The Advisory Career

Advising The Freelancer, GIG Worker And Aspiring Entrepreneur

So often, there are important financial protections that employees simply take for granted

How Saturday Insurance Agency is attempting to redefining the experience of buying insurance. Visit here to learn more.

As many employees leave the corporate workforce to embark on freelance careers or start businesses as entrepreneurs (voluntarily or not), many are unaware that certain financial protections can no longer be taken for granted. While there can be tremendous financial and emotional benefits, there is a downside to going it without a traditional employer and the safety net that provides.

According to recent federal self-employment statistics nearly 27 million Americans left full time jobs since 2017, bringing the total number of self-employed individuals to 42 million in the U.S. alone, 33% of the workforce. Global consulting firm McKinsey found that there are roughly 68 million freelancers in the US. Think about that for a second, the gig economy (Uber, Lyft, Doordash, etc.) has revolutionized freelancing for 1/5 of America and it’s only going to grow larger. Many of these individuals are over the age of 50 and have families.

Most know that they will have to find their own health insurance – an expensive proposition in and of itself – but what can be additionally daunting is the loss of disability insurance, retirement savings vehicles like pensions and 401Ks, and life insurance.

Self Employment – Not For The Faint Of Heart

“Going out on one’s own to make a living is not for the faint of heart. While it can be incredibly lucrative and fulfilling, it can also involve a lot of risk,” said Dennis Ho, CEO of Saturday Insurance, which specializes in products for the entrepreneur market. “Business owners and freelancers who rely on their own enterprises for income should minimize further risk by protecting themselves and their families with the right insurance coverage.”

Ho provides the following tips for those considering the entrepreneurial route:

Don’t forget about your retirement
Health, disability and life insurance are usually top of mind but don’t forget about replacing that 401(k) and employer match you had at work. Even delaying just a few years could cost you thousands of dollars at retirement because of lost interest and tax deferrals.

Plan as early as possible
In some cases, getting outside insurance is easier while you’re still a corporate employee. Planning early will give you the most options to choose from and the best pricing.

Health, disability and life insurance are usually top of mind but don't forget about replacing that 401(k) and employer match you had at work...

Be wary of “portable” options at work
Sometimes the insurer you had at work will let you convert your work coverage to your own policy that you can take with you. It’s worth considering, but don’t assume it’s the cheapest option. Often, these options are more expensive than what you can get on your own, so it pays to shop around.

Explore options through your associations
Depending on your line of work, associations that you belong to may offer discounts on coverage. Make sure to explore these options to see if the coverage is cheaper and/or easier to obtain.

Lastly, work with an independent expert. Everyone’s situation is different, so you want someone who can customize coverage for your needs and help you shop multiple insurers for the best price.

Planning Is Paramount

“Planning is paramount,” said Ho. “Entrepreneurs may have the greatest ideas and a ton of energy, but anyone can be derailed by the unexpected. It is ill-advised to neglect to put the proper protections into place.”

 

 

Dennis Ho is Co-Founder and Chief Executive of Saturday Insurance. Prior to co-founding Saturday, Dennis spent 20 years in the insurance industry in a variety of roles at MetLife, Deutsche Bank, and BlackRock. Dennis is a Fellow of the Society of Actuaries and a CFA Charterholder. Originally from Winnipeg, Canada, Dennis now resides in New Jersey with his wife and three young kids.

Saturday Insurance is a licensed, independent insurance agency founded by long-time insurance executives, Ho and his partner, Chris Cheng, based on their passionate belief that having the right insurance helps people live happier lives. Their mission is to make insurance simple, transparent and affordable for all. They designed the Saturday Insurance experience to be different, with no commissioned agents, transparency throughout the purchase process, and personalized, unbiased advice from experts. It is a modern, independent agency that is redefining the experience of choosing the right protection for one’s family. Saturday Insurance is licensed in all 50 states and the District of Columbia. Visit Saturday Insurance here.