What insurance options exist for freelancers and contract workers in India?

Freelancers and contract workers in India cannot access employer-paid group health insurance the way full-time employees can. Three practical alternatives exist: buying retail individual health insurance directly, joining platform-based group cover offered by some gig work marketplaces, or being covered as an extended category under a client company's group policy. Section 126 of the Income Tax Act, 2025 (renumbered Section 80D) allows self-paid premiums to be deducted under the old tax regime.

What are the main insurance options for freelancers?

Three broad routes are available:

• Retail individual or family health insurance: A policy bought directly from an IRDAI-licensed insurer, with the freelancer paying premium in full. Sum insured, riders, and tenure are chosen by the freelancer.
• Platform-based group cover: Some gig marketplaces (food delivery, ride-hailing, freelance platforms) offer group insurance to their registered workers, either free or at subsidised rates.
• Client company's contractor rider: A few large employers extend their group policy to long-term contractors and consultants, treating them as an eligible category under the policy definition.

The Code on Social Security, 2020 (effective from 21 November 2025) has also introduced statutory social security benefits for gig and platform workers, expanding the safety net beyond traditional employees.

What does retail individual health insurance cost for a freelancer?

Retail health insurance premiums for a freelancer vary by age, city, sum insured, and family composition. For a healthy 30-year-old in a metro, a Rs 5 lakh individual policy costs approximately Rs 8,000 to Rs 15,000 per year. Family floater cover of Rs 10 lakh for a couple with one child costs approximately Rs 15,000 to Rs 25,000 per year. These figures rise materially past age 40 and again past age 55. Explore Plum Personal.

Are freelancers eligible for the tax deduction on health premium?

Yes, under the old tax regime. Health insurance premium paid by an individual qualifies for deduction under Section 126 of the Income Tax Act, 2025 (renumbered Section 80D of the 1961 Act), within these limits:

• Rs 25,000 for self, spouse, and children
• Rs 50,000 for parents (if either is aged 60 or above)
• Rs 1 lakh maximum combined

These deductions are not available under the new tax regime, which is the default from AY 2026-27.

What is platform-based group cover?

Some gig marketplaces have introduced group health insurance for their registered workers, either as a standard feature or as an optional benefit. Coverage terms typically include modest sum insured (Rs 1 lakh to Rs 5 lakh), limited family cover, and basic accident cover. Awareness among gig workers is often low, and many platforms have added communication and enrolment campaigns as part of their compliance with the Code on Social Security, 2020.

Can a client company cover a long-term contractor?

Yes, at some employers. Where a contractor works on a sustained basis with a client company (typically 6 months or longer), the client may extend group health cover as an "additional insured" category, provided the insurer permits this in the policy definition. This is more common at technology, financial services, and consulting firms with sizeable contractor populations.

How should a freelancer choose between the options?

Freelancers with stable client relationships benefit most from a client-extended cover, if available, because the client bears some or all of the premium. Freelancers on platforms with meaningful group cover should enrol into it as a baseline and layer retail cover on top. Freelancers without either option should buy retail cover directly, since being uninsured leaves them exposed to hospitalisation costs that can easily exceed a year of income.

How Plum approaches this

Plum works with client companies that want to extend group cover to long-term contractors, structuring the additional-insured category in a way that meets the client's compliance obligations and the insurer's underwriting rules. Across Plum's group book, claims NPS runs at 79 and cashless pre-authorisation clears in a median of 45 minutes, and these service standards apply uniformly to all covered members including contractor categories where the policy extends. Plum places group cover from a minimum of 7 employees, working with partner insurers including ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, Niva Bupa, and Aditya Birla Health Insurance.

Frequently asked questions

Can a freelancer claim GST input tax credit on health premium?

Individual GST-registered freelancers cannot claim input tax credit on their own health insurance premium; input tax credit on employee health insurance is blocked under Section 17(5)(b) of the CGST Act.

Do freelancers face different waiting periods on retail policies?

Retail health policies apply standard PED waiting periods up to 36 months under the IRDAI Insurance Products Regulations, 2024. There is no differentiation for freelancers versus salaried buyers.

Are gig workers covered under ESI?

Under the Code on Social Security, 2020, gig workers are entitled to social security benefits including limited health cover, though the operational rollout is still evolving in 2026.

Can a freelancer join their spouse's group policy?

Yes, where the spouse's employer allows dependants and the freelancer meets the dependant definition. Coverage terms follow the spouse's group policy.

Is contractor cover treated the same as employee cover?

The insurer treats contractor cover according to the specific policy terms. Some contractor riders exclude maternity or parental cover, or apply higher co-payments.

What happens to platform-based cover if the freelancer stops using the platform?

Cover typically ends when the freelancer's active status on the platform ends, similar to how employer group cover ends on the last working day.