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Guide to Freelancer Insurance in Singapore

The gig economy has transformed the workforce, and freelancers and gig workers must prioritize their protection. This comprehensive guide provides essential information about freelancer insurance in Singapore.

Freelancing has gained significant momentum, especially in the aftermath of the Covid-19 pandemic. With many individuals losing their jobs or experiencing reduced income, freelancing became an attractive option to earn money independently.

Whether freelancers pursue it as a full-time career or a side hustle alongside their primary jobs, the gig economy comes with its own pros and cons. However, one undeniable fact is that freelancers face challenges and lack the employee benefits and protections enjoyed by traditional employees.

Freelancers must take responsibility for their own protection and insurance coverage. While the “Employment Act” mandates employers to provide general and work-related accident protection coverage, as well as medical expense benefits up to $100,000, self-employed individuals and freelancers must secure these coverages independently.

Apart from the obvious considerations, such as accident protection and medical expense coverage, there are other factors that freelancers often overlook when it comes to their protection and insurance:

  1. Group Insurance Benefits: Regular salaried employees typically receive some form of group insurance coverage from their employers. This is especially valuable for individuals with pre-existing conditions who may struggle to obtain personal health insurance. Unfortunately, freelancers, being independent contractors, do not receive this benefit.
  2. Lack of Sick Leave and Hospitalization Leave: Unlike employees who are entitled to paid leave, freelancers face a harsher reality – if they don’t work, they don’t get paid. This means that freelancers should consider insurance coverage that extends beyond medical or hospital bill coverage to protect against potential loss of income. This is particularly important during challenging times like the Covid-19 pandemic.
  3. Equipment Protection: For freelancers, their tools of the trade are essential for their livelihood. However, without the financial reserves or access to credit that large companies have, the loss or damage of equipment like musical instruments or high-end electronic systems can be financially devastating. Therefore, it’s crucial to explore options for equipment protection coverage.

Freelancers in Singapore should carefully consider the types of health insurance policies that best suit their needs. Here are key policies to consider:

1. Income Protection Insurance / Disability Income Insurance

Freelancers should account for potential loss of income due to illness, hospitalization, or permanent disability. Disability income insurance provides coverage for a percentage (typically 75% to 80%) of the average monthly salary until retirement or the chosen policy term. Singapore offers income protection plans specifically designed for freelancers, providing at least some level of protection. The plan provides financial assistance to freelancers who are unable to work due to illness, injury, or other events. This type of insurance can help to cover your lost income, medical expenses, and other costs, so that you can focus on your recovery.

There are a number of different freelancer income protection insurance plans available in Singapore. Some of the most popular plans include:

  • Gigacover Freelancer Earnings Protection: This plan provides a daily cash benefit of up to $80 per day when you are unable to work due to illness or injury. The plan also covers hospitalisation expenses and outpatient expenses.
  • IncomeShield Freelancer Income Protection: This plan provides a monthly income benefit of up to 70% of your pre-disability income. The plan also covers hospitalisation expenses and outpatient expenses.
  • NTUC IncomeShield Freelancer Income Protection: This plan provides a monthly income benefit of up to 75% of your pre-disability income. The plan also covers hospitalisation expenses and outpatient expenses.

The cost of freelancer income protection insurance will vary depending on the plan you choose, your age, your occupation, and your health history. However, in general, this type of insurance is relatively affordable.

If you are a freelancer, it is important to consider getting freelancer income protection insurance. This type of insurance can provide you with peace of mind knowing that you will be financially protected if you are unable to work due to illness or injury.

Benefits of having income protection insurance as a freelancer

  • It can help to cover your lost income, so that you can focus on your recovery.
  • It can cover your medical expenses, so that you don’t have to worry about paying for them out of pocket.
  • It can help to protect your financial security, so that you can continue to provide for your family.

If you are considering getting freelancer income protection insurance, there are a few things you should keep in mind:

  • Make sure to compare different plans to find the one that is right for you.
  • Consider your needs and budget when choosing a plan.
  • Read the terms and conditions carefully before you sign up for a plan.

Freelance income protection insurance is a valuable tool that can help to protect your financial security. If you are a freelancer, I encourage you to consider getting this type of insurance.

2. Health/Personal Accident Insurance

Freelancers should secure their own medical insurance to cover medical expenses. While Singapore’s MediShield Life provides basic health insurance for citizens and Permanent Residents, freelancers can consider additional coverage through an Integrated Shield (IP) plan offered by private insurers. IP plans offer higher claim limits, coverage for pre-hospitalization and post-hospitalization treatments, and entitlements for stays in higher hospital ward classes.

3. Critical Illness Insurance

This policy provides a lump sum payout upon the diagnosis of covered critical illnesses such as cancer, stroke, and heart attack. In addition to covering medical expenses, it can also help with living expenses and other treatment-related costs.

4. Equipment Insurance

Although options for insuring equipment may be limited for freelancers, manufacturers or retailers often provide warranties and technical support. Additionally, home content insurance policies may cover equipment under certain circumstances, especially if freelancers operate from a home studio or home office.

5. Professional Indemnity Insurance

Freelancers should consider professional indemnity insurance to protect themselves from legal liability. This coverage addresses incidents like omissions, document loss, intellectual property rights infringement, and claims brought against them in court. It helps cover the costs of legal defense in the event of lawsuits.

Finding a balance between insurance needs and affordability is crucial for freelancers. As freelancing is an emerging segment of the economy, labor laws have yet to fully catch up in terms of protecting freelancers compared to conventional employees. Therefore, freelancers and gig economy workers must be proactive in seeking their own safety nets.

In making insurance decisions, freelancers should carefully consider their specific needs and prioritize immediate concerns based on their budget. Consulting a financial advisor can be beneficial in making informed decisions about insurance coverage.

In conclusion, freelancers and gig workers are an integral part of the new workforce in Singapore. Protecting oneself through insurance coverage is essential. By considering the various insurance policies available, such as income protection, health/personal accident, critical illness, equipment, and professional indemnity insurance, freelancers can mitigate potential risks and secure their financial well-being.

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