Insurance for Self-employed: 7 Things You Need To Know

Insurance for Self-employed: 7 Things You Need To Know

Did you know that nearly 60 million adults in the United States are freelance workers or self-employed? The freelance community has grown over recent years as people start their own companies and provide unique services.

If you’re a part of the self-employed community, there are a few things you should understand about insurance. Keep reading to discover what you need to know about insurance for self-employed individuals!

1. Identify Your Budget

One of the first steps when finding insurance for self-employed opportunities is to identify your budget. Although your income may change, you should gather financial documents and discover your income. Most advisors recommend putting 10% of your income toward insurance policies. This could vary based on your medical needs and location.

Your age, income, and health status should be factored into insurance expenses. Use this info to determine the most suitable plan, so you don’t go into debt. It’s best to cushion your budget since unexpected medical costs can arise at any moment.

Businessman Workig and Using Calculator With Laptop on Desk

2. It’s Worth It

A significant amount of freelancers and gig workers assume health insurance isn’t worth it if you can’t get help from your employer. Unfortunately, this misconception is often wrong and puts people in more debt than they ever anticipated. If you don’t have insurance coverage, you’ll be required to pay out of pocket for services at the time of your appointment.

Although insurance costs can put a strain on daily spending, you won’t owe as much in bills. No matter what, you’ll have to pay for medical care, which is why insurance is worth the costs since it can lower your debt. Avoid putting this task off for long, so you have coverage when it matters the most.

3. Compare Prices

If you want the best insurance for self-employed individuals that’s also affordable, you need to compare prices. Price comparison websites are great for gathering info, but take them with a grain of salt. Many companies will omit their largest competitors to make their policies stand out. Gather info about each company’s pricing and payment policies to know what you’re getting yourself into.

It helps to compare at least three companies from your community, but there are larger insurance organizations to consider as well. When you speak with an insurance consultant, don’t hesitate to ask about hidden fees. Some insurance companies provide an excellent starting rate but raise it significantly within a year.

4. Consider COBRA

It’s not uncommon for people to become self-employed after getting laid off from their previous employers. If this situation applies to you, there is another Insurance for self employed option. If you qualify for COBRA coverage, you can get your insurance policy extended, even after you lose your job. A federal program helps people by temporarily extending coverage while people find new jobs.

Depending on your budget, this may be an expensive option, but it’s great for people who anticipate high medical bills. Consider your and your family’s health needs to determine if this coverage is necessary.

The great part about using COBRA is that the company already has your information, and it isn’t a long process to sign-up for. You can use COBRA while you’re handling the logistics of becoming self-employed.

5. Check Monthy Premiums

Insurance options for self-employed people often add monthly premiums to the bill after an initial period. The best way to avoid insurance costs from rising is to get a guaranteed or locked-in rate.

Health insurance agents can help you find the best deals that won’t change as the months go by. This is important since most self-employed individuals don’t have a large income in their first few years.

Health Insurance Assurnace Medical Risk Safety Concept

Depending on the company, they may lock in all of their rates. This is a sign of excellent customer service. You can check online review sites to determine which policies come with monthly premiums.

6. Deduct During Tax Season

Many types of self-employed insurance policies can get written off in your taxes. So long as you qualify as self-employed, you can deduct insurance premiums and get help with coverage. These deductions apply to you and your dependents listed within business expenses. There are some limitations, but this is a great way to find affordable coverage without going into debt.

Although you can’t deduct a greater amount than your net income, it can still help with bills. Work with your CPA or financial advisor to determine how much in deductions you can expect.

7. Research HSAs

Health savings accounts are beneficial for self-employed people since they lower insurance premiums. HSAs get used alongside health insurance plans and help maximize your savings. You can get a specified amount each month in your HSA to spend on medical bills, prescriptions, and supplies. The money gets deposited into your account based on your pre-tax income.

The great thing about this is that the unused money will go into your account and be available for future use. Most insurance companies will provide free quotes to see which policies will fit within your budget.

Find the Best Insurance for Self-Employed Jobs

When it comes to finding the best insurance for self-employed jobs, you need to consider your options. Whether it’s just you or your entire family, you can find affordable insurance policies that will fit your needs.

If you recently got laid off, you have more opportunities to get high-quality coverage with minimal expenses. Don’t be afraid to work with your financial advisor as well to discover how much can get deducted during tax season.

If you want to learn more about self-employed insurance policies and opportunities, check out our page for the latest content!

Milica Brborović
Milica Brborović
Articles: 128

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