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With the advent of technology, the startup revolution and the ease of starting our own businesses, the rate of self-employment globally has increased substantially. This coupled with the casual employment industry in the country means that about half of India’s 473 million workers (51%) are self-employed. While there are countless advantages of being self-employed, including independence, potential to grow, higher incomes amongst others, there are also several challenges of the same.

As a self-employed individual, you have to ensure that you make your own investments, buy health and life cover. And the last point cannot be emphasized enough. No matter the nature of life insurance plan: an online/offline term plan, a ULIP, an endowment or a money-back policy or retirement savings plan. Some of your loved ones in case of your demise, others provide a large lump sum. However, regardless of which one you choose, one of these must be in your portfolio. 

What cover should you get? To understand this, you need to first understand what kind of investor you are. If you want to buy a life insurance cover without worrying about keeping track of any investment and just want to ensure that in case something happens to you, your dependents have financial stability, a pure term plan will work fine for you. In that case, however, make sure you pay your premium annually. This way, even if your income takes a hit for a few months, it won’t be an issue as you can make up for it in the next few months. Also, this way you will know when you are due and it will help you plan in advance. 

But what about the size of the cover when buying a term plan? Mostly, people are advised to buy a term plan ten times their annual income but since this may not apply to you. This way, you can always scale up your coverage once your current income goes beyond your current income goes beyond that. And to save costs, buy the plan online so that premium payment can also be made from a credit card in case of emergencies. 

But if you want to ensure that you have a retirement corpus ready or in other words, a guaranteed income, then you can also consider buying a retirement-specific investment cum insurance plans. In the case of ULIPs, single-premium endowments can be considered. In this case, you simply pay the entire premium for the policy in one lump sum and thereby can enjoy guaranteed income when the policy matures. These policies are well suited for people who have irregular sources of income. Remember, in the case of regular premium policies all your benefits will lapse if you miss even a single premium. You may also opt for a ULIP with a single premium option where the maturity proceeds will link with the performance of the chosen fund.  

Similarly, you can also buy annuity plans where you just need to pay once to enjoy a lifetime of benefits. 

When you are self-employed, you need a life insurance plan but also need them to be valid for as long as possible. Single premium policies can be of great advantage in this regard and help you greatly in your initial years. Whichever direction you choose, consider planning for life insurance at an early stage, and making it a key part of your financial portfolio.

Disclaimer: 
The aforesaid article presents the view or an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ before making any decision.

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