Compare + more

🔥 Join the 12,000+ families who have found the right policy for them Get started →

Home › Life Insurance › Contractors
💼 Contractor Life Insurance

Life Insurance for Contractors from £9/month

No employer death-in-service benefit. No company sick pay. Over 2 million UK contractors have zero workplace safety net, make sure your family is protected if the worst happens.

  • Whole of market comparisons
  • Free & no obligation advice
  • Takes 60 seconds to compare
  • Rated 4.9★ online reviews
Compare Life Insurance →
Contractor family protected by life insurance
12,000+
Customers
£5/mo
Plans From
60s
Assessment
4.9★
Online Rating
📋 Get your quote

Find out what you'd pay in 60 seconds

Answer a few simple questions and compare life insurance quotes tailored for contractors, personal cover, relevant life policies, and business protection options.

Why Do Contractors Need Life Insurance?

If you work as a contractor, whether through a limited company, umbrella company, or as a freelancer, you almost certainly have no employer-provided death-in-service benefit. That means if you die unexpectedly, your family receives nothing from any workplace scheme.

For permanent employees, death-in-service typically provides a lump sum of three to four times their annual salary. Contractors miss out on this entirely, leaving their families exposed to serious financial risk.

As a contractor, there are several types of life insurance to consider:

  • Personal life insurance, paid from your own after-tax income, covers your family if you die during the policy term. This is the most straightforward option.
  • Relevant life policy (RLP), paid by your limited company as a tax-deductible business expense, with no benefit-in-kind charge. The most tax-efficient option for limited company contractors.
  • Key person insurance, protects your business if you die or become critically ill. The payout goes to the company to cover lost revenue and transition costs.

Most contractors benefit from a combination of personal or relevant life cover to protect their family, alongside income protection to replace their income if they cannot work due to illness or injury.

Tax advantage: A relevant life policy paid by your limited company can save you up to 50% compared to paying for personal life insurance from your taxed income. Corporation tax relief on premiums, plus no income tax or National Insurance charge, makes this the smartest option for Ltd company contractors.

For more on calculating the right level of cover, see our guide to how much life insurance you need.

Policy Comparison

Personal vs Relevant Life vs Key Person: Which Do You Need?

The right type of cover depends on your contracting structure and what you want to protect. Many contractors benefit from more than one type.

FeaturePersonalRelevant Life PolicyKey Person
Who paysYou, from taxed incomeLtd company (tax-deductible)Ltd company
Who benefitsFamily/dependantsFamily/dependantsLimited company
Tax relief on premiumsNoYes, corporation taxYes, corporation tax
Benefit-in-kind chargeN/ANoneN/A (company benefit)
Best forUmbrella contractors, soleLimited company directorsContractors whose company
Typical cost (35yr, £500k)£18–£25/mo from taxed income£18–£25/mo pre-tax from£15–£30/mo (varies by role)
Written in trustOptional (recommended)AutomaticN/A

Costs shown are indicative for a 35-year-old non-smoker. Your quote may differ based on health, occupation, and cover amount.

Important: If you operate through a limited company, a relevant life policy is almost always the most tax-efficient way to arrange life insurance. You could effectively halve the real cost of cover compared to paying from personal taxed income. Read our guide to life insurance for the self-employed.
Contractor Scenarios

What Type of Cover Suits Your Contracting Setup?

Your ideal policy depends on how you contract, your occupation, and your IR35 status. Find your situation below.

💻

IT & Tech Contractors

High day rates but zero safety net. IT contractors typically earn £400–£700 per day, yet most have no death-in-service cover. A relevant life policy through your Ltd company is the most tax-efficient approach.

Relevant life policy + income protection
🏗️

Construction Contractors

Manual work and higher-risk environments mean premiums may be slightly higher, but cover is readily available. Some insurers specialise in construction trades and offer competitive rates for site-based contractors.

Compare specialist insurers
⚙️

Engineering Contractors

Whether you work in civil, mechanical, or electrical engineering, your occupation class depends on your specific duties. Office-based design work is rated differently from site supervision or hands-on installation.

Disclose exact duties for best rate
🏢

Limited Company Directors

Operating through your own Ltd company unlocks the most tax-efficient cover. A relevant life policy is paid by the company as a business expense, saving you corporation tax, income tax, and National Insurance.

