Side hustles are booming in New Zealand, with many Kiwis taking on extra work outside their regular jobs to boost their income. Whether it’s freelancing in graphic design, tutoring, or running an online business, side hustles offer great flexibility. However, they also bring unique challenges—especially when it comes to insurance.
Many people assume their current insurance policies will automatically cover their side hustle activities, but that’s often not the case. Depending on how much time you spend on your side job, or how much income it generates, your existing insurance may no longer be suitable. That’s why it’s so important to review your cover and speak with an expert about your options.
The Risks of Side Hustles
While side hustles can be an exciting way to earn extra money, they also come with risks that could affect your financial stability if you don’t have the right insurance. For example, you may find your policy doesn’t cover secondary sources of income if your side hustle grows, or you may not be eligible for insurance at all if you work too many hours.
Many insurance providers have rules around insuring secondary income sources, meaning your side hustle could be excluded from coverage. This makes it critical to seek professional advice to understand your eligibility and ensure you’re properly protected.
1. Income Protection Insurance: Securing Your Income Stream
One of the biggest considerations for side hustlers is income protection insurance. This type of cover provides a regular income if you’re unable to work due to illness or injury. If your side hustle is an important part of your income, losing the ability to work in both your primary and secondary roles could have a significant financial impact.
However, income protection policies often have specific conditions around how many hours you can work and how much income you’re allowed to generate from secondary employment. If your side hustle grows into a major income stream, you could find yourself ineligible for cover under your current policy.
Speaking with an insurance expert is the best way to understand how income protection applies to your situation and whether your side hustle could affect your eligibility. They can guide you on whether an existing policy needs to be updated or if you need a new form of coverage. You can explore your options and learn more by visiting our Personal Insurance page.
2. Life Insurance: Protecting Your Loved Ones
If you have dependents who rely on your side hustle income, it’s important to consider how this affects your life insurance needs. Your existing life insurance policy may not account for the additional income you’re generating or the extra financial commitments you’ve taken on.
For example, if you’ve started a side hustle to save for your children’s education or support your household, would your family be financially secure if something happened to you? Reassessing your life insurance is crucial to ensure it reflects your current financial situation.
However, like income protection, life insurance policies often have rules around secondary employment. Working too many hours on your side hustle or earning beyond a certain threshold could affect your policy or make you ineligible for cover. Consulting with a financial adviser can help you understand what’s covered and what adjustments might be necessary.
3. Health Insurance: Prioritising Your Wellbeing
Many side hustlers are self-employed or work casual hours, meaning they don’t have the luxury of employer-provided sick leave or health cover. Health insurance can fill this gap by giving you access to private healthcare, ensuring you can get treated quickly and get back to work sooner if you become ill or injured.
Your side hustle may involve physical work, or simply require you to be in good health to continue generating income. Ensuring you have health insurance in place means you won’t face long wait times in the public system, especially if an illness or injury could take you out of work for weeks or months.
It’s important to understand that health insurance policies may also have stipulations around secondary sources of income. Speaking with an adviser will give you a clear picture of what your policy covers and whether it needs to be adjusted based on your side hustle.
Why You Should Speak to an Insurance Expert
While it might be tempting to research insurance options online, the complexities of insuring secondary income sources make it crucial to speak with an expert. Insurance providers often have strict rules about how many hours you can work on your side hustle or how much you can earn before it affects your eligibility. If you rely heavily on your side job, this could mean your current policies aren’t giving you the protection you need.
An adviser can walk you through your options, explain how your side hustle may impact your insurance, and recommend the best course of action to keep you covered. This will give you peace of mind that your growing business won’t leave you financially exposed.
If you’re ready to explore your insurance options and make sure your side hustle is fully protected, visit our Get Started page for expert advice tailored to your needs.
The information in this article is general information only and is not intended as financial, medical, health, nutritional, tax, or other advice. It does not take into account any individual’s personal situation or needs. You should consider obtaining professional advice from a financial adviser and/or tax specialist, or medical or health practitioner, in relation to your own circumstances and before acting on this information.
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