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Health Insurance for Self-Employed

In today's world, there are many options for health insurance for self-employed individuals who can find the right policy for their needs. Self-employed health insurance plans cover all essential medical expenses, including pre and post-hospitalisation expenses, surgeries and preventive care. ...Read More

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Self-employed health insurance plans

Health Insurance Plans for Self employed

Health Insurance for Self employed
June 28, 2024

Table of Content

 

What Is Health Insurance for Self-Employed?

Health insurance for self-employed professionals is a health insurance coverage that provides financial assistance for medical emergencies that require hospitalisation and treatment. Self-employed professionals are not employed in any public or private sector; hence, they are not covered by group/employee insurance coverage.

These kinds of health plans are ideal for self-employed professionals, including business partners, sole proprietorships, businessmen, freelancers, farmers, the labour sector,small traders and more.

Being a self-employed worker, it is advisable to purchase health insurance for protection for yourself and your family. This will also safeguard your income and savings during any unforeseen incident.

Benefits of Health Insurance for a Self-Employed

Health insurance plans offer significant benefits for self-employed individuals including preventive care that help to detect critical disease at an early stage. Additionally, individuals are exempted from taxes and provided financial relief during times of need.

Here are the benefits of health insurance for self-employed individuals:

  • Save on taxes

    • Health insurance plans for the self-employed help you save taxes. Usually, you are subjected to tax payments irrespective of your source of income. You can avail tax benefits of up to Rs. 25,000 on health insurance premiums. This is applicable under Section 80D# of the Income Tax Act.

    If you have paid health insurance premiums, you can receive tax benefits for your parents, spouse, and children.

  • Your Savings Stay Safe

    • Opting for a health insurance plan is ideal to protect your savings from any unforeseen medical emergencies.

    When you invest in a health insurance plan for the self-employed, you can avail comprehensive life coverage for ambulance services on the road, inpatient hospitalisation, day care treatment and others. This way, you can enjoy healthcare benefits without exhausting your savings.

  • Protection Against Rising Medical Costs

    • Because of the advancement in medical technology, the treatment costs of critical illness are rising rapidly. Thus, even if you keep your money aside for treatment, you will fall short of finances during medical urgency.

    Here, the utility of health insurance for the self-employed becomes prominent. These plansprovide financial assistance and cover medical expenses when required. Thus, by opting for this insurance, you can visit any network hospital for treatment without worrying about covering expenses.

  • Type of Plan

    • This is the most important factor to consider when choosing to invest in a health insurance planas a self-employed policy buyer. Explore the various health insurance options available to you. Some of the popular health insurance plans include individual health insurance, critical illness plans, family floater plans and maternity health insurance plans.

    To choose the right type of health insurance plan, consider factors such as age, medical history, pre-existing diseases, extent of coverage needed and so on.

  • Coverage

    • While investing in a health insurance plan, make sure to look at its coverage options. Do not go for the cheapest premium, as it might not include all the features you need. Inclusions of a good health insurance plan are domiciliary hospitalisation, organ donor coverage, alternate treatment coverage, day-care treatment, pre and post-hospitalisation cover and so on.

    Thus, choose the health insurance plan for the self-employed, according to your requirements and financial objectives.

  • Availability of Additional Features

    • Life insurance plans for self-employed individuals may include several additional features that include wellness programs, telemedicine services, mental health services, and customisable plans according to the specific needs of individuals. Offering these features helps to enhance health management from a holistic perspective.

  • Premium Amount

    • Most health plans require a large, one-time premium, but it is essential to mitigate the risk of expensive medical bills during any unforeseen medical emergency. When choosing an insurance plan, make sure to consider the coverage level, age, health condition, and location. These factors determine the premium amount you need to pay to offset high medical costs.

  • Staying Insured

    • Staying insured also reduces your financial burden and brings about health stability in the long run. As a self-employed individual, you must focus on business without worrying much about covering medical expenses. Having health insurance is necessary to live worry-free.

Understanding the Types of Health Insurance Plans in India

There are different types of health insurance plans that individuals can avail across different sections of society. Here is a detailed explanation of health insurance plan types:

  • Individual Health Insurance Plans

    • As the name suggests, an individual health insurance plan offers comprehensive insurance coverage to individuals. Paying an extra premium lets you add other family members includes your parents, spouse, and children.

