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Payment protection insurance

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  • Protect your income if you're out of work

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What is payment protection insurance?

Payment protection insurance (PPI) covers your monthly debt repayments on things like loans, mortgages and credit cards if you’re unable to work.

How does payment protection insurance work?

PPI policies are designed to cover a single debt, and if you're unable to work your insurer will pay you for a set period of time - which you'll use to make your repayments. These policies are usually short-term.

income protection illustration

What does payment protection insurance cover?

 A payment protection policy generally covers your repayments if you:

  • Become too unwell to work

  • Have an accident and can't work

  • Are made involuntarily redundant

Do I need payment protection insurance?

Payment protection insurance is worth considering if you think you wouldn’t be able to make your loan, mortgage or credit card payments if you have to stop working. However it might not be necessary if you have savings or other sources of income on which you can rely.

How do I get a payment protection insurance quote?

  • Tell us about yourself

    Including what you want to protect, over how long, and a few details about income and employment

  • We’ll search the market

    With our partner ActiveQuote, we’ll find the best deals for you

  • Compare your results

    We’ll show you the results of your search, so you can compare deals from a range of providers

What’s the difference between PPI and mortgage protection insurance?

Mortgage payment protection insurance (MPPI) and payment protection insurance are both types of income protection, and they’re each intended to help you repay certain debts. However some mortgage payment protection policies are targeted towards homeowners, so they’ll payout enough to cover your mortgage payments as well as a certain extra percentage to go towards household bills.

MPPI policies can also offer cover lasting until you reach retirement age, while payment protection insurance is usually sold on a shorter-term basis as it’s covering other debts.

What are the alternatives to PPI?

If you’re looking for alternatives to PPI, you may want to consider:

  • Mortgage payment protection

    Which covers your mortgage payments if you can’t work

  • Sick pay

    Using your sick pay if you get it

  • Savings

    Using your savings if you have enough

  • Critical illness cover

    Which pays out if you become critically ill

In 2011 a scandal broke about the PPI industry as many financial institutions had mis-sold it to customers, or implied that it was a necessary part of a bundle with their credit card or loan product. As a result billions have been paid out in compensation, giving PPI a bad reputation – however it can still be a useful product in the right circumstances.

Before you take out payment protection insurance, keep in mind that your policy may not cover you in the following circumstances:

  • For the duration of your deferral period, usually for the first week to 90 days

  • If you contract certain illnesses – these will be listed in the policy documents

  • If you have any pre-existing medical conditions

  • If you’re retired

  • If you’re unemployed 

Most insurers have a deferral period at the start of your policy, during which you can’t make a claim – this will normally last between a week and 90 days. Policies that don’t have this, or that have shorter deferral periods, are likely to be more expensive.

Most insurers won’t cover claims relating to an illness you already have before taking out the policy, such as diabetes or a heart condition.

You work hard to earn your money, and we don’t think you should waste a penny of it paying over the odds on your household bills. That’s why at MoneySuperMarket, we’re on a mission to save Britain money.

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You might be wondering if we work with all the companies in the market, or if our commercial relationships with our partners might make us feature one company above another. We’ve got nothing to hide, and we want to give you clear answers when it comes to questions like these, so we’ve pulled together everything you need to know on this page.