Payment protection insurance, or PPI, is insurance that will pay out a sum of money to help cover your monthly repayments on mortgages, loans, credit/store cards or catalogue payments if you are unable to work. This could be because you have an accident or sickness, become unemployed through no fault of your own, or if you died.
This means that the insurance company will pay the monthly repayments (or a percentage of them) on your behalf for a fixed period of time if you become unable to work. It is sometimes known as ASU (accident, sickness and unemployment) insurance, Account Cover or Payment Cover.
PPI is not the only product designed to protect against loss of income, and may not always the most appropriate – see Protecting income or borrowing. Although PPI can provide worthwhile cover against unexpected changes in your personal circumstances, you should bear in mind its limitations and exclusions.