Which Type of Health Insurance Plan Is Best for Freelancers?

How liberating it sounds to work on your own terms and earn accordingly. Given the current scenario of paradigm shift in the job culture, more and more people are shifting towards finding jobs where they get to work at their own pace. Most of them choose to be freelancers, working for a boss, but never really being in the system to bear the entire grunt of the workload. Even though it sounds quite appealing, there is a flip side to working as a freelancer. The biggest of them is that you will not be able to avail any company benefits, including health insurance coverage. 

The realisation will only come at the time you fall sick, are in the middle of a medical crisis, or the hospital bill looks like a long list, not quite adding up to the salary you draw. There is no safe space for the freelancers to fall back on. That is why it becomes important for them to make a timely and wise decision and buy a health insurance plan that is bound to cover all their medical expenses in times of emergencies. 

Why Do Freelancers Need Health Insurance?

As discussed, even though freelancing comes with ample freedom, it strips away the safety net offered to most of the employees, including health insurance, on which they completely rely. When you are an employee with a fixed salary with the company, they take care of you through their group coverage plans. For a freelancer, you are always on your own. One hospital visit these days can cost you anywhere between 40,000 to lakhs, easily wiping out years of hard-earned money. There are four major reasons why a freelancer needs to buy a individual health insurance plan. 

• Guard Your Finances: As a freelancer, where your income can waver, there is always a high chance of your savings getting dried up during unforeseen medical events. It is thus best to get health insurance coverage right at the beginning, so that it can act as a safety net in dire times. This will also help to prevent you from getting drowned in debt and loans with high interest rates. 
• Ensures Premium Health Care Access: The health insurance plan you buy is a precursor to getting the best health care facilities available. It also helps you to process the claims through cashless means, which is sure to protect your savings. Along with it, it also helps to choose the best hospitals and doctors with great proficiency. 
• Guards Against Medical Inflation: Medical inflation is at its all-time high and is bound to go higher in the coming years. Taking it into account, it is best to have health insurance alternatives, in case you are a freelancer, because even with a good amount of savings, the medical costs are sure to break the bank. 
• No Corporate Assistance: Since you are not a direct employee with a firm, you lose out on the corporate health insurance coverage. Thus, freelancers should choose an ideal cost-effective plan, given that there is no financial backing from the firm they work for.

Important Things to be Kept in Mind While Buying Health Insurance

Even though there are different types of health insurance available for freelancers, certain things need to be thought through before buying a plan. These include:

• Waiting Periods for Pre-Existing Diseases: Most of the policies include a waiting period between 2 to 4 years for pre-existing diseases. Make sure to check it, so that you will not have to incur any additional charges once the plan is bought. 
• Automatic Reinstatement of Sum Insured: Freelancers especially need to look for plans that have automatic reinstatement of the insured sum once the claim has been exhausted under medical emergencies. This helps avoid financial strain, as they do not have employer-provided health insurance or steady salary slips.  
• Hidden Restrictions and Limits: Always check for hidden charges and limits in claims. No room rent caps, along with zero co-pay, make it easier to have cashless hospitalizations. 
• Tax Deductions: Under Section 80D of the Income Tax Act, freelancers have the option to claim a tax rebate. This will help them to lower the actual cost at which the policy was set. 

What Health Insurance Plans Available are Beneficial to Freelancers?

For freelancers, there are mainly two types of health insurance available, which are quite beneficial: individual and family floater plan. You can choose between an individual or a family floater plan, depending on how much you can shell out and the specific coverage you need. Let us look at both pros and cons:

Individual Plans: It is a separate policy with each person having their own annual cover limit. This plan is best for freelancers who have family members with pre-existing conditions, seniors or elderly parents, and who themselves are unmarried. The pros and cons of the plan are:

Pros:

• No worry of coverage exhaustion. 
• Dedicated exclusive medical coverage.
• Higher total cover as per the budget. 

Cons:

• More paperwork and a multi-step medical underwriting process. 
• Involves multiple renewals and numerous claim tracking processes. 

Family Floaters: It is a single family policy that provides coverage to all the family members. This is the best plan for healthy couples with 1 or 2 children, having a moderate fluctuating income, as it gives reduced premiums. The pros and cons of the plan are:

Pros:

• The plan offers a lower premium. 
• Hassle-free application and renewal process.
• Usually, no separate medical underwriting is done. 
• Coverage is shared flexibly. 

Cons:

• Cover depletion faster on multiple hospitalisations. 
• Limited protection for the secondary party if the primary party uses up most of the annual coverage. 

Inclusions and Exclusions in Health Insurance

There are certain inclusions and exclusions in health insurance for freelancers. The inclusions typically consist of:

• Doctor Visit
• Surgeries
• Diagnositcs
• Hosptalisation

There are certain exclusions that are part of the health insurance for freelancers that will not be covered when the claim is made, which are:

• Infertility treatment
• Dental treatment
• Intentional self-injury treatment
• OPD treatment 
• Treatment for illnesses or injuries due to alcohol or drug use
• Unverified treatment plans
• Cosmetic surgery

What is the Process to Claim Health Insurance for Freelancers?

When you are trying to make a claim for your health insurance, there are usually two modes available. One is to pay upfront and then apply for reimbursement, or you can go with the cashless claims. Have a look at both the methods to know which would be best suited for you:

• Reimbursement Claim: This claim is used for OPD treatments, emergencies, accidents, and also in cases of treatment at non-network hospitals. You make the payment up front at the time of treatment and then claim the full money back later. 
• Cashless Claim: This is the most preferred mode of claim if the treatment is done at the network hospital mentioned in the insurer's list. In such cases, the bill generated would be directly sent to them for claim. 

Conclusion

Health insurance is a necessity for freelancers in India. Both these types of health insurance plans discussed, be it individual or family floaters, provide you with the surety of comprehensive coverage, without the requirement of salary slips. It is never advisable to wait till the last minute for a health crisis to happen, which will then force you to buy insurance. The best time to purchase a plan is when you are healthy, the premiums would be manageable, and you would have ample time to get through the policy terms and waiting period. Freelancing comes with the added responsibility of health insurance and protection on your own, and also securing your assets for the unforeseen medical expenses that can pile up in the future. 

This is where Niva Bupa Health Insurance can be very useful, with the provision of a tailor-made plan specifically for self-employed professionals. We make sure to offer a health insurance plan specifically focusing on providing flexible payment options, offering standalone financial stability, with 10,500+ hospital coverage, and restoration benefits. Be smart enough to make the right choice today and buy a health insurance plan with us for a secure tomorrow.

FAQs

1. Is there a tax benefit for freelancers under health insurance?

   Yes, freelancers in India, under Section 80 D of the Income Tax Act, can claim tax deductions up to ₹75,000 on health insurance plans. A deduction of up to ₹25,000 can be made for yourself, spouse, and children. In case of parents, an additional deduction of ₹25,000 for >60 years of age and up to ₹50,000 for senior citizens. 

    

2. Is a salary slip required to buy health insurance?

   No, freelancers do not need a salary slip for buying health insurance. Most of the insurance companies accept Aadhar Card, Pan Card, and ITR returns as proof of income for finalising the health plan selected. 

    

3. What is the minimum age for buying health insurance for freelancers?

   The minimum age to buy an individual health insurance plan is 18 years. The employment mode does not affect your eligibility as long as you have the means to pay for the premium. 

    

4. Do pre-existing health conditions get covered in a health plan for freelancers?

   Yes, pre-existing health conditions are covered in the health plan for freelancers. The coverage provided, though, is subject to an obligatory waiting period.