Increasingly Americans are viewing self-employment as a work solution to meet their financial needs, their family life needs or both. However one of the most commonly cited concerns about self-employment is insurance. If you are, or are considering becoming, self-employed, what insurance options are available to you? How can you obtain personal health, life and liability insurance – the three most common forms of insurance typically offered by employers that you may be without now that you are self-employed? Let’s look at what to consider when purchasing health, life and liability insurance for yourself and/or your family as a self-employed individual:

Health insurance
Health insurance may be the highest priority – and biggest area of concern – for people who want to become, or are, self-employed. Because health insurance is linked to employment in U.S. it becomes necessary for people who are self-employed to find their own insurance. Take heart, however. It may not be as difficult as you anticipate if you are willing to do a little homework. You may be able to maintain coverage that you had with your previous employer; obtain coverage through a working spouse’s policy; buy into a group policy through membership in a professional association or buy an individual policy. Click here to learn more about your health insurance options as a self-employed individual and how to purchase insurance on your own.

Life insurance
Many employers offer some form of life insurance as a company benefit to their employees. But where can you get life insurance if you are working for yourself? Life insurance can be an important part of your overall financial protection plan – to protect your finances and ensure income for your family and dependents in the event of your death. Like health insurance, you can also purchase life insurance on your own. Click here to learn more about what financial protection life insurance provides and how to shop for the right policy on your own.

Personal Liability
Liability insurance provides financial coverage to pay for medical expenses, legal fees and other related costs when someone is injured on your property (for example: a neighbor slips and falls on your front doorstep) or something is damaged when on your property (for example: a friend’s car is hit by a falling branch from a tree in your yard), or when you personally cause damage to something or someone (such as you hit a golf ball through your neighbor’s window). While you likely have some degree of liability protection through your car insurance and/or homeowners/renters insurance, you may want to consider additional protection. Depending on the policy you choose, liability protection can also extend to cover incidents that occur away from your property. If you are involved in a high-risk form of recreational, volunteer, self-employment or contract work (i.e. fire-fighting, tree limb removal and logging, off-shore oil rig work, private security contracting, etc.) you may want to explore personal liability insurance to protect your financial assets in the event that a job-related accident creates a medical or legal situation for yourself or someone else—something that is not covered by other insurance you may have.

Paying for Your Own Insurance
Remember that you will need to factor your insurance costs into your business plan so that you bring in enough income to cover the amount for the coverage. Unlike when you worked for an employer and that person/company paid the cost of your insurance, you are now responsible for paying for it on your own. Once you have identified policies that provide the coverage you require or would like, add up the premium amount for each policy to get the total amount of money you will need to pay each year for your individual insurance policies. Then divide that number by 12. That will give you the total monthly amount of money you will need to earn just to pay for your personal insurance premiums. Include that number in your business plans so that at the end of the year you don’t come up short when the insurance premium bills are due!

To read more about personal insurance options click here to visit our Insurance 101 section.