Income protection for contractors and should you take it out? When we look at how income protection works, this is an insurance policy that provides you with a substitute income if you’re unable to perform your contracting work because of injury or illness. Most importantly, contractor income protection insurance (UK) normally pays out until you retire, you pass away or you return to work.

However, there is also short-term income protection for contractors, where the policy pays out for a maximum of one or two years. Certainly, this shorter-term income protection policy is often cheaper.

Income protection for contractors, otherwise known as contractor sickness insurance, was formerly called permanent health insurance. However, with this new type of policy, there are many benefits of Income Protection Insurance for contractors.