Open Enrollment: What Freelancers Need to Know About Life Insurance

Open enrollment season can be a confusing time for people in the workforce. If you’re a freelancer, you might think you have to pay high premiums or forego traditional employment benefits like health insurance and life insurance because it’s not offered through your work. That might have been true in the past, but with more and more Americans replacing the traditional "9-5" job with a collection of freelance gigs and side hustles, there are more ways to get insurance benefits that fit a flexible lifestyle.

Now is a great time for freelancers to explore their options when it comes to insurance. Technology has allowed for new modernized options that provide the same protection of traditional benefits providers, while removing the friction in the process that often causes people to avoid getting the coverage they need. Like our partners at Stride Health - a company redefining the way independent workers access quality, accessible health care. Together, we’re helping to equip the self-employed (and beyond) with the coverage they need through fast, flexible and affordable options.

Most everyone knows health care coverage is a necessity, but there are a lot of misconceptions and questions around life insurance policies. Who needs life insurance? How do you get covered and what’s the right amount of coverage? Full-time workers are often automatically enrolled in group life insurance policies (although, they often don’t provide sufficient coverage). But for freelancers, it requires more planning.

You might think getting life insurance means getting locked into a life-long policy with pricey premiums and confusing coverage terms most of us don’t understand. Our mission at Ethos is to use technology to simplify and modernize life insurance products and offer coverage that better aligns with people’s needs today. We know there’s a lot to consider as a freelancer when you’re determining your financial priorities and considering the benefits you need to cover yourself and your family.

So, before you skip over of this important financial decision, let’s talk about life insurance.

Ahead of open enrollment this year, we’ve broken down the top 5 myths and common misconceptions about life insurance:

• Myth #1: I’m Set — My Partner Has Employer-Backed Life Insurance. Even if your partner has life insurance through their employer, it’s likely they’ll lose it when they leave. Employer-sponsored life insurance—commonly known as group life insurance—isn’t portable. And while your partner may be able to convert their policy, it usually means increased costs as life insurance gets more expensive as you age. Additionally, group life coverage is a fraction of what people actually need—often barely even covering funeral costs.
• Myth #2: Only The Breadwinner Needs Life Insurance. Life happens, and you can never be too prepared. Each spouse should have their own policy, whether they are working or not. To ensure each spouse is taken care of should anything happen to the other, each person in the marriage needs to have enough coverage to cover funeral and burial expenses, future income, debt repayment, and the educational needs of any children you support. It’s a lot to consider, but we have some helpful guidance for spouses, here.
• Myth #3: I’m Young And Healthy — I Don’t Need Life Insurance. Life insurance actually makes THE MOST sense when you’re young since premiums are less expensive and you have fewer assets to pass on. Life insurance will never be more affordable than it is right now.
• Myth #4: Life Insurance Is Too Permanent. There are actually several kinds of life insurance, it’s just about picking the kind that best fits you and your family. For example, permanent life insurance can be an expensive cost to take on, so many people turn to term policies (like what we offer at Ethos). Term is the simplest, most affordable and easiest to understand - most policies are just a few dollars per month and covers you and your loved ones for a period of time. Learn more about these options, here.
• Myth #5: It’s Time-Consuming And Expensive. Getting a life insurance policy through Ethos is fast, easy and inexpensive, with most people applying and qualifying for a policy after a 10-minute application versus the ten weeks it takes through a more traditional process. Using technology to expedite the process and lower costs for the buyer, our platform is ideal for the agile freelance worker.

Truth: Life insurance is a critical part of your financial planning, and Ethos makes it easy.

We are happy to work with Stride Health to help bring better options to more freelancers this benefits season.