Being self-employed definitely has its perks: Freedom, flexibility, autonomy. Unfortunately, the long list of self-employment benefits doesn’t usually include an actual benefit plan. That means you’re on your own when it comes to insuring yourself.
If you’re self-employed and don’t own Life insurance, you’re putting your family at great 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, if you were to die without Life insurance, your family could find themselves in a financial crisis.
Without your income, your family certainly wouldn’t be able to maintain their former lifestyle, and they might have a hard time 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 all of 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. That means that you are personally responsible for any and all business debts.
When the owner of a sole proprietorship dies, the business legally comes to an end. Therefore, if you were to die, any of the debts or losses associated with your business will become the responsibility of your estate. This could include business loans, your office mortgage or lease payments, local, state and federal taxes, lawyer and accountant fees and any payments due to your employees, suppliers or vendors.
To pay off these debts and cover your business’ financial obligations, your family might have to sell off personal assets. This would leave them with even less money to cover their ongoing financial needs.
However, with an effective 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 it’s crucial for any self-employed person to have a Life insurance plan.
Meet with one of our financial professionals to discuss your Life insurance options. We can assess your situation and find a plan that fits your unique needs as a sole proprietor.