Income Protection for IT Contractors
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.
Key facts at a glance
- Profession
- IT Contractor
- Recommended priority cover
- Income Protection (Executive)
- Typical benefit
- ≈ £6,300/mo — Example benefit on a ~£110,000 total income (up to ~70%)
- Adviser
- FCA-regulated, whole-of-market UK broker
Reviewed by the LifeInsuranceForMe advice team · Last updated June 2026 · FCA-regulated UK broker
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.
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
Why It Matters
The Risks IT Contractors Need to Plan For
Contracting through a limited company brings a high day rate but zero employee protections. Here's the exposure.
No sick pay, no client cover
No client pays you when you're ill — your limited company simply stops earning.
Dividends ignored by insurers
Mainstream and comparison-site policies often cover only your small PAYE salary, leaving you under-insured.
Contract & bench gaps
Illness during or between contracts can be financially devastating with no buffer.
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.
Income Protection (Executive)
Replaces up to ~70% of total income — salary plus dividends — if illness or injury stops you working. Can be company-paid and own-occupation.
Relevant Life Cover
Life insurance paid by your limited company as a tax-efficient benefit — often cheaper than personal cover for directors.
Critical Illness Cover
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.
Dividend income covered
We calculate cover on salary plus dividends so you're insured on your real earnings, not a token PAYE figure.
Executive & Relevant Life expertise
We arrange company-paid income protection and tax-efficient life cover for directors.
High day-rate protection
We arrange substantial benefit levels to match a contractor income, with the right underwriting.
"Most brokers only looked at my £12k salary and ignored £90k of dividends. LifeInsuranceForMe insured my real income and even set it up through my company. Sorted in 48 hours."
FAQs
IT Contractor Insurance — Your Questions Answered
Life Insurance & Income Protection
IT Contractor FAQs — Life Insurance & Income Protection
Common questions UK it contractors ask about protecting their income and family.
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What cover are you interested in? (Select all that apply)
🛡️ Life Insurance
Lump sum for your family if you die
💷 Income Protection
Replace up to 70% of income if ill
❤️🩹 Critical Illness
Lump sum on diagnosis
🏠 Mortgage Protection
Clear your mortgage if you die
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