Contractors get paid when the job runs. Families get paid either way.

At a glance

Common setup

1099, owner-operator of a small crew, or a one-person shop

Employer plan

Often none. You are the benefits department.

What to size

Take-home income, family, housing, equipment or crew obligations

Business coverage

A separate conversation if someone else depends on the company, not only the household

There is no HR trailer on a 1099 job

W-2 construction still has gaps. Contractors often have a bigger one: no group life, no HR packet, and a bank account that moves with draws and change orders. Life insurance for contractors is not a perk you forgot to elect. It is coverage you own, if you choose to apply and a carrier issues it.

Lily helps you write down who is counting on the draws and what the house needs if the bids stop for good. A licensed professional handles the quote. AskLily is not a carrier.

The next bid is not a guarantee — and neither is a policy

Contractors already know a verbal award can fall through. Treat insurance the same way. An application can be rated, postponed, or declined. Premiums are set by the issuing company after underwriting. This page does not promise coverage, a price, or how long underwriting takes.

Life insurance that protects a business

Key-person coverage pays the business when an owner or essential employee dies. Buy-sell agreements funded with life insurance give surviving owners the cash to buy the deceased owner’s share from the family. Term is common for buy-sell during working years; permanent policies are used when the agreement is meant to last past retirement or to build value. The business, not the family, is usually owner and beneficiary of these policies.

Coverage that is tied to the job can leave with the job

Group life through a contractor, a union hall, or a benefits package is often a set multiple of wages, and it commonly ends or shrinks when you are laid off, switch books, or go out on your own. A personally owned policy is issued to you. Subject to its own terms, it can stay in force between gigs if premiums are paid. That is not a promise that every product works this way, or that you will be approved.

Household first, then the company

If the family depends on you, start there. If a partner, a small crew, or a lender also depends on the company, a licensed professional may talk through key-person or buy-sell ideas. Those are different contracts from a personal policy. Do not mix them up on a form without someone licensed walking through ownership and beneficiaries.