Welcome to the gig economy, where workers and customers come together on an as-needed basis, with services that include rides through Uber or Lyft, furniture assembly through TaskRabbit, room rentals through Airbnb and many others.
Today the gig economy employs 16% of the U.S. labor force, according to the Bureau of Labor Statistics — a 56% increase over the past decade — which is expected to grow even more.
Gigs provide great flexibility and sometimes even higher wages than traditional, full-time jobs. However, they generally don't come with any benefits. Without health insurance, sick leave or retirement benefits, gig workers need to create their own safety nets.
Here are three ways to cover yourself.
1. Health insurance is available in several ways
For many employees, access to health insurance coverage is their most prized workplace benefit, given how pricey health care has become. The average employee pays $1,213 a year for employer-sponsored coverage ($5,174 for families), says the Kaiser Family Foundation.
Because of the Affordable Care Act, gig workers have access to health insurance on either their state's exchange or the federal one. However, buying coverage through the individual market usually costs significantly more than a company plan, because there's no employer to split the cost with you.
If your earnings meet eligibility requirements, you may qualify for subsidies or cost-sharing reductions. Also, your minor children might be able to access coverage through the Children's Health Insurance Program.
Another option for finding affordable health insurance is joining a professional association, union or local chamber of commerce, which can give you access to more favorable group insurance rates.
2. Life insurance is accessible and can be affordable on your own
Employer-based life insurance is a convenient way to protect your family, usually at an affordable rate and without medical exams. And you can pay for it through a payroll deduction.
Gig workers must do more of the heavy lifting themselves.
The first thing you should do is figure out how much coverage you need. Some experts recommend buying a policy worth 10 to 15 times your annual salary. Alternatively, you can get enough coverage for all your financial obligations in the next decade or two, such as care for your children, mortgage, debt payments and college savings.
Next, decide what type of policy works best for you. Term life insurance, which stays in effect for a set number of years, is an affordable option for many.
Finally, comparison shop. Work with an insurance agent who can present you with several options from well-established, financially sound insurance companies.
3. Disability insurance is vital for sometimes dangerous gigs
Your chances of suffering a disability are higher than you may realize. A 20-year-old has a one-in-four chance of becoming disabled before reaching retirement age, according to the Social Security Administration. And gigs such as driving for a ride-hailing service or delivering meals by bike can put workers at higher risk for an accident.
Without the benefit of sick days or worker's compensation, gig workers need to figure out how to replace their incomes if they become too sick or injured to work. Emergency savings are an important bulwark against short periods of disability. But if your injury or illness keeps you out of the workplace for longer, disability insurance is the way to protect against this loss of income.
A short-term disability policy replaces your income for a couple of months up to a year. Long-term disability insurance, on the other hand, kicks in after a waiting period (usually 90 days) and replaces about 60% of your after-tax income. Depending on your policy, benefits might last a certain number of years or until retirement.
Like life insurance, the younger and healthier you are, the more affordable disability insurance is. Expect to pay between 1% and 3% of your annual income for coverage, depending on your age.
Consider joining a professional organization to access group rates. Or work with a broker to buy directly from a reputable insurer.