In fact, according to moneysupermarket.com, almost a quarter (24 per cent) of Brits don’t know what Payment Protection Insurance (PPI) is and just 14 per cent already have PPI and consider it crucial.

And, says moneysupermarket.com, these statistics are concerning, considering that unemployment is at an 11 year high and the average household debt stands at around £60,000.

Life insurance policies such as critical illness insurance can also prove vital if someone finds they are unable to work due to being diagnosed with a serious illness. Commenting, head of protection at moneysupermarket.com, Emma Walker said:

“There is a common misconception Critical Illness Cover (CIC) is expensive; however, at around £30 a month it seems a sensible addition to finances and could provide peace of mind. CIC can cover mortgage or loan repayments, pay for private nursing care or treatment, or even fund a holiday to recover. We’re all feeling the pressure on our finances at the moment and the additional money could make all the difference.”

However, as mis-sold Payment Protection Insurance is common, Ms Walker warns: “It’s crucial to read the small print thoroughly and to be accurate when giving information at the application stage; non disclosure is one of the main reasons a CIC policy won’t pay out. Like most other protection plans exclusions and caveats are commonplace.”

© Fair Investment Company Ltd