Life Insurance for Freelancers and Remote Workers with Unstable Income Flows
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Every organization provides some sort of social security benefit, like health insurance, to their permanent employees. Freelancers are not permanent employees of a company. They are mostly part-time resources for the company. Therefore, they are not entitled to any social security benefits or insurance policies. Similarly, remote workers who are not on the permanent payroll of the company are also not given any insurance benefits. It makes it all the more important for them to have a personal insurance policy. In this article, we will understand the importance of a personal life insurance policy for freelancers or remote workers. We will also discuss the types of life insurance they can opt for and how they can choose the right life insurance policy for them.
Before moving ahead, you should know that a life insurance policy is like a protective shield for you or your family, which acts as financial support for the family in case of the untimely demise of the insured person.
Why do Remote Workers and Freelancers Need Life Insurance?
The challenge of irregular and unstable income makes it important for freelancers or remote workers to opt for a life insurance plan. Below are some of the key reasons to understand the need of life insurance for freelancers and remote workers in detail:
- Financial Security Amid Unstable Income: Freelancers and remote workers usually do not have a stable income source. Having a life insurance policy can provide a financial safety net to their family dependents in case of a sudden loss of income due to the sudden death of the policyholder.
- Peace of Mind: Having a life insurance policy that suits you and your family’s needs gives you peace of mind. God forbid, if any mishap happens to you, a life insurance cover will ensure that your family will not have to face financial crises in an already stressful situation.
- Income Tax Benefits: If your income is taxable, you can always take advantage of tax savings under Section 80c of the Income Tax Act of 1961. This will help you save your hard-earned money. The death benefits are also usually tax-free for the beneficiaries.
- Debt Repayment: Many people take loans to meet their urgent financial needs. If you are also paying any loan, then you may think about repaying it as soon as possible so that you are free from the debt and can plan for future savings. But this burden of repayment of debt can fall on your family members in case of your sudden death. A life insurance policy can act as a protection during those times, and your family members will not have to face any financial trouble in that situation.
- Future Savings: Freelancers usually do not get a retirement fund. Life insurance policies like whole life insurance save cash over time, and this cash you can get in times of your retirement from work.
Types of Life Insurance Plans Suitable for Freelancers and Remote Workers
Though there are a number of insurance plans for freelancers available in the market, below are some of the most popular plans that freelancers or remote workers can consider.
- Whole Life Insurance Plan: This plan, as the name indicates, provides you with life cover for your whole life up to 99 years. It offers death benefits to the nominees of the policyholder in case of his or her demise. A whole life insurance plan comes with different variations, from which you can choose the one that suits you best.
- Term Life Insurance Plan: This is the type of insurance plan you can choose if you feel that your dependents will need your financial help only for a limited period of time. For instance, your children will eventually grow up and may not be financially dependent on you. Term insurance provides you with coverage for a specific period of time. It is generally an affordable option for many people.
- Universal Life Insurance Plan: This type of life insurance is permanent and gives you better flexibility in choosing premium payments and death benefits. It can be more expensive, but it gives you the chance to adjust your premium payments as per your changing financial circumstances.
How to Choose the Right Life Insurance Policy?
The decision to buy a life insurance plan is not enough; you should know what will work best for you before making a final deal. This helps you avoid any issues with your policy. You should always do thorough research or get an advisor’s help if you need it before you buy an insurance policy for yourself. Here are some of the factors that you can consider before making a policy purchase:
- Analyze Your Financial Needs: Before buying an insurance policy, you should always check your financial needs. Consider the needs of your dependents, any debt, or future requirements, if you have any. This will help you choose the best policy for you and your family.
- Check Your Budget: Since freelancers and remote workers may have to face an irregular flow of income, every policy may not fit as per your situation. Strike a balance between your needs and affordability while opting for an insurance policy.
- Choose Flexible Options: Life insurance policies in present times come with a lot of optional benefits, like policy riders. Buying a flexible life insurance policy, which gives you a window for future modifications, can help you make any changes as per your changing needs. You can always enhance your policy benefits by choosing riders.
- Ask a Financial Advisor: If you are not sure about which policy you should finalize, you can always seek the help of a financial advisor. They are experts in this domain and can guide you as per your needs and situation. Instead of taking a rushed decision, it is better to take advice and then move forward.
Conclusion
Considering the reality that freelancers often face the problem of irregular income, it is important for them to think about the need for insurance coverage for them and their family’s financial security. This not only gives you peace of mind but also gives a sense of support to your dependents, who at least will not have to struggle with the expenses in your absence. You should act wisely and choose the best option that makes you feel confident about your family’s financial protection in case of any emergency.
Stay safe, stay protected!
In case you have more queries related to the kind of life insurance that will work for you, you can connect with an InsuranceDekho advisor at +91-7551196989 or email us at support@insurancedekho.com
