What is Individual Health Insurance for Freelancers & Self-Employed?

Freelancers and self-employed individuals enjoy the freedom and flexibility of working on their own terms.

However, this freedom comes at a cost - freelancers pay the price of their freedom over the interrupted flow of income - some days, there is a flood of income and other days, it’s a drought.

Under such circumstances, any sudden emergencies might pose a financial strain. And when such emergencies are related to medical treatments, they are looking at a long stretch of persistent financial stress that will eat away at their life savings and put them on a financial backfoot for other expenses.

Unlike traditional employees, freelancers don’t have access to employer-sponsored health insurance plans. This makes individual health insurance all the more important if you’re a freelancer.

Heads Up: It takes an average person up to 5 hours to read & analyse a health insurance policy and 10 hours or more to compare different plans and make a decision.

This is why we propose a better alternative - taking a 30-minute FREE consultation with Ditto’s certified advisors. We have a spam-free guarantee, and we’ll never push you to buy a plan. Don’t delay this - we have limited slots every day, so book a quick call here before they run out.

Why do freelancers need Individual Health Insurance?

Freelancers need individual health insurance because they lack the safety net provided by employer-sponsored plans. This health insurance protects against high medical costs that can arise from unexpected illnesses or accidents.

Corporate health insurance policies provide their employees with a safety net. The company purchases this policy for their employees in order to ensure their well-being. However, if you’re a freelancer, you lack this essential cover because there is no company covering this for you.

What are the Benefits of Buying Health Insurance for Self-employed Individuals?

Opting for an individual health insurance policy comes with several advantages—it provides full coverage for yourself, and you can avail yourself of tax benefits under Section 80D, reducing your taxable income and securing your health. Finally, during an emergency hospitalisation, you need not worry about finances as the policy will cover the expenses, allowing you to focus on recovery.

Many health insurance plans offer preventive care services such as annual check-ups, vaccinations, and screenings, helping you as a freelancer maintain your health and detect potential issues early.

Without health insurance, a single medical emergency could result in your savings getting depleted substantially. This can be particularly devastating for freelancers, who are more likely to have fluctuating incomes.

This brings us to the question –

How can freelancers deal with Health Insurance Premiums?

When it comes to purchasing a health insurance policy, there are three main types of payment plans. Insurers offer these different modes to help people with varying financial situations manage their premiums efficiently.

1. Monthly SIPs – Paying your premium monthly allows you to spread the cost of your health insurance over the year, which means you don't have to spend a large sum upfront. However, it's important to remember that if you miss a payment, you will lose coverage. Apart from this, handling multiple payments throughout the year can become cumbersome.
2. 1-year premium payment – This is the most common payment option. It is less cumbersome since you only need to make one payment each year, reducing the likelihood of missing a payment. This option also simplifies budgeting, as you know exactly when your premium is due.
3. 2 or 3-year upfront payment – A multi-year option is ideal if you can afford to pay the premiums upfront. Insurers often offer discounts for multi-year policies, making this a cost-effective choice. However, if the insurer does not meet your expectations when you need to make a claim, you are locked into the policy for the duration of those years. That said, this option might be better suited if your income is fluctuating, allowing you to pay the premium upfront during a windfall.

Before deciding on a policy, you need to remember a few considerations. This will ensure that you pick the correct policy based on your health and financial needs.

How should freelancers choose their health insurance policy?

To choose the right health insurance policy, you should assess their needs by considering their health history and potential health risks to determine the level of coverage you need. Here are some pointers that will help you make an informed choice when selecting the right insurer and the right health insurance policy if you’re a freelancer in 2024:

1. No co-payment, room rent limits, and disease-wise sub-limits.
2. A Low pre-existing disease waiting period (PED WP) and specific illness waiting period (SI WP).
3. A good restoration bonus, pre- and post-hospitalisation cover, network hospital list, and no-claim bonus are also added advantages.
4. Apart from these features in the policy itself, you should also consider some metrics that assess how well the insurer is performing. These include the Incurred Claim Ratio (ICR) and the Claim Settlement Ratio (CSR).

What are the Common Myths about Health Insurance?

When potential policyholders who happen to be freelancers/self-employed approach our insurance advisors, they have a few standard questions they face. Most of these are common myths and rumours about health insurance plans that raise doubt in their minds as to whether the policies will be a good choice for them.

Here are the truths about a few such myths, proving why we suggest health insurance plans for freelancers -

1. “I’m Healthy, I Don’t Need Insurance”

A common misconception about health insurance is that healthy individuals don’t need insurance.

Contrary to popular belief, it is probably best to purchase a good health insurance policy when you’re perfectly healthy.  This is because your premium depends on how healthy you are. In case you have any PEDs or other chronic ailments, the insurer will charge you a higher premium.

So, it’s probably best you buy a policy when you’re younger, with no pre-existing ailments.

 2. “Insurance Is Too Expensive”

While premiums can be high in some cases, there are more affordable options available that are good. And even if a health insurance plan is expensive, think about this – if you are not covered by insurance at all, the cost of not having it can be much greater.

 3. “Insurance Companies Don’t Pay Claims”

While sometimes, there can be issues with claim settlement, choosing a reputable insurer and understanding the policy can mitigate these concerns. You can always feel free to use our policy comparison tool to get an overview of a health insurance policy’s features.

 4. “I Can’t Get Coverage with Pre-existing Conditions”

Many insurers offer coverage for pre-existing conditions. While it may come with waiting periods or higher premiums, they are covered after the waiting period is over. Sometimes, you can even purchase add-ons to reduce the waiting periods for these diseases. Most top health insurance policies offer this, ensuring people with pre-existing diseases also have adequate coverage.

Best Health Insurance Plans that a Freelancer Can Purchase in 2024

Here are some of the top health insurance policies that you can purchase in India:

Why Talk to Ditto for Your Health Insurance?

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Conclusion

Purchasing a good health insurance plan from a reputed insurer is important for both employed individuals AND freelancers/ the self-employed to safeguard their health and financial well-being.

It is crucial to compare different health insurance plans, examining coverage, premiums, deductibles, and out-of-pocket costs. It is also essential to ensure the plan includes a preferred or conveniently located network of doctors and hospitals.

By understanding your healthcare needs, comparing plans, and seeking professional advice, you can get the best health insurance policy that provides comprehensive coverage within your budget.