No employer health cover? What freelancers, gig workers and entrepreneurs should consider before buying a policy

For salaried employees, health insurance is often part of the employment package. But freelancers, self-employed professionals, entrepreneurs and gig workers have to arrange their own cover. The challenge is not just paying for hospitalisation. A serious illness can also mean losing income at a time when medical expenses are rising.

For people with irregular earnings, health insurance therefore serves a dual purpose. It can help protect savings from a large medical bill while providing continuity of cover even when work or assignments change.

“For a gig worker, therefore, health insurance is not only about paying hospital bills. It is about protecting savings and reducing financial stress during a period when earning may temporarily stop,” said G. Srinivasan, MD & CEO, Galaxy Health Insurance.

Personal health cover can provide continuity

Those working across assignments, platforms or clients may not be able to rely on a single employer or platform for long-term health protection. Any cover provided through an organisation may be linked to the individual’s association with it, while the level of coverage may also not be sufficient for the person’s or family’s needs.

A personal health insurance policy can provide greater continuity as an individual moves between jobs, assignments or work opportunities, subject to policy terms and timely renewal.

“Any health cover offered through an employer or platform can be useful, but it is better viewed as additional protection rather than the worker’s only financial safeguard against healthcare expenses,” Srinivasan said.

For someone choosing a policy, the sum insured, affordability of the premium and the individual’s share of medical expenses are important considerations. Access to a network of cashless hospitals can also matter because arranging a large amount of money during a medical emergency can be difficult, particularly when income is irregular.

Depending on the nature of their work, gig workers may also consider personal accident and other suitable protection against situations that could affect their ability to earn.

How much health insurance is enough?

There is no single health insurance amount that works for everyone. The cover should take into account age, health needs, dependants, expected treatment costs and the person’s ability to sustain the premium over the long term.

Someone supporting a spouse, children or ageing parents may need to assess the healthcare requirements of the entire family rather than simply looking at their own medical needs. The cover should also be reviewed after major life changes such as marriage, having children or taking responsibility for parents.

Where a person lives and where they are likely to seek treatment also matter. Healthcare costs can vary across locations, and someone living in a large city or likely to use major private hospitals may need to factor in higher hospitalisation costs.

Income alone should not determine the amount of cover. A high earner can still face financial stress from a large medical bill, while a serious illness can simultaneously increase expenses and reduce the ability of a self-employed person to earn.

If a large base policy is difficult to sustain, Srinivasan said a suitable base policy with a super top-up could be considered for additional protection. The key is to choose cover that can be renewed comfortably year after year rather than buying a policy that becomes unaffordable during a lean period.

Budget for premiums even when income fluctuates

For freelancers and gig workers, health insurance premiums should be treated as a regular household expense rather than something to arrange only when the renewal date approaches.

One way to manage this is to set aside a portion of earnings whenever income comes in. This can help create a dedicated pool for the annual premium, particularly when monthly earnings are unpredictable.

The premium itself should remain manageable. Choosing an expensive policy that becomes difficult to renew during a weak income year can undermine the continuity of coverage.

Paying the premium in smaller instalments, where the policy allows it, can also make cash-flow management easier. At the same time, policyholders should maintain some separate emergency savings because insurance may not cover every medical expense. Deductibles, co-payments and non-covered expenses may still have to be paid from one’s own pocket.

The larger risk for self-employed workers is allowing a temporary fall in income to interrupt health protection. As Srinivasan puts it, “use the better earning months to prepare for the leaner ones, so that health protection remains uninterrupted throughout the year.”