Last Updated: May 14, 2020 With the job market continuously changing at a rapid pace, one thing has been a total trend — The Gig Economy. Millions of workers, from freelance writers and graphic designers to rideshare drivers and food delivery couriers have turned to gig work as their backbone for income. While independent work provides flexibility and autonomy, it also has its challenges — with financial planning and protection being the most critical.

Yet, life insurance is one financial security net that gig workers frequently miss. In contrast to staff in conventional roles who may benefit from life insurance coverage provided by employers, gig workers are forced to navigate this difficult terrain on their own. Read on to learn about why life insurance is important for gig economy workers, and get some tips for finding the best policy.

A Guide to Life Insurance for Gig Workers

Basic Income: As I mentioned, from the perspective of their families many gig workers must pay to work otherwise they are no longer able to support themselves. Life insurance acts as a safety net, enabling financial security for dependents in case the worker dies prematurely.

Debt Coverage – Gig workers may be carrying personal or business-related debts. If you have outstanding debts, life insurance can be used to pay off these obligations so as not to place the burden on loved ones.

Funeral and Burial Costs: Funerals can be expensive, leaving a significant financial burden on your family. This typically covers final expenses and spares loved ones from suffering financially due to unexpected death.

Business Continuation: If you are a gig worker who has created your type of presence, then life insurance funds can be set aside for either the continuation of the business or closure upon demise.

Kinds of Life Insurancechunks_OCCURRED

Term Life Insurance: An affordable choice that covers your plan for a set period (e.g. 10, 20, or 30 years). It can be valuable if you require coverage during the years when your salary is higher or until certain financial obligations are satisfied.

Whole Life Insurance: This type is a permanent policy that will stay in effect for your entire lifetime, and has an accruable cash value. Although costlier than term insurance, it can be a good suitable for those looking for lifelong defense and an included savings lorry.

Universal life insurance: Another permanent type of economy, the universal type has a more flexible value and premium at death. Whole life insurance also provides a cash value feature that may increase based on the performance of financial markets.

What to include in your policy

Sum Insured: Look at your current income, debts, and future financial commitments. The standard advice is to have coverage that amounts between 10-15x of your annual income.

Length of Policy: With term insurance, consider how many years you need coverage. Maybe it’s until your kids are out of the house or you pay off your mortgage.

Cost: For gig workers who may have fluctuating incomes, it is vital to pick a plan with regular premiums you can maintain.

Policyholders Health: If you have issues with your health, it can be a factor in your insurance rates. There are policies with medical exams and others without them (such as simplified underwriting).

Company Reputation: Look up how various insurance providers are doing financially and their customer service ratings before choosing one.

Life Insurance Tips for Gig Workers

Buy In Young: When you buy a policy while younger and healthier, your premiums are usually much cheaper.

Go hybrid: A term-personal combo might work best for certain gig workers who have diverse needs.

Reevaluate Annually: Look over your coverage periodically as you continue to gig and adjust if needed for changes in income.

You might be better off working with an independent insurance agent who can shop rates from several companies and find the best policy/coverage fit for you.

Check on Riders — Policy riders can offer new and useful features, such as accelerated death benefits or allowing convertible term policies to be converted into whole life.

Be Truthful: If you decide to apply for insurance, always tell the truth about your health status, occupation, and lifestyle. Representing that one thing has happened when it is not can result in claim denial.

Conclusion

If you’re a gig economy worker, then the challenges of figuring out your life insurance options may seem overwhelming at first but are vital to help ensure that you have considered all measures needed for protecting yourself and your loved ones. Learn what sort of policies exist, think about your needs (everyone is different), and shop around for the best deals that will give you life peace without placing an undue financial burden.

Keep in mind: if the gig economy gives you freedom, it will also take away from your planfulness. It is an important component of the planning process because life insurance guarantees that, if something happens to you so suddenly, your spirit and effort still have value for the people around you.

Feel free to explore, take the necessary steps, and work on a proper life insurance decision for yourself. Future You — and those you are closest to will thank you for it.