📖 IT Contractor Guide
The IT Contractor’s Guide to Income Protection
A great day rate counts for nothing the week you cannot work. Here is how contractors protect their real income.
Get a Free Quote →The classic contractor mistake is buying cover that only looks at the small PAYE salary your accountant pays you, while ignoring the dividends that make up most of your income. On paper you are insured; in reality you are badly under-covered. Putting that right is usually the single biggest improvement we make for contractors.
The fix has a name — Executive Income Protection — and it brings a tax angle worth understanding.
Quick Answers
IT Contractor Cover — Quick Questions
Why are so many contractors under-insured?
Because standard cover counts only PAYE salary. If you draw, say, £12k salary and £80k dividends, a salary-only policy insures a fraction of your income.
What is Executive Income Protection?
Cover taken out and paid for by your limited company. It can include salary and dividends, often up to around 80% of total remuneration, and the premium is usually an allowable business expense.
Should I look at Relevant Life too?
Many contractors do. It is company-paid life cover for a director, generally tax-efficient and often cheaper than buying personally.
Can a high day rate be fully protected?
Yes. We arrange the larger benefits a strong contractor income needs, and handle the extra underwriting that comes with them.
Good to know: This guide is general information to help you weigh up your options — it is not personal financial advice. Cover, premiums, exclusions and any tax treatment depend on your individual circumstances and the insurer’s assessment. LifeInsuranceForMe is an FCA-regulated insurance broker; speak to us for a recommendation tailored to you.