Is your side hustle insured?
LOOK INTO IT: IT MAY NOT BE OBVIOUS, OR EASY, BUT IT IS POSSIBLE
Income protection offers a safety net should you become disabled.
Astudy by the Henley Business School of Africa earlier this year found that almost a third of working South Africans are earning an income from something apart from their main employment.
According to the analysis – What is the future of work in South Africa: Examining the “side hustle” economy – side hustling allows people the security of multiple streams of income, as well as the ability to pursue a different passion or business idea.
These side hustlers have to think about what side project means in terms of how they manage their finances. If their secondary income is significant they would be reliant on it to maintain their standard of living.
Unfortunately, like many entrepreneurs, they may neglect the importance of insuring it.
Even if they have taken out income protection on their main income, their side hustle might not be insured.
This may not, however, be entirely due to their own oversight.
Traditional insurance products are not designed to consider more than a single source of income, and insuring a secondary income is neither obvious nor easy.
The shifting work environment, therefore, requires that insurers also show flexibility.
“The world of work has changed quite a bit,” says Kresantha Pillay, lead specialist for lifestyle protector at Liberty Group. “People have multiple jobs and the interconnectivity of things
In Liberty’s case, the conclusion is that it isn’t. The company has therefore introduced a firstof-its-kind product that covers two occupations under one policy.
“The second income needs to be significant – 20% or more of the total,” Pillay says. “But it could be as much as a 50/50 split.”
This allows individuals to take out income protection over both their main and secondary incomes, thereby fully protecting themselves if they were to become disabled.
As with their main employment, however, they must be able to show proof of income in the form of an income tax return.
“A salaried employee can show us a salary slip, but you don’t get that with your side hustle,” says Pillay. “So, for now, we rely on you disclosing it to Sars [the South African Revenue Service].”