How much life insurance do I need if I am self-employed?

How much life insurance do I need if I am self-employed?

Start with the income your household would need to replace, then add debts you would not want left behind, including a mortgage and business debts. Subtract savings and life insurance you already have. The result is an estimate, not a rule.

• Pick years of income, not a multiple from the internet. Choose how many years the household would need support. That number is yours. This page does not set it.
• Add debts in your name. Include balances you would not want left for someone else.
• Add the mortgage you would want paid. The remaining balance is the piece to count, not a guess about the house.
• Add what you want available for children. That can include school costs you intend to cover. This page does not price those costs.
• Add business debts you want covered. A loan the business still owes can belong in the estimate. A buy-sell need is separate and is covered below.
• Subtract what is already there. Savings and life insurance already in force reduce the gap. They do not erase it by themselves.

How does a buy-sell agreement fit?

A buy-sell agreement says what happens to a business if an owner dies. Life insurance is one way to fund that agreement. The agreement itself is a legal document, and this page does not write it.

• The agreement names the promise. It can say who may buy the share of an owner who dies, and where the money comes from.
• Life insurance is one way to fund it. The death benefit can be the cash the agreement expects. The policy has to be set up to match the agreement.
• A lawyer writes the agreement. This page is not that document, and it is not a substitute for legal advice.
• Business debt is a different line. A loan can be part of the income-and-debts estimate even when there is no buy-sell agreement.

Should I buy term or permanent life insurance?

Term coverage lasts for a set number of years and is often the fit when the need has an end date, such as a mortgage or the years children depend on you. Permanent coverage is built to last longer and usually costs more for the same death benefit.

• Term matches a need that ends. The life page is where term prices start.
• Permanent coverage is the longer-lasting kind. Whole life is one form of it. It is a conversation on a life call, not a price button on this page.
• Neither one is right for every household. The need decides. A business plan that does not end can point toward permanent coverage. A 20-year mortgage often points toward term.
• The carrier decides whether to offer either one. A quote is not an approval.

Can I apply without a medical exam?

Many people can apply with health questions and without a medical exam. That depends on your age, your health, and the amount. The carrier can still require an exam, and applying is not an approval.

• No exam is possible. It is not guaranteed. Age, health, and the amount all matter. A larger amount is more likely to need an exam.
• Health questions can still be required. Skipping the exam does not mean the carrier skips underwriting. It can ask for records.
• Seth will tell you what to expect before you apply. How buying works describes that step. A life call is the right place for your own application.

Where do I compare a term price?

Term prices start on the life page. A life call is the place to size the amount and to ask about whole life. The quote tool does not replace that conversation.

• The quote tool is the second step. Use it when you already have an amount and a term in mind. See term life prices.
• The call is the first step when the amount is unclear. Bring the income years, the debts, the mortgage, and any buy-sell note. Seth will size it with you.
• Not every product is in the quote tool. Some life policies need a conversation before a price exists.

Seth helps clients in Texas, Florida, Georgia, Tennessee, North Carolina, South Carolina, Virginia, West Virginia, Pennsylvania, Kentucky, Ohio, Colorado, Indiana, Illinois, Arkansas, and Louisiana. Not every policy is available in every state.