insurance jungle
Independence – a life with many freedoms but also risks. Anyone who works as a freelancer has to plan and organize extensively in advance. In addition to extensive financial plans, the self-employed must also ensure adequate insurance cover, whereby simple health insurance, as with an employee relationship, is no longer sufficient.
Anyone who becomes self-employed must also protect themselves against business losses or sick leave. Retirement provision is also organized in a different way for freelancers.
In order not to lose track of things, various portals and web seminars are available on the Internet. Sven Kesberger, a financial coach from Munich, also offers online classes for the Association of Founders and Self-Employed to support freelancers and entrepreneurs in this regard.
In an interview with Bento, Kesberger said: “The earlier you take out a policy, the healthier you tend to be – which lowers the premium.” Since some startups and freelancers initially lack the liquid funds to insure themselves to the full extent, some insurance companies offer expandable starter offers, which initially offer sufficient insurance protection at low costs, explains the financial coach. Freelancers should therefore deal with the subject in detail in advance and compare offers.
The following sections explain which types of insurance are essential for the self-employed and startups.
Health insurance
Health insurance is mandatory by law in Germany and therefore also essential for freelancers. The self-employed can choose freely between statutory and private health insurance.
However, this does not cap the entitlement to sick pay, which requires additional contributions to the health insurance fund. Alternatively, voluntary supplementary insurance can be taken out, which pays out sick pay in the event of short-term absences.
In order to protect yourself from long-term disability in the event of a serious illness or accidental injury, additional long-term care insurance must be taken out in advance if you have private insurance. This protection is already included in statutory health insurance.
The respective insurance costs are calculated individually depending on income, whereby a minimum and maximum contribution applies.
Private liability insurance
Unlike health insurance, there is no legal obligation for private liability insurance. Nevertheless, it is considered an essential basic insurance that pays for property damage and personal injury.
As an entrepreneur, information should be obtained as to whether and to what extent the insurance taken out already covers operational damage. Extended insurance protection can often be taken out within the liability insurance, which protects against financial losses.
The cost of this protection also depends on the profession. Lawyers and tax consultants pay a higher rate here because they can cause high monetary damage through incorrect advice. While freelance journalists, for example, have to pay small fees.
Private pension plan
Freelancers are not subject to any statutory pension scheme, so private provision is essential. While the artists’ social security fund covers professions such as master craftsmen and artists in general, private old-age provision applies to all other self-employed people.
Important: Additional pension provision is also recommended for members of the artists’ social security fund.
The costs can be determined freely, you can join a private pension insurance or be a voluntary member of the statutory pension insurance.
disability insurance
Statutory pension insurance in the form of a reduced earning capacity pension only provides limited protection against occupational disability caused by illness or accident. In order to be able to maintain a certain standard of living in such a case, taking out disability insurance helps.
The cost of this insurance depends on several variables. What risk of injury does the activity entail? What is my health condition? Age also plays a significant role here.
life insurance
The extent to which term life insurance is necessary is determined by the freelancer’s family circumstances. If a family is dependent on the income of the self-employed, term life insurance should be taken out.
Since freelancers do not pay into the statutory pension insurance, surviving spouses are also not entitled to a survivor’s pension.
Henry Ely / Editor finanzen.net
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