Freelancers can’t count on the same steady paycheck and benefits as workers at large companies. With fewer benefits, it is important that solo workers and startup leaders keep more cash in the bank for emergencies than regular folks, but emergency savings is only one part of the equation. Protecting yourself and your family from a sudden loss of income is as important for freelancers as anyone else. But with no work-sponsored insurance options, it is up to you to protect yourself and your family.

Health insurance

Start your process to protect yourself and your family with health insurance. There are many benefits to health insurance, including avoiding the tax penalty for not having health coverage in the Affordable Care Act. More importantly, however, is the financial and health benefit of insurance. While everyone thinks, “it will never happen to me,” injuries and severe illnesses happen all the time to unsuspecting people, including entrepreneurs like you.

If you were to get seriously hurt or come down with a fatal disease like cancer or HIV, health insurance could be the only thing standing between you and bankruptcy. The average heart attack leads to a $20,000 hospital bill. A study by Consumer Reports found that bankruptcies fell about 50 percent since the Affordable Care Act began requiring all Americans have health insurance. The link between financial security and healthcare is clear, don’t roll the dice and put your health or your business in jeopardy.

Life insurance

What would your family’s life look like if your income were to suddenly disappear. While no one likes to think about dying, the fact of the matter is that people do pass away before their time. While good healthcare and a health and safety conscious lifestyle help avoid worst-case scenarios, protecting your family with a quality life insurance policy is a must for any business owner.

Mortgage or rent, groceries, day care, and other living necessities are covered by a life insurance payout. Depending on your family’s needs and goals, you may want a bigger policy that covers the cost of college tuition for your kids and other expensive life milestones. Whatever you do, don’t leave your family’s well being to chance. A high value term-life insurance policy is cheaper than most people realize, and this relatively small expense will guarantee your loved ones are okay even if you are not around. I personally have a $1 million term policy for my family.

Disability insurance

Death is not the only bad thing that can happen to us. What if you were injured or ill and could not go back to work for a few weeks, a few months, a few years, or longer? As long as you are alive, life insurance won’t pay a cent. Health insurance may pay your medical bills, but it won’t make up for lost income if you are laid up in bed or unable to work. Disability insurance, in two flavors, fills this insurance gap.

Short-term disability insurance covers you for up to around one year after your disability begins, depending on the policy. When that expires, long-term disability takes over and can make payments for years up to a lifetime, again depending on the policy details. No matter what causes a disability, it is important to have a combination of both short-term and long-term coverage to ensure your family doesn’t go broke after a car accident, sports injury, or illness.

Long-term care insurance

Enough with doom and gloom for now. There is another trend, a good one, that leads us to need a fourth type of insurance. Because we are generally living longer than ever, we are running into new lifestyle challenges that didn’t exist decades ago. More Americans are moving into nursing homes, assisted living facilities, or require home care than did in the past. When your knees go bad and your back hurts, who is going to help you with things like laundry, dishes, and even getting to the shower and back?

Long-term care insurance covers some or all of the cost of life assistance outside of medical care should you require it in the future. Whether it is due to a disease like cancer, a memory condition like Alzheimer’s, or just age catching up to you, there is no bad time to have long-term care insurance. Like life insurance, it gets more expensive as you age and is cheapest if you can lock it in right away.

Protect yourself and those you care about

There are no affiliate links or promotions in this article, just some facts and statistics to get you thinking about how to ensure your insurance is enough. As much as us entrepreneurs want to think we are invincible, bad things happen. Make sure you don’t get stuck with bills you can’t afford or worse by protecting yourself with the right insurance for your needs.

Eric Rosenberg

Eric Rosenberg is a finance, travel, and technology writer originally from Denver, Colorado living in Ventura, California. When away from the keyboard, Eric he enjoys exploring the world, flying small airplanes, discovering new craft beers, and spending time with his wife and baby girl. You can connect with him at his own finance blog Personal Profitability.

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