Private health insurance for contractors

A contractor buying private health insurance makes one decision an employee never faces: whose name goes on the policy. There is no company scheme to join, so the choice is a policy in your own name, paid from income that has already been taxed, or one bought by your limited company, which the company can normally deduct and which you are then taxed on as a benefit in kind. The cover is the same either way; the tax is not. The price underneath both is a quote, and we print no premiums because we hold none. An FCA-authorised broker can ask several insurers for that quote in one conversation, in your own name or through your company, and show you both. Fill in the form on this page to be put in touch with one; it is free and takes a few minutes.

Three things make a contractor's position different, and this page is built on them: the way you work decides who can buy the cover; private medical insurance is not the product that pays you when you cannot work; and you are underwritten on your own. It then quotes the policy terms that move the price. The site's page on private health insurance and tax covers benefit in kind, the P11D and Insurance Premium Tax in full; this one repeats only what a contractor needs, and none of it is tax advice.

Buy it yourself, or through your limited company

"Independent contractor" is American vocabulary for a self-employed worker with no employer plan, and "can an independent contractor deduct health insurance premiums" is a question about the American tax code whose answer does not carry over. In the UK the word covers three arrangements, and which one you are in decides who can buy the cover.

You are a sole trader. You buy the policy yourself. The premium is a personal cost rather than a cost of the trade, so it is not set against your profits, and there is no relief to claim.

You work through your own limited company. The company can take out the policy, with itself as the policyholder, and can normally deduct the premium in working out its taxable profit, as it would any cost of employing staff. That is the sense in which the premium is deductible. It is not the same as the cover being free of tax: as a director on the payroll you are taxed on the premium as a benefit in kind, at your marginal rate, and the company pays employer's National Insurance on it. Whether that leaves you better off than drawing the money out and buying the policy yourself depends on the company's position, yours, and the year's rates; we will not say which way it falls, and an accountant can.

You work through an umbrella company. For tax you are the umbrella's employee. If it offers medical cover, that is an employer's scheme and is taxed as one; if not, you buy in your own name.

One point from the tax page bears on a contractor more than most: the company route depends on the company contracting with the insurer. A policy in your own name that the company happens to pay for is treated differently, so settle whose name goes on the application before it is made.

Private medical insurance does not pay you when you cannot work

The cover a contractor most often goes looking for is cover against the thing an employee need not think about: a month without invoices. Private medical insurance does not provide it. A medical policy pays for treatment, private consultations, tests and surgery for conditions that can be treated and resolved, and it pays the hospital and the specialist, not you. Whether you are earning while you are treated is no part of it.

The product that replaces income is income protection, once sold as permanent health insurance: a policy that pays you a monthly sum, a proportion of your earnings, after a waiting period you choose, for as long as illness or injury keeps you from working. It is underwritten differently, priced partly on what you do for a living, and sold on its own terms. The two are routinely confused, and a contractor who buys a medical policy believing it will carry the mortgage through a long illness has bought the wrong product, and usually finds out at the point of a claim. If what you want is both, they are two policies and two decisions. The broker this site introduces arranges private medical insurance; whether they also arrange income protection is a question to put to them.

Underwriting is on you alone

An employer's scheme can be set up on a basis that disregards each member's medical history, because the insurer is pricing a group. One person buying alone is not offered that. A contractor is underwritten as an individual, which in general terms means one of two routes: full medical underwriting, where you give your history at the start and the insurer tells you in writing what it will exclude before cover begins, or a moratorium, where conditions from a look-back period are excluded automatically and whether a particular one was caught is decided when you claim. With no scheme basis to fall back on, the route matters. Ask which one a quote is on, and ask for the section of the wording that describes it. The site's page on cover with a pre-existing condition quotes the wordings we hold on both.

What the insurers' wording says about the price

We hold seven clauses from four insurers on the three terms that move a premium: the excess, a co-payment and the out-patient limit. They are from individual policies; we have not read a company wording, so whether a policy bought by a one-person company is written on the same terms is for the insurer to confirm. On all three, the premium falls as more of the cost of treatment moves to you. That is the shape of the market, not a figure.

The excess

"Benefits covered under this policy will be subject to an excess payable for each member every policy year."

— Aviva, Healthier Solutions terms and conditions (April 2025 issue), page 11, read 4 September 2026.

The same page lists six levels, from £100 to £5,000, and the excess is per policy year, not per claim. Bupa's guide works through what that means in money:

"Helen has some physiotherapy which costs £250. We pay Helen's physiotherapist £150 and we'll let Helen know that she needs to pay the physiotherapist £100 (which is the policy excess). If Helen needs other treatment during the policy year, she doesn't need to pay another excess."

