More and more people are working from home these days. For many, making a living in your pajamas from the comfort of your home is a dream come true, while for others, it’s the only job option available. And people working from home need life insurance, too.
It’s common for parents who work from home to think that they don’t need life insurance because of the low-risk nature of such a domestic lifestyle. However, life insurance also offers important benefits for people who work from home as well.
In this article we will talk about the growing home workforce and analyze what types of insurance are best for them and why.
Working from Home and Life Insurance: Article Contents
In the United States, there are approximately 8 million people working from home, or over 5% of the population. New technologies, a digitally-based economy, and globalization are a few of the factors that have contributed to the growing number of home-based workers.
Working from home has its advantages: you are often your own boss, and you make the rules and schedules. You save the time and money required to commute, and any other risks associated with a job, such as accidents and illness. This makes many people think that they don’t need life insurance to guarantee that their family is protected in the event something were to happen to them, but they couldn’t be more wrong.
Working from home does eliminate some risks, but not all, as we will see. In addition, you can’t rule out the possibility of getting sick or having an accident while engaging in non-work activities, such as traveling or sports. This is why you will need to protect your loved ones with a life insurance plan that will guarantee they have income in the event you are no longer around, even if you don’t leave your home to go to work everyday.
This is even more important if you have children. With the arrival of children comes the need to protect them. Consequently, this is a time when most people buy life insurance plans, and it is also a good time to plan for your family’s financial future. Part of this plan can include tools that will protect you if financial difficulties arise.
In fact, this is the main purpose of a life insurance policy: replacing income. If the person who contributes income to the family passes away, insurance provides a death benefit that is designed so that they can maintain the same standard of living until they find another source of income.
In addition, people who work from home are more vulnerable than those who have a regular job. When you work at a traditional company, it is common for you to receive a group life insurance plan as part of your benefits. They aren’t perfect, because the coverage is low, but it’s better than nothing, and best of all, it’s paid for by your employer. In other cases, especially when the work is dangerous (frequent travel, operating heavy equipment, etc.), workers themselves are more conscious of the importance of purchasing life insurance and do so on their own, even in combination with group policies.
But when working from the comfort of your own home, you lose all this. However, even if you don't leave your house for work, there are still risks (especially if you have children), and you should have life insurance.
Working from home also has some drawbacks, and some of these are related to your health and well-being. Of course, you don’t have to worry about risks that are present in many jobs, but working from home is not without its problems.
Sleep disorders. Many people who work from home aren’t able to keep regular hours like people who work in an office do. This causes them to work at odd times, sometimes even very late, which can end up causing sleep disorders that can result in neurological and even psychological problems.
Muscle problems. Home furniture isn’t designed for working long hours. It isn’t ergonomic and can cause problems that can become serious. Poor posture and uncomfortable furniture that isn’t designed to be used for extended periods of time can cause muscle pain and even bone issues. Furthermore, improper use of furniture can also cause headaches, respiratory issues, and even vertigo.
Isolation. One of the main problems people who work from home face is loneliness. Spending long periods of time alone, without interaction with coworkers, can end up causing psychological problems, depression and even more serious issues. In addition to these problems, loneliness can also make it difficult to concentrate and impact productivity, making it important to take measures to combat this.
Being sedentary and bad habits. Some scientists have identified problems related to a sedentary lifestyle among people who work from home. Physical exercise is reduced, which causes problems to arise. Sometimes, poor diet can also exacerbate the problem, and result in obesity or illnesses like cholesterol.
Technostress. Information technology-intensive work, which is common in people working from home, can cause stress, anxiety, and even addiction. These problems may not seem serious, but they can become worse or cause other syndromes.
As you can see, working from home does have risks, and though they might not be very serious, they are still present and it’s important to keep them in mind. These risks are so frequent that it’s a good idea to protect yourself with supplemental health insurance, as well as a life insurance policy that will give you the peace of mind that comes with knowing that your family’s future will be secure when you are no longer around.
Now that you understand the need to have a life insurance policy that will protect your family if you die and the income you generate by working from home disappears, it’s time to look at what type is best for you.
In general, people in this situation aren’t always earning large amounts of money. Sometimes they can have unstable income that fluctuates greatly depending on the jobs they get or the season. If this is the case for you and your income is unpredictable, the best thing to do is to choose a temporary life insurance policy.
Temporary or term life insurance is a smart way to obtain life insurance at an affordable price. They are called temporary because they have a set duration which can vary from 1 to 5, 10, 15, 20, 25 or 30 years. If the insured dies during the term the policy is in effect, their beneficiaries will receive the death benefit. However, if they die after the policy has expired, there won’t be a death benefit.
These policies are relatively inexpensive and allow you to have reasonably high coverage. In addition, they are relatively easy to obtain because the underwriting process is easy.
Many people use term life insurance because of its affordability and purchase several plans so that they overlap to ensure they always have proper coverage at a low cost. This is known as a laddering strategy. In addition, temporary life insurance can be converted into a permanent policy without having to go though the underwriting process again.
Permanent life insurance plans are more comprehensive products in general, though they are also more expensive. Because of this, they are better for people who, even though they work from home, have higher and more stable incomes.
These are very attractive policies for several reasons. First, they never expire, and remain in force until the policy holder’s death, time at which a death benefit is paid, which many times can be a considerable sum of money.
In addition to better coverage, they also offer savings accounts that use part of the money paid as premiums to invest. These investments generate income that accumulates in the form of cash value, which is money that they policy holder can spend or borrow against.
Cash value is a mechanism which is specific to these types of policies and varies depending on the type of policy you choose. There are several types, but the main types of permanent plans are ordinary or traditional life insurance, universal, variable and universal variable. The difference between these policies is the risk you assume when investing the money paid as premiums.
The biggest problem with these policies is that they are more expensive, since, as you’ve seen, they offer much higher coverage and better benefits. Consequently, insurance companies establish much more rigorous underwriting processes to obtain these policies.
Regardless of the type of insurance you choose, it’s very important to consider the amount of the death benefit you will need so that your family won’t suffer financially if something happens to you. Choosing the proper amount of coverage is key, because it will determine the success of your insurance strategy and the consequent premiums you will pay.
If you have additional questions, take advantage of the fact that you don’t have to go to an office and use the extra time to visit your insurance agent. Experts are always there to help you choose the plan that will best meet your specific needs.