Why Life Insurance Is a Must-Have for the Self-Employed

Being self-employed has its perks: freedom, flexibility, and autonomy. Unfortunately, the long list of self-employment benefits doesn’t usually include an actual benefit plan, which means you’re on your own regarding insuring yourself.

If you’re self-employed and don’t own life insurance, you’re putting your family at significant financial risk. Not only would a life insurance policy provide for your family if something were to happen to you, but it would also cover the costs of your business debts.

Everyone needs life insurance.

Any financial expert will tell you that whether you’re self-employed or company-employed, you need life insurance—especially if you have a family who depends on your income. As long as you’re alive and kicking, you can continue to earn money and maintain your family’s lifestyle. However, your family may be financially ill if you die without life insurance.

Without your income, your family certainly couldn’t maintain their former lifestyle, and they may have difficulty making ends meet. They would probably struggle to pay monthly expenses, including the mortgage, credit cards, and utilities. On top of that, they could face some hefty bills associated with your death, including burial and funeral costs and medical expenses.

An effective life insurance plan will ensure that your family’s financial needs will be covered in the event of your death—from the monthly mortgage to final expenses to your child’s college education.

A necessity for the self-employed

Although everyone should have life insurance, it’s an absolute necessity for the self-employed. Why? In the eyes of the law, there is no difference between your personal and business assets, meaning that you are personally responsible for any business debts.

When the owner of a sole proprietorship dies, the business legally comes to an end. Therefore, if you were to die, any debts or losses associated with your company would become the responsibility of your estate. This could include business loans, office mortgage or lease payments, local, state, and federal taxes, lawyer and accountant fees, and any payments due to your employees, suppliers, or vendors.

Your family may have to sell off personal assets to pay off these debts and cover your business’s financial obligations. This would give them even less money to cover their ongoing financial needs.

However, with an adequate life insurance plan, your family would have enough to pay off these business debts and provide for their ongoing financial needs after your death. This is why any self-employed person must have a life insurance plan.

Meet with Brian Gruss to discuss your life insurance options. As a sole proprietor, he can assess your situation and find a plan for your unique needs.