— Bupa, Bupa By You policy guide (BINS 14718, 2024), page 10, read 4 September 2026.

Freedom's wording has the same mechanism from the insurer's side: the excess is deducted "from the first valid invoice we receive and from any subsequent valid invoices until the excess has been fully applied", after which "you will then need to pay the excess amount to the relevant provider" (Freedom Health Insurance, Freedom Elite Policyholder's Guide to Cover, April 2025, page 31, read 4 September 2026). On all three wordings the excess is your money, paid to the clinic in the year you claim. For a contractor the question is not which level makes the premium lowest but which you could pay in a month with no invoices, because a claim and an empty month tend to arrive together.

Not every use of a policy starts the excess. Bupa's guide:

"If you have a Direct Access phone or video assessment you won't need to pay an excess for it and the cost won't be subtracted from your outpatient benefit allowance (if either of these apply to your policy)."

— Bupa, Bupa By You policy guide (BINS 14718, 2024), page 7, read 4 September 2026.

An assessment that costs neither excess nor allowance is worth more to someone who cannot easily lose a working day. The clause is Bupa's; we have not established what other insurers do.

A co-payment as well as, or instead of, an excess

"Where an excess is chosen, you must pay your excess for eligible treatment up to your chosen level per Policy year before we provide benefit. Where Shared Responsibility (co-payment) has been selected, you must pay 25% of claims for eligible treatment up to your chosen level of Shared Responsibility."

— WPA, Complete Health Insurance Product Information Document (November 2025), page 2, read 4 September 2026.

A quarter of every eligible bill until your contributions reach a ceiling you chose: a share that rises with the claim, which is harder to budget for on an irregular income than a fixed excess. It is the only percentage co-payment in the documents we hold; we have not established whether other insurers offer one.

The out-patient limit

Out-patient is where a quick answer lives, the consultation and the tests that follow a referral, and where a contractor who wants to be back at work fast will use a policy most. It is capped. WPA's summary lists "Out-patient Treatment Consultations with a Specialist – £250 (increase with the Extra Out-patient Consultations Optional Extra)" (WPA, Complete Health Insurance Product Information Document, November 2025, page 1, read 4 September 2026). A £250 limit on specialist consultations is used quickly, and the extra that raises it raises the premium. Aviva's terms show that cutting the limit can remove cover somewhere else entirely:

"If you have chosen a reduced out-patient limit of £500 or £1,000 you are not covered as an in-patient, day-patient, or out-patient for treatment for: complications of pregnancy and childbirth, or surgical procedures on the teeth performed in a hospital"

— Aviva, Healthier Solutions terms and conditions (April 2025 issue), page 8, read 4 September 2026.

A cheaper structure is cheaper because it covers less; if you are paring a policy down, read what goes with each cut. The useful request to a broker is the same cover priced at two excess levels and two out-patient limits, in your own name and through your company, so you can see what each dial actually moves. The form on this page is how to ask, and there is no charge for it.

Common questions

How much does private health insurance cost for a contractor?

We hold no premium data, so we do not print one. The quote turns on age, where you live, the level of cover, the excess and the underwriting route, the same inputs as for anyone buying in their own name. What being a contractor changes is who pays and how it is taxed.

Can a contractor deduct private health insurance premiums?

A sole trader cannot: the premium is a personal cost, paid from taxed income, with no relief. A limited company can normally deduct a premium it pays for its director as a business cost, but the director is then taxed on it as a benefit in kind, so "deductible" is not "tax-free". The search mostly arrives from the United States, where the rules differ; none of this is tax advice, and the site's tax page has the fuller position.

Does private medical insurance pay me if I am too ill to work?

No. It pays for treatment, settled with the hospital and the specialist. The policy that pays you an income while illness or injury stops you working is income protection, a separate product with its own underwriting and its own price.

If my company holds the policy, who pays the excess?

On the wordings quoted above, the person treated pays it, to the clinic, not to the insurer. Those are individual policy wordings; we have not read a company one. Whether your company could reimburse you, and what that would mean for tax, is a question for an accountant.

If you now know which of the three arrangements you are in, and that what you want is cover for treatment rather than for lost income, what remains is the quote. Fill in the form on this page and an FCA-authorised broker will put current quotes from several insurers in front of you, in your own name or through your company, with the excess and out-patient limit priced at more than one level.