Relevant life policy essential
☂️

Umbrella Company Contractors

Working through an umbrella means you are technically employed, but most umbrellas offer no death-in-service benefit. You need personal life insurance paid from your own taxed income. Check if your umbrella offers a group scheme first.

Personal life insurance recommended
📄

Contractors with IR35 Concerns

Whether inside or outside IR35, you still need your own life cover. IR35 status affects how your income is taxed but does not give you employer death-in-service benefits. Your underwriting is based on actual earnings either way.

Cover needed regardless of IR35 status

Not sure whether to go personal or through your company? An adviser can help.

Get matched with an FCA-regulated adviser who understands contractor structures, IR35, and tax-efficient cover options.

Get a Free Quote →
Costs Explained

How Much Does Life Insurance for Contractors Cost?

Costs depend on your age, health, occupation, and how much cover you need. Here is a typical breakdown for a healthy 35-year-old non-smoking contractor with £500,000 level term cover over 20 years.

£18–£25/mo
Personal Life Insurance
Paid from your taxed income. Suitable for umbrella contractors or as additional cover. Straightforward to set up with any insurer.
£9–£13/mo*
Relevant Life Policy (Effective Cost)
Same premium as personal cover, but paid by your Ltd company with full tax relief. Effective cost after tax savings is roughly halved.
Worth knowing: Contractors should also budget for income protection, which typically costs £30–£60/month and replaces up to 60% of your income if you cannot work. With no employer sick pay, this is arguably even more important than life insurance. See our full guide to life insurance costs.

*Effective cost accounts for corporation tax relief at 25%. Actual premium paid by the company is £18–£25/mo, but the tax saving reduces the real cost to the business.

Simple Process

How It Works

1

Tell us about yourself

Quick questions about your life and health. Done in 60 seconds.

2

You evaluate quotes

Compare benefits and cover from every major insurer.

3

You decide

Pick a policy yourself, or let one of our advisers help.

Real Reviews

What Our Customers Say

James D.
James D.
Reading • IT Contractor
★★★★★
“Didn't know about relevant life policies”

I'd been paying for personal life insurance for three years before my adviser explained I could have the company pay for it tax-free. Switched to a relevant life policy and I'm saving over £200 a year. Wish I'd known sooner.

Sarah P.
Sarah P.
Manchester • Engineering Contractor
★★★★★
“Finally sorted my contractor protection”

As a site-based engineering contractor, I assumed life insurance would be expensive. My adviser found me £400k of cover for less than £20 a month. Also set up income protection which I didn't even know I needed. Brilliant service.

Anil K.
Anil K.
London • Ltd Company Director
★★★★★
“Tax savings I didn't expect”

My accountant mentioned relevant life policies but I never got around to it. Through Lifecoverfor.com, the adviser sorted everything in one call. My company pays the premiums, I get full cover, and it reduces my corporation tax bill. Win-win.

Lisa M.
Lisa M.
Edinburgh • Freelance Consultant
★★★★★
“Income protection was the missing piece”

I had life insurance but no income protection. The adviser explained that as a freelance consultant with no sick pay, I was far more likely to need income protection than life cover. Got both through my Ltd company for £38 a month total. Should have done it years ago.

Mark H.
Mark H.
Bristol • Software Contractor
★★★★★
“My accountant was impressed”

Set up a relevant life policy for £500k of cover through my Ltd company. The premiums come off my corporation tax bill and there is no benefit-in-kind charge. My accountant said it was the most tax-efficient protection he had seen. Paying £24 a month for half a million of cover.

Gemma C.
Gemma C.
Leeds • Healthcare Contractor
★★★★★
“Covered between contracts too”

I was worried about gaps between contracts affecting my cover. The adviser confirmed that my policy stays active regardless of whether I am on a contract or not. Got £350k of cover for £17 a month and the peace of mind is worth every penny.

Learn More

Related Guides

Dive deeper into the topics that matter most for contractor protection.

Life Insurance for the Self-Employed

Complete UK guide for contractors & freelancers

How Much Cover Do I Need?

Calculate the right amount for your income

How Much Does It Cost?

UK pricing breakdown

Life Insurance in Trust

Why trusts matter for contractors

Life Insurance & Critical Illness

Combined cover options explained

Level Term Life Insurance

Fixed cover for contractors
Got Questions?

