Why It's Even More Critical
Self-employed individuals lack the safety net of employer-provided group life insurance, disability insurance, and other benefits. If you're the sole earner and something happens to you, your family faces both the loss of your income and the loss of your business revenue.
Unlike employees who may have some group coverage as a fallback, self-employed workers have zero coverage unless they purchase it themselves.
Choosing the Right Coverage
Calculate coverage needs based on both personal and business obligations. Include personal debts, mortgage, family living expenses, children's education, AND any business debts, lease obligations, or employee commitments.
A 20 or 30-year term policy provides affordable coverage during your most productive business-building years. Consider a larger face amount than an employee might need, since you're also protecting business income.
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Get Your Free QuoteTax Considerations
If you have employees, life insurance premiums you pay on group policies for them are generally tax-deductible as a business expense. However, premiums on your personal life insurance policy are not deductible.
If your business is structured as a C-corporation and the corporation owns the policy, different rules may apply. Consult with a tax professional to optimize your coverage structure.