A £400–£700 day rate vanishes the moment you can't work — and no client pays you when you're ill. We protect your real earnings, dividends included, with executive income protection.
IT roles are assessed as low-risk office work, so contractors typically get full own-occupation cover with no loading and short waiting periods. The bigger issue is making sure dividends are covered — which is where Executive Income Protection comes in.
INCOME PROTECTION — YOUR #1 PRIORITY
A £500/day contract = nothing the day you can't work
Most contractors pay themselves a small salary plus dividends — and mainstream insurers ignore the dividends, leaving you badly under-insured. We base your cover on real total earnings, so a claim actually reflects what you earn.
Cover salary AND dividend income — not just token PAYE
Executive income protection can be paid by your limited company
Own-occupation cover — paid if you can't do your IT role
Short deferred periods, because there's no sick pay to bridge the gap
≈ £6,300/mo
Example benefit on a ~£110,000 total income (up to ~70%)
Contracting through a limited company brings a high day rate but zero employee protections. Here's the exposure.
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No sick pay, no client cover
No client pays you when you're ill — your limited company simply stops earning.
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Dividends ignored by insurers
Mainstream and comparison-site policies often cover only your small PAYE salary, leaving you under-insured.
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Contract & bench gaps
Illness during or between contracts can be financially devastating with no buffer.
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High outgoings
Higher earners carry larger mortgages and lifestyles that depend on the income continuing.
Recommended Cover
The Right Protection for IT Contractors
Based on the specific risks of your profession, here's what we typically recommend — ranked by priority.
TOP PRIORITY
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Income Protection (Executive)
★ Top priority for contractors
Replaces up to ~70% of total income — salary plus dividends — if illness or injury stops you working. Can be company-paid and own-occupation.
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Relevant Life Cover
Tax-efficient life cover
Life insurance paid by your limited company as a tax-efficient benefit — often cheaper than personal cover for directors.
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Critical Illness Cover
Lump sum protection
A tax-free sum on diagnosis of a serious illness, giving you a financial cushion to recover.
Why Your Job Is Different
How We Get IT Contractors a Better Deal
Mainstream insurers often misprice or misunderstand your profession. Here's how we fix that.
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Dividend income covered
We calculate cover on salary plus dividends so you're insured on your real earnings, not a token PAYE figure.
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Executive & Relevant Life expertise
We arrange company-paid income protection and tax-efficient life cover for directors.
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High day-rate protection
We arrange substantial benefit levels to match a contractor income, with the right underwriting.
Already covered?
Two policies at the same price can pay out very differently
If you already have life insurance, critical illness or income protection, get a free plain-English review — what it does well, where it's weak, and what switching would gain and lose you.
Yes — and you should. We base income protection on salary plus dividends so a claim reflects your real earnings, not just PAYE.
Can my limited company pay for the cover?
Yes. Executive income protection and Relevant Life cover can be paid by the company, often as a tax-efficient business expense.
Do contractors get any sick pay?
No. Your company stops earning the moment you can't work, which makes income protection the most important policy you can hold.
Can I protect a £500+ day rate?
Yes. We arrange high-benefit policies — typically up to ~70% of total income — and handle the larger-sum underwriting.
Life Insurance & Income Protection
IT Contractor FAQs — Life Insurance & Income Protection
Common questions UK it contractors ask about protecting their income and family.
Can I cover my dividends as an IT contractor?
Yes — and you should. We base income protection on salary plus dividends so a claim reflects your real earnings, not just a small PAYE salary.
What is Executive Income Protection?
It is income protection taken out and paid for by your limited company. It can cover salary and dividends, often up to around 80% of total remuneration, and the premium is usually an allowable business expense.
How much does income protection cost for a contractor?
It depends on your day rate and how much income you cover, but paying through the company can make it more tax-efficient. We compare personal and executive routes.
Do contractors get any sick pay?
No. Your company stops earning the moment you can't work, which makes income protection essential.
What is Relevant Life cover and should I have it?
It is company-paid life insurance for a director, usually tax-efficient and often cheaper than personal cover. Many contractors pair it with income protection.
Can I protect a £500+ day rate?
Yes. We arrange high-benefit policies and handle the extra underwriting that higher incomes require.
Role-Specific Detail
IT Contractor-specific questions, answered properly
The operational detail that decides claims for it contractors — sick pay schemes, licences, contracts and the wording that matters.
How does IR35 status affect my income protection?
It affects how you are paid, which affects how the benefit is calculated. Outside IR35 through your own company you typically draw salary plus dividends, which needs Executive Income Protection to cover properly. Inside IR35 or via an umbrella you are usually taxed as employed, so a personal policy on gross pay may be simpler.
Can umbrella company contractors get cover?
Yes. Umbrella workers are technically employed, so income protection is arranged on your taxable earnings. Check what the umbrella actually provides first — some offer minimal statutory sick pay only, in which case a shorter deferred period is usually the sensible choice.
Am I covered between contracts if I fall ill on the bench?
Generally yes, provided the policy is in force and the illness prevents you working. Income protection responds to incapacity rather than to whether you currently hold a contract. What it will not do is pay because you cannot find a contract — that is unemployment, not incapacity.
Does a gap in contracts affect my cover or my benefit?
The cover continues while premiums are paid. The benefit is based on your established earnings pattern, so short gaps between contracts are normally absorbed when insurers average your income. Long-term reductions in earnings are worth reviewing, as benefits are capped as a proportion of income.
Can my limited company pay the premiums and claim the cost?
With Executive Income Protection, yes — it is designed to be company-paid and the premium is usually an allowable business expense. The benefit is paid to the company and passed to you through PAYE, so it is taxed at that point. Your accountant should confirm the treatment for your circumstances.
Is Relevant Life cover worth it if I am a one-person company?
Often yes. Relevant Life provides death-in-service style cover for a single director, paid by the company, normally without being treated as a benefit in kind. For higher-rate taxpayers the effective cost is frequently lower than buying equivalent personal life cover from taxed income.
What happens to company-paid cover if I go back to permanent employment?
Executive Income Protection and Relevant Life are tied to your employment by the company, so they generally cannot simply continue if the company closes. Some plans allow a personal continuation option without further underwriting — worth checking at outset if you might return to permanent work.