Life Insurance for Contractors: Frequently Asked Questions

Yes. Unlike permanent employees, contractors typically receive no death-in-service benefit from an employer. If you died without life insurance, your family would receive nothing beyond any personal savings. Life insurance replaces that missing safety net and ensures your dependants are financially protected.
A relevant life policy (RLP) is a type of life insurance paid for by your limited company as a tax-deductible business expense. The premiums are not treated as a benefit in kind, so there is no additional income tax or National Insurance to pay. The payout goes directly to your beneficiaries via a trust, bypassing your estate for inheritance tax purposes.
Yes, if you operate through a limited company, you can take out a relevant life policy. The premiums are paid by the company and are treated as a legitimate business expense, which reduces your corporation tax liability. This is typically the most tax-efficient way for contractors to arrange life insurance.
If you are caught by IR35, your income is taxed as employment income. However, you still do not receive employer death-in-service benefits. For underwriting purposes, insurers look at your actual earnings, inside IR35 this is your deemed salary; outside IR35 it is your net income from the limited company. Either way, you need personal or relevant life cover to protect your family.
A common rule of thumb is 10 to 15 times your annual income, plus any outstanding mortgage or debts. As a contractor, consider that your income may fluctuate between contracts, so base it on your average annual earnings over the past two to three years. An adviser can help calculate the right level of cover for your circumstances. See our guide to how much life insurance you need.
Personal life insurance is paid from your own after-tax income. A relevant life policy is paid by your limited company as a business expense, making it tax-deductible against corporation tax with no benefit-in-kind charge. Both provide the same death benefit, but a relevant life policy is significantly more tax-efficient for limited company contractors.
Generally no. Relevant life policies are only available to limited company directors. If you work through an umbrella company, you would need personal life insurance paid from your own taxed income. Some umbrella companies offer group life schemes, but the cover levels are usually minimal compared to what contractors actually need.
Personal life insurance for a healthy 35-year-old non-smoking contractor with £500,000 of level term cover over 20 years typically costs around £18 to £25 per month. A relevant life policy for the same cover would cost a similar amount, but paid by the company with significant tax savings, effectively reducing the real cost by up to 50%. See our guide to life insurance costs.
Key person insurance protects your limited company if you die or become critically ill and cannot fulfil contracts. It pays a lump sum to the business to cover lost revenue, recruitment costs, or client penalties. If your company relies entirely on your personal skills and relationships, key person insurance is worth considering alongside personal life cover.
Only if you take out a relevant life policy through your limited company. Personal life insurance premiums cannot be claimed as a business expense. The relevant life policy must be set up correctly, with a registered trust and the correct beneficiary arrangements, for the premiums to qualify as a deductible expense.
Absolutely. Life insurance pays out on death, but income protection pays a monthly benefit if you cannot work due to illness or injury. As a contractor with no employer sick pay or statutory sick pay entitlement, income protection is arguably even more important than life insurance. Many contractors take both for comprehensive protection.
Your personal life insurance and relevant life policy remain active between contracts as long as premiums are paid. There is no requirement to be actively working on a contract for the cover to remain valid. If your company pays the relevant life policy premiums, ensure there are sufficient funds in the company account during gaps.
Yes, and it is strongly recommended. Writing your policy in trust means the payout goes directly to your beneficiaries without forming part of your estate. This avoids probate delays and can help with inheritance tax planning. Relevant life policies are automatically placed in trust as part of their structure. See our guide to life insurance in trust.
It depends on your specific role. Office-based IT contractors, consultants, and project managers are typically rated as standard risk. Contractors in construction, engineering, or other manual trades may see higher premiums due to occupation class ratings. Always disclose your actual day-to-day work activities to the insurer for an accurate quote.
The best life insurance depends on your structure and needs. Limited company contractors should strongly consider a relevant life policy for the tax advantages. Personal term life insurance is best for umbrella company contractors. Leading providers for contractor cover include Aviva, Zurich, Royal London, Legal & General, and Vitality. Comparing the whole market ensures the best deal for your situation.

Ready to Protect Your Family?

It takes 60 seconds. It costs nothing to check.

Compare Contractor Life Insurance →

12,000+ families protected • Rated 4.9★ online • Cover from £9/month