How to Choose the Right Health Insurance Plan for Gig Workers?

By 2032, the market size of the Indian gig economy is projected to grow to $1847 billion. Despite that, a large proportion of the gig economy has unpredictable wages, poor or no healthcare insurance and non-flexible work culture. Most of the delivery partners operate without any business health insurance on a day-to-day basis. But is a standard health plan sufficient in today’s times, and how to choose the right business insurance for gig workers? Let us know this.

How to Choose The Right Business Health Insurance For Gig Workers?

Let’s understand now the exact factors to check before buying business health plans.

Accidental Disability and Death Benefits

Riders are always exposed to road accidents and permanent disability risk. In 2022, more than 1 lakh road accidents have claimed lives in India. Before you purchase insurance, always check if it covers these 3 things:

Permanent Disability Coverage

The insurance plan should cover permanent disability due to accidents, such as loss of eyesight or hands or feet damaged.

Temporary Disability Coverage

Cases of temporary disability should also be covered. For example, coverage for fractures or sprains due to accidents that require prolonged bed rest.

Accidental Death Coverage

Gig workers who work for quick commerce aggregators have a higher risk of being fatally injured or meeting with death. This is the main reason why accidental death coverage should be listed in the coverage.

Medical Coverage

Expenses for covering medical costs should be included in the inclusion of the policy. Coverage for inpatient care and hospitalization costs is borne by the insurer in case your gig rider gets injured from an accident on the job.

Waiting Period

IRDAI reduced maximum waiting periods for pre-existing diseases from 48 months to 36 months, effective April 2024. Because you cannot claim during the waiting period, always consider a policy that has a zero waiting period and the coverage starts from day one.

Maternity Coverage

For female gig workers, maternity leave has become a necessity. Women gig workers now demand maternity benefits, and even the Central government has mandated on offering maternity benefits by Code on Social Security, 2020. Covrzy’s gig insurance includes maternity benefits as well as newborn coverage by default, starting from day one.

Death Body Carriage

Although this is not a mandatory factor to look for, it is still better to be included in the coverage. The transportation cost of carrying the dead body will be borne by the insurer in case any of your gig workers dies by accident.

Claim Settlement Ratio of Insurer

Another factor to look for is the Claim settlement Ratio (CSR), as it indicates reliable claim processing. A business health cover plan for gig workers is ideal if the CSR is above 95%, with faster processing time. Always check with IRDAI’s list to know the exact CSR ratio of your insurer.

Cashless Hospitalization at Network Hospitals

Check if business health plans allow for cashless hospitalization in network hospitals. Most of the insurers offer 20,000+ network hospitals across India, which you can check during the free look period.

Also read how to manage your corporate health insurance premium if you are laid off.

How to Select the Best Plan for Gig Workers?

Here are some tips to follow before you select a suitable business health insurance for gig workers.

Assess Rider’s Risk Profile

Understand the risk profile per delivery rider. You can categorize them as per their full-time or part-time work, their age, and if they have any pre-existing disease (PED) condition. Riders whose age is higher than 40, and also have PED, will require a business health coverage that covers PED with coverage for critical diseases.

Checking for Ease of Portability When You Switch Insurers

IRDAI mandates seamless portability when you port the policy to a different insurer. Before you subscribe to a particular insurer, ensure that you inquire about the portability history of that insurer.

Compare Premium vs. Coverage

Calculate the value-to-risk ratio by dividing annual coverage by premium paid. Review cumulative bonus structures offering 50-100% sum insured increase for claim-free years. Also, check if the coverage doubles coverage over time without proportionate premium hikes.

Also read why your insurer can decline porting of your health insurance.

Why Traditional Health Insurance Is Not Sufficient for Gig Workers

Many traditional health insurance plans only cover major health illnesses, and leaves out multiple benefits which a gig health insurance would cover. A standard business health coverage does not covers:

• OPD expenses
• Coverage during accidental injury or death
• Ambulance charges
• Daily room rent
• Pre-existing diseases
• Mental health therapy cost
• AYUSH treatment coverage The average pay for the delivery partners range between ₹10,000 to ₹25,000 per month. A sudden hospitalization without any health insurance can wipe out weeks of their earnings. Without a business health cover, riders bear 100% of medical costs. Traditional business health insurance models assume steady incomes and continuous employment, which is why they fail for gig workers. Moreover, standard health insurance often excludes accidental injuries and physical disability too.

Also read what is the moratorium period in insurance.

Conclusion

Before considering the right health insurance for delivery partners, always consider essential coverage terms such as CSR ratio, accident, and disability coverage. If you run a food delivery aggregator platform or a startup that employs gig workers, the best model to consider is the business health insurance for gig workers. The model is specially designed to offer benefits to the gig workers who are susceptible to road accidents and don’t have a stable income.