Does Having a Side Hustle Affect Your Life Insurance?

Side hustles are more popular than ever, giving people the chance to earn extra income or pursue their passions. But whether you’re driving for a rideshare service, freelancing as a graphic designer, or leading adventure tours on weekends, your side gig could have an unexpected impact on your life insurance. 

While not all side hustles raise concerns, understanding how your extra work might influence your coverage is key to staying protected. Let’s explore what you need to know to keep your hustle and your insurance in perfect balance.

In this article:

• What Insurers Consider When Setting Rates
• How Risky Side Hustles May Influence Premiums
• What About Low-Risk Side Hustles?
• How to Protect Yourself While Pursuing Your Side Hustle
• Frequently Asked Questions (FAQs) About the Effects of Having a Side Hustle on Your Life Insurance

What Insurers Consider When Setting Rates

Life insurance premiums are determined by a variety of factors, all of which help insurers assess your overall risk. Common considerations include your age, health status, occupation, and lifestyle habits. Each of these plays a role in evaluating how likely it is that an insurer will need to pay out a claim during the term of your policy.

Age is a straightforward factor. Generally, the younger you are, the lower your premiums, as younger individuals are statistically less likely to face serious health issues. Health is also critical, with insurers taking into account pre-existing conditions, family medical history, and lifestyle choices like smoking or regular exercise.

Occupation can influence premiums if your job involves higher-than-average risks, such as manual labor, hazardous environments, or frequent travel to dangerous areas. Similarly, lifestyle risks like engaging in extreme sports or other high-risk hobbies can increase your premiums because they elevate the likelihood of injury or premature death.

So where do side hustles fit in? Depending on the nature of your side gig, they might intersect with both occupation and lifestyle risk categories. For example, driving for a rideshare company may be considered riskier due to increased time on the road, while freelance construction or handyman work could pose physical dangers. Even a hobby-turned-side-hustle, like guiding outdoor adventures, could be flagged if it involves extreme activities.

Understanding these factors helps you see why insurers ask detailed questions about your occupation and activities. It’s not about scrutinizing your lifestyle, it’s about ensuring your policy accurately reflects your risk level and offers the protection you and your loved ones deserve.

How Risky Side Hustles May Influence Premiums

Not all side hustles are created equal when it comes to life insurance. While some involve little to no additional risk, others may raise red flags for insurers due to the potential hazards they bring. Here are a few examples of side hustles that could influence your premiums:

• Driving for Rideshare Services: Spending extended hours on the road as a rideshare driver increases your exposure to accidents. Since motor vehicle accidents are a leading cause of injury and fatality, insurers may classify this as a higher-risk occupation, potentially resulting in higher premiums or additional exclusions in your policy.
• Construction or Handyman Work: Freelance construction jobs or handyman gigs often involve physical labor and exposure to hazardous environments. Whether you’re working with power tools, on ladders, or in unfinished structures, the increased likelihood of injury can prompt insurers to view this as a higher-risk occupation, impacting your coverage.
• Adventure-Based Side Hustles: Side gigs like skydiving instruction, scuba diving tours, or rock climbing guides fall into the extreme activity category. These roles come with inherent risks, such as equipment failures or environmental hazards, which could lead to exclusions for injuries or deaths related to your work, or even increased premiums across the board.

For insurers, the connection is straightforward: the more risk involved in your side hustle, the more likely it is that an untimely claim might arise. To account for this, some insurers may charge higher premiums, exclude specific activities from coverage, or require additional policies tailored to those risks.

What About Low-Risk Side Hustles?

Not every side hustle will have an impact on your life insurance premiums. In fact, many low-risk side gigs are unlikely to raise any concerns with insurers because they don’t introduce additional personal risks.

Take freelance writing, for example. Whether you’re crafting blog posts or ghostwriting a novel, this type of work typically involves little more than a laptop and a quiet workspace. Similarly, graphic design or virtual assistant work usually consists of desk-bound tasks that don’t put your health or safety at risk. These types of side hustles are generally considered no different from traditional office work in the eyes of insurers.

Since these activities don’t expose you to physical hazards, dangerous environments, or high-stress conditions, they’re unlikely to affect your premiums. In most cases, there’s no need to worry about how these gigs might influence your life insurance. It’s business as usual.

How to Protect Yourself While Pursuing Your Side Hustle

Balancing a side hustle with your life insurance needs doesn’t have to be complicated. With a few proactive steps, you can ensure you’re fully covered while pursuing your passion or earning extra income.

• Be Upfront with Your Insurer: Transparency is key. Let your insurer know about your side gig, especially if it involves physical risks or frequent travel. Being honest ensures your policy is accurate and prevents potential issues if a claim arises.
• Consider Additional Coverage: If your side hustle increases your exposure to risks—like driving for a rideshare service or working in construction—think about adding extra coverage. This could mean adjusting your existing policy or purchasing a supplemental one to account for specific hazards.
• Look Into Supplemental Insurance: For side hustles involving specialized risks, like using your personal vehicle for work, consider additional protections. For example, commercial vehicle insurance can cover situations that your personal auto policy might not, ensuring you’re protected while on the job.

Frequently Asked Questions (FAQs) About the Effects of Having a Side Hustle on Your Life Insurance

Find a solution for what you’re looking for 

By understanding how your side hustle might impact your life insurance and taking the necessary steps to stay protected, you can pursue your passions with confidence while ensuring your loved ones remain financially secure. At Protect Your Wealth, we work with and compare policies and quotes from the best life insurance companies in Canada to ensure the best solution for you and your needs. We provide expert life insurance solutions, including no medical life insurance, critical illness insurance, term life insurance, and permanent life insurance to build the best package to give you the protection you need. 

Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today! We’re proudly based out of Hamilton, and service clients anywhere in Ontario, British Columbia, Alberta, and Manitoba including areas such as Oakville, Vancouver, Red Deer, and Winnipeg.