    Irrespective of the number of members, you can enjoy the insured amount individually. The premium charged by an individual health plan is based on factors such as the age of the insured person, sum insured, medical history and others. For multiple members, the amount charged is higher than a family floater plan as it offers a separate sum insured.

  • Family Floater Health Insurance Plans

    • Family floater plans offer comprehensive coverage to all family members under a single premium and with a single sum insured. Usually, the premium is decided considering the age of the eldest member of the family.

    If there are no kids or no member is prone to any critical illness, a family floater plan will be an ideal option as there are fewer chances of exhausting your insured sum. However, if any family member possesses serious health conditions such as cardiovascular disease, a family floater plan is not a good option. If a major portion of the sum insured is utilised for medical treatment of one member, other members would get only a small coverage.

  • Critical Illness Insurance Plans

    • Critical illness insurance offers coverage for all critical diseases including kidney failure, paralysis, heart attack and others. Treatment for these diseases are very expensive and time-consuming. Apart from medical costs, these insurance plans may also include other expenses such as chemotherapy, doctors visits, etc.

    With critical insurance plans, you will get a lump sum amount to cover all medical-related costs. Moreover, it compensates your income loss for diagnosing any severe health-related conditions. You can enjoy this benefit as a rider along with an existing health insurance policy.

    Critical diseases covered by these policies include stroke, heart attack, multiple sclerosis, open heart surgery, kidney failure and more. You can also avail financial cover against critical illnesses through a rider along with your term insurance plan.

  • Group Health Insurance Plans

    • Any group manager can opt for a group health insurance plan. Unlike individual or family floater plans, group health insurance offers coverage for a large number of individuals. For example, an employer can issue a group insurance plan for employees as an additional benefit. However, only basic health treatment is covered under this plan.

  • Government Health Insurance Schemes

    • The Government of India offers several schemes for easy access to healthcare for all citizens. These government schemes cover low-income families and elderly people who cannot opt for private health insurance because of its rising costs.

    These policies cover a wide range of medical-related services for individuals lying below the poverty line. The government can collaborate with other stakeholders such as hospitals and insurance companies to deliver smooth health coverage.

Common Reasons Health Insurance for Self-Employed Individuals May Not Cover

Understanding common exclusions under health insurance for self-employed individuals is important for proper financial planning and reaching financial goals. Here are the exclusions described in detail:

  • Pre-Existing Conditions

    • You must disclose any medical conditions you have before buying a health insurance plan to get coverage. Pre-existing medical conditions refer to any specific health problems or illnesses. When these are covered, a waiting period is applicable, within which you will not get coverage.

  • Waiting Period

    • Pre-existing medical conditions are not covered by group health insurance until the waiting period passes. This exclusion is applicable for all medical services with a pre-existing history. Different waiting periods are applicable for specific illnesses, critical illnesses and maternity benefits. Moreover, every health plan has an initial waiting period.

  • Cosmetic and Aesthetic Treatments

    • Cosmetic and aesthetic treatments are mostly not covered under health insurance plans. Expenses for cosmetic treatments range between Rs. 50,000 and Rs. 1 Lakhs, depending on the treatment type. The rationale behind this is health insurance focuses primarily on essential medical needs to improve the health conditions of individuals.

  • Alternative and Unproven Treatments

    • Various alternative treatments can be added to the health insurance plan. But before you opt for any plan, look into the treatments that will be covered under the plan and which ones are not. Moreover, alternative treatments might be expensive and not affordable for everyone. To include alternative therapies, consult with your insurance provider. Experimental treatments are usually not covered.

  • Injuries from Dangerous Activities

    • Health insurance plans for self-employed do not cover injury from dangerous activities like adventure sports. This plan usually doesn’t cover any mental illness or cancer treatment unless they are pre-existing. If you are injured because of someone trying to commit suicide, you may receive compensation from that individual or organisation who is responsible for the same.

  • Deliberate Self-harm or Substance Abuse

    • Health insurance plans for self-employed do not offer coverage for self-harm or substance abuse. These are excluded, considering the principle that health insurance covers only unforeseen medical conditions and not any conditions arising from voluntary conditions. There are, however, some plans that offer additional coverage to mental health programs.

Who Can Buy Health Insurance for Self-Employed?

A large section of the population in India can purchase health insurance for the self-employed. Here is a detailed overview of individuals eligible for availing these types of health insurance:

  • Self-Employed Professionals

    • To protect themselves and their families, self-employed professionals such as lawyers, doctors, consultants, and architects can buy health insurance.

