At the age of 25 most of us live a
simple financial life. Getting into
debt probably means owing your
friend a pizza when you get paid at
the end of the month. However, as
you progress through life, your debts
become more complex and change into
monthly bond and car repayments.
Your financial life becomes more
exciting and diverse as your
responsibilities increase. You might
start a family, buy a bigger property
or even manage a side-business to
support the ever-increasing financial
demands life throws at us.
According to the South African Reserve
Bank, workers’ pay increases do not keep
up with inflation. In the first quarter of 2019,
employees in the private sector on average
received an increase of 1% while inflation is
at 4.3%. This means that the cost of living is
increasing faster than salaries. As financial
pressures mount, people look for alternative
income streams and manage multiple
earnings.
In July 2019, Henley Business School of
South Africa (HBSA) released a study titled,
“What is the future of work in South Africa?
Examining the Side Hustle Economy.” More
than 27% of respondents indicated that
they are either involved in a Side Hustle
or Side Job. Similarly, a study by Geopoll
(2017) focusing on millennials showed that
30% of South Africans have a side hustle.Considering that 20% of the formal
workforce is side-hustling, with the trend
likely to grow, long-term insurance cover
needs to adapt to the changing needs and
evolved lifestyle of many individuals in the
country. The reliance on the side hustle
is quite significant if one considers that in
some cases it can make up almost a quarter
of one’s overall income.It’s easier than ever to profit from a
side-hustle today
In the past, you had one job where you
worked in an office cubicle from eight until
five, usually the one you were trained to
do after school or by the family. All that
has changed. The freelancing revolution
is bringing more flexible jobs despite the
tough economic circumstances. People are
working multiple jobs and earning money
pursuing their hobbies and passions. It’s a
whole new world of work that needs to be
insured in a different way.Technology is the main driver behind
earning multiple incomes. Anyone with a
smart device can pursue a side hustle to
earn extra income. The internet and social
media effortlessly connect people with
similar interests, creating a market place for
savvy entrepreneurs to deliver exciting new
products and services. In some cases, the
side-hustle is simply a creative outlet for the
employee. However, when the additional
income increases beyond 20% of your
monthly income, it becomes a lucrative
venture that should be protected.Off the back of these emerging trends,
Liberty updated its income protection
offering – with a pioneering new change.Protection for your secondary income
South Africans are under-insured in general,
but the gap is even wider when it comes to
disability cover. For most South Africans, the
reality is that a disability could affect your
ability to earn an income and impact your
quality of lifestyle. Even if your ability to do
your job is only partially affected, it’s worth
protecting yourself and your family.Previously, policyholders with two streams
of income would have to insure each income
separately. This was administratively heavy.
Liberty has now delivered a more client-
centric solution. As long as the additional
income is SARS compliant and make up
20% or more of your annual income, you
can insure your primary and secondary
income under one policy at the same time.Should you become disabled and unable
to work, it replaces up to 100% of your
primary after-tax income for up to two years
after the event that caused the temporary
or permanent disability or permanent
impairment. This can be extended up to
retirement or beyond.The benefit pay-outs are as follows:- On temporary disability - 75% of the
after-tax income is paid - On permanent disability - 100% of the
after-tax income is paid - After retirement - the percentage
paid depends on the severity of the
impairment
We also know that you need all your income,
every day - even your annual bonus. If you
rely on your annual bonus to make ends
meet, you could have it covered also.Liberty Group Limited is a Registered Long-Term Insurer, the insurer of Lifestyle Protector and an Authorised Financial Services Provider (FAIS no 2409). Terms and Conditions apply.
Dual income protection for
the side hustle economy
The income protection benefit will be available from Liberty as of 1 November 20 19.
To access this new benefit, speak to your Liberty Financial Adviser or your Broker.
By Kresantha Pillay
Lead Specialist: Lifestyle Protector at Liberty Group
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