At any time, you could find yourself unable to work due to long term illness; injury; or, involuntary unemployment. And this is where payment insurance can help, by providing a tax free, monthly amount that will help towards replacing your lost earnings.

As providers’ payment insurance policies vary as to how long the cover will run for, so does the period you have to wait before you can make a claim. Generally, this will be anywhere from thirty to ninety days after the first day you are not at work. The protection insurance would then continue to provide financial security and peace of mind for between 12 and 24 months.

Do always ensure that you fully understand the cover you are buying so that you get the financial protection you require, and never feel pressured in to taking the insurance when taking out borrowing. Some mortgage lenders may coerce you into buying their mortgage payment protection insurance (one of the products in the payment insurance portfolio) along with your mortgage, for example.

If this happens, make sure you find out how much their cover will cost, and then shop around. Most homeowners can find savings of up to 40% by going with a standalone provider such as the ethical British Insurance. Protection insurance premiums with British Insurance can start from as little as a few pounds a month for every £100 worth of cover required – a cost that most can accommodate within their budget.

Not everyone is eligible to take out the cover, so look at the exclusions. It is the exclusions which can stop the insurance being right for you. For instance, if you only work part time, suffer an ongoing illness, or are of retirement age then you would have to think twice before taking out the cover.

Before you buy your payment insurance policy, do check with your employer that you are not covered by in-house scheme against the insured events. And also check any cover provided by any other policies you hold to be sure that you’re not duplicating the protection with an existing policy.