Protecting Yourself Without an Employer

The insurance freelancers need to buy for themselves - health, term life, disability and equipment cover - and how to choose sensibly.

Salaried employees often get group health insurance and sometimes life cover through their employer. Freelancers must arrange protection themselves.

Health insurance

A single hospital stay can wipe out savings. Freelancers should buy an individual or family floater health policy.

Choose adequate cover, often recommended at 10 lakh rupees or more in cities.
Consider a super top-up policy to add cover cheaply.
Buy young, when premiums are lower and there are fewer health conditions.
Check waiting periods, room rent limits and co-payments.

Premiums paid for health insurance can reduce tax under the old tax regime.

Term life insurance

If others depend on your income, a term plan pays a lump sum if you die during the policy term. It’s inexpensive for young, healthy people. A common guide is cover of 10 to 15 times annual income.

Income protection

Freelancers earn nothing if they can’t work. Personal accident policies and critical illness cover can pay lump sums in case of accidents or serious illnesses. True long-term disability income insurance is limited in India, so savings are also important.

Equipment and liability

Equipment insurance for laptops, cameras and other tools.
Professional indemnity insurance protects against claims that your work caused a client loss, useful for consultants and developers working with large clients.

Government schemes

PM Jeevan Jyoti Bima Yojana and PM Suraksha Bima Yojana offer very low-cost life and accident cover through bank accounts.
Ayushman Bharat covers eligible lower-income families.
The Code on Social Security aims to extend benefits to gig and platform workers.

Building layers

Combine insurance with an emergency fund. Insurance covers big shocks; savings cover smaller ones and waiting periods.

The broken arm

A freelance photographer breaks his arm and can't work for two months. His health insurance covers the surgery, and a personal accident policy pays a lump sum. His emergency fund covers rent. Without these, he would have needed to borrow.

Thinking young freelancers don't need insurance

Accidents and illness can happen at any age, and buying young locks in lower premiums.

Key takeaways

Freelancers must buy their own health insurance.
Term life insurance protects dependants at low cost.
Personal accident and critical illness cover help replace lost income.
Combine insurance with an emergency fund.