The way people work has drastically changed over the past few years, and countless businesses have made remote working a standard practice. However, with a growing number of working folks embracing the benefits and flexibility that come along with remote work (or at least telecommuting), it’s increasingly important to reevaluate some traditional financial planning items–life insurance needs in particular. Remote working comes with both its challenges and opportunities for remote workers — many of which will affect how they view life insurance. In this article, we delve into how life insurance can protect your family if you are an out-of-office employee primarily or entirely working remotely and what to consider when advising on coverage.
The Rise of Remote Work and Its Impact on Financial Planning
Remote work has changed millions of lives for the better, transforming how people balance their professional goals with personal fulfillment. Savvy professionals can now do work from their home which not only gives them control over the balance between their professional and personal lives but also helps in saving on some real dollars that would otherwise be spent commuting to the office. This also means that your finances may require some new approaches in light of the move — particularly when it comes to life insurance.
Why Life Insurance Matters for Remote Workers
Life insurance is an important financial cushion that gets you and your loved ones more secure. For those who are working from home the need for life insurance today is likely significantly magnified due to a few key reasons:
Unpredictable Income: Whether or not they are freelancers/contractors, remote workers may have a variable income. If a recession were to hit and you, unfortunately, passed away during that period, life insurance could help ensure your family is covered should it end up being one of the leanest times.
Outside of Employer-Provided Benefits: Most traditional office jobs come with employer-sponsored life insurance policies. After all, remote workers in general —including the self-employed— may not have employer-sponsored health insurance to begin with.
Meeting with Your Specific Global Mobility: Remote work will generally lead to mobility of some kind, more than just people working from home in different cities. If you’re working somewhere else or abroad then you need a policy of life insurance that provides the opportunity to get covered regardless of what country and place.
Health risks: Working from home can lead to sedentary behavior and loneliness thus limiting the positive effects that face-to-face communication may have on our physical and mental health. Here are a couple of factors that can impact your life insurance needs and rates.
Assessing Your Life Insurance Needs as a Remote Worker
Things You Need to Consider To Figure Out How Much and What Type of Life Insurance is Right for You in TH Anonymous
1. Income Replacement
The number crunch: How much your family would need to keep living life normally if you can no longer bring in a Breadwinning income? Consider:
Your average annual income
The total number of years you would like income replacement to last
All future expected earnings increases
2. Liabilities and obligations
Gauge what you currently owe down and terms, including:
Mortgage or rent payments
Car loans
Credit card debt
Student loans
If your business is positioning people to work from home for an extended time, you should consider a range of fresh types of business loans.
3. Future Expenses
You may want to take into account some upcoming costs that you and your family might face.
Children’s education expenses
Savings of your spouse in retirement
Healthcare costs
4. Existing Assets and Savings
Assess the Amount of Your Savingstreams
Savings accounts
Investment portfolios
Retirement accounts
Life Insurance policies that are already in existence
Types of Life Insurance for Remote Workers
GET A LIFE TM has a variety of life insurance policies available to remote workers
Term Life Insurance
Term life insurance is coverage that lasts for a specified amount of time, usually 10, 20, or 30 years. More often than not, it’s the cheapest choice out there and is a superb option if you are working remotely from everywhere!
Need to meet short-term financial commitments (mortgage, children’s education)
Limited coverage, but need something cost-effective
Limited period coverage (up to retirement, etc)
Whole Life Insurance
Whole life insurance — This type of policy covers your entire lifetime and has an investment component (the cash value) that develops over time. For remote employees, it could be a good option when:
Want lifetime coverage
Want an Investment-Linked Policy
Adequate to the care…Long-term dependents (child with disabilities or incapacitated dependent…)
Universal Life Insurance
This universal life provides more flexibility concerning premiums and benefits in case of death. Why it can be a good pick for remote workers:
Varying income levels
Variables that Impact your Life Insurance Needs at different stages of life.
Coverage for lifetime and as well accumulation of cash value
Special Considerations for Remote Workers
International Coverage
If your new way of remote work includes regular travel or going to live abroad, check whether your life insurance is international. Certain countries are restricted or have exclusions to certain policies.
Health and Lifestyle Factors
Working remotely can affect you in many ways, your health and lifestyle being one of them. As you go through the process of applying for life insurance, expect to answer questions about how and when your work is done — whether it be piloting a drone or hopping on calls with clients in different time zones—how much exercise you get each week while working from home, and any health risks that may come along as a result.
Business Considerations
Self-employed remote workers or small business owners — Would you need an extra layer of coverage to protect your business interests, or to secure buy/sell funding?
Steps to Secure the Right Life Insurance Policy
Determine Your Needs: Based on the elements listed above compute your life insurance needs.
Research and Weigh Policy Components You may want to be able to compare the table above with three different tables based on what policies are available from which providers.
Compare the Market: Just like you would with any other insurance policy, look around at different insurers to make sure your rates are competitive.
Discuss With An Expert: Reach out to a financial planner or insurance broker who deals with remote workers — person-to-person clarification may eliminate some doubts.
We Check and Update Frequently — As your remote work situation shifts, but also as life evolves always consult to be sure life insurance remains sufficient.
Conclusion
For remote workers, navigating and satisfying life insurance requirements is simply another thing in your financial strategy. Evaluate your circumstances and policy choices carefully, with a commitment to have high-level conversations about coverage as you navigate this journey of remote work. And, of course, you remind yourself of the downside that is: sure remote work is nice but this flexibility comes with a sacrifice — as someone who has to build their financial safety net and life insurance plans.