quotes. If you’re ready, use our term life insurance quoting tool to compare your best term life insurance quotes within minutes.


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