Quick answer · Updated July 2026
For contractors, the decision splits on your company structure: limited company contractors should usually pay premiums through the company (corporation-tax deductible, taxed as a P11D benefit in kind plus 15% employer NIC, 2026/27) while sole traders get no deduction at all. On cover, prioritise fast diagnostics and a 24/7 GP — a healthy 35-year-old contractor should budget £45–£60/month (provider examples and myTribe data, 2025–26).
Key Facts · 2026-07-17
- Ltd company route: premiums deductible against corporation tax; director taxed via P11D; Class 1A NIC 15% (2026/27, gov.uk accessed July 2026).
- Sole traders: no deduction — HMRC wholly-and-exclusively principle (accessed July 2026).
- No sick pay means diagnosis speed is income protection: NHS median wait 12.4 weeks (May 2026) vs days privately.
- Aviva's Expert Select serves individuals and companies of 1–249 employees — a natural fit for a one-person Ltd (July 2026).
The contractor's cover shape
Contractors claim on outpatient benefits: the scan, the specialist opinion, the physio that gets you back billing. Prioritise unlimited or high outpatient diagnostics (AXA's standalone outpatient module; The Exeter's unlimited-diagnostics upgrade; WPA's scans-in-full core), a digital GP that works around client hours (Aviva and AXA are 24/7), and self-referred physio (Vitality). Take the biggest excess you can absorb — you're insuring months off work, not £300 bills.
Inside vs outside IR35, and the company question
Outside-IR35 Ltd contractors: pay through the company; even after the benefit-in-kind tax and 15% Class 1A NIC it usually beats funding from dividends. Inside-IR35 or umbrella contractors are employees for tax purposes without employee benefits — you'll buy personally like any individual, and some umbrellas offer group schemes worth checking first. Either way, PMI is not income protection: it funds treatment, not lost day rates — most contractors need both, and IP arguably first.
Who This Isn't For
If you're an umbrella employee whose umbrella offers a group PMI scheme, check it before buying personally — group terms (occasionally medical-history-disregarded) beat anything an individual can buy. And if your budget covers only one product, a contractor with dependants usually needs income protection before PMI.
Related: see our private health insurance comparison hub.
Frequently Asked Questions
Yes — it's corporation-tax deductible as a staff cost; you're then taxed on the premium as a benefit in kind via P11D and the company pays 15% Class 1A NIC (2026/27). For higher-rate directors this usually beats paying from post-tax income (gov.uk rules, accessed July 2026).
Shape beats brand: high/unlimited outpatient diagnostics, 24/7 digital GP, self-referred physio, big excess. AXA's modular build, Vitality's self-referral pathways and a high-excess Exeter policy all fit; one-person Ltds can use Aviva Expert Select (verified July 2026).