  • Business Owners

    • Owners of businesses, irrespective of their size can choose health insurance policies designed specifically for meeting their financial needs.

  • Entrepreneurs

    • Entrepreneurs can also avail health insurance policies to protect their employees and look after their own health.

  • Consultants

    • Self-employed consultants, be it in the marketing field, finance or any other sector, can purchase health insurance policies to protect their financial health..

  • Freelancers

    • Freelancers, working on a project basis and are not associated with any employer, can avail health insurance policies to secure their health-related issues.

  • Artists and Creatives

    • Artists and creatives such as writers, artists, photographers and designers can opt for health insurance policies as per their health requirements.

  • Tradespeople

    • Tradespeople such as plumbers, carpenters, electricians, and others should purchase health insurance to safeguard themselves from any unforeseen medical expenses.

  • Service Providers

    • Individuals offering services, such as IT professionals, engineers, accountants and others, should purchase health insurance to protect themselves and their families from any health-related concerns.

  • Independent Contractors

    • Independent contractors employed on a contract basis for different clients should secure their health by purchasing health insurance policies designed for the self-employed.

  • Micro-entrepreneurs

    • IMicro-entrepreneurs who run micro-businesses such as small shops or street shops should explore health insurance policies and purchase them to secure their wealth from medical emergencies.

How to Pick the Best Health Insurance for the Self Employed?

To choose the best health insurance plan for the self-employed, make a thorough comparison of plans that insurers offer online, considering several factors. Here are the factors to keep in mind while choosing health insurance for self-employed:

  • Comprehensive Coverage

    • Make sure the chosen plan covers a wide range of medical services that include outpatient care, hospitalisation, dentistry, maternity care if needed. If you have specific needs, make sure they are covered as well.

  • Global Coverage

    • Every policyholder needs to opt for a plan that offers international coverage. This will protect you financially irrespective of where you shift for work purposes.

  • Affordability

    • This is one of the most important factors to look into when deciding to purchase a life insurance plan for the self-employed. Usually, health insurance policies offers a balance between coverage and affordability. Look into out-of-pocket expenses that won’t drain your savings.

  • Dependents

    • If you are planning for self-employed health insurance, opt for a plan that will let you add dependents that include your parents, spouse, children.

  • Network of Providers

    • Choose an insurance plan that covers a wide network of hospitals and doctors. This will provide you with more healthcare options and easy access to healthcare specialists when you need them.

  • Reliable Customer Support

    • The chosen health insurance should have reliable customer support service assisting you with questions and concerns essential for understanding health issues. Further, the insurer should have a high claim settlement ratio, demonstrating their commitment to fulfilling genuine claims.

Summary

Health insurance for self-employed is a crucial investment that offers tax benefits and financial assistance. Considering the features and benefits of various plans, self-employed professionals can select a plan as per their requirements. Staying insured is important not only for safeguarding savings but also for providing access to quality healthcare. This allows self-employed individuals to place emphasis on the health of families and to secure their future financially.

FAQs on Health Insurance for Self Employed

1. Which insurance is best for the self-employed?

For self-employed, both individual and family floater health insurance plans are ideal options. Self-employed individuals can choose a plan as per their budget and needs.

2. Is critical illness covered under health insurance plans for self-employed individuals?

Health insurance plans for self-employed individuals typically don't cover critical illnesses. You need to purchase this plan separately as a rider.

3. Do self-employed individuals need to take a medical test before buying the plan?

Yes, self-employed individuals may need to complete a medical test before purchasing the plan.

4. How much does health insurance cost if you are self-employed?

If you are self-employed, the costs of health insurance in India vary depending on factors such as any history of pre-existing disease, age, requirements of coverage, and details of insurance provider. Take quotations from different insurance companies to understand about health insurance costs.

5. Do health insurance plans for self-employed individuals come with any waiting period?

Yes, all health insurance plans for self-employed individuals come with an initial waiting period. During this initial period, the insurance plan doesn’t cover some specific illness or treatment.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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1. Annual Premium amount ₹ 1869 for Male aged 35 years, Base Benefit, 10 years term, Regular Pay option, Sum Assured=10 lakhs, excluding Taxes & levies as applicable.

# Tax benefits are subject to conditions under Section 80D and other provisions of the Income Tax Act, 1961. Tax Laws are subject to change from time to time.

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