All of your principle outgoings need to be covered, rather than just one debit.

Payment Protection Insurance (PPI) is better than nothing at all, but there are other, much better, options available, especially on the internet, at an excellent price.

1. Talk to your employer

Assuming that you are employed, you should ask your employer whether you would get paid and for how long, following illness or an accident. Additional insurance will not be required if your sick pay scheme already covers you.

The majority of employers will only cover you for a limited period, after which you will have to fend for yourself, so you need to consider how to generate an alternative income.

Many people, who are self-employed, have no safety net to help them out, so it is even more important for them to arrange adequate, alternative protection.

2. Investigate state benefits

Many people, who are unable to work due to accident, disability or illness, are entitled to state help. National Insurance Contributions fund these benefits.

As an employee, you would normally receive Statutory Sick Pay (SSP) for a period of up to 28 weeks, which is paid by your employer. The current rate for SSP is 75-40 pounds per week. At their discretion, many employers will make an additional sick payment, although you need to check with your employer to see whether it lasts for more or less than 28 weeks. This information may also be found in your contract of employment.

At the end of 28 weeks, you may also be entitled to short-term Incapacity Benefit, which, at present, is also 75-40 pounds per week. This benefit is paid from the 29th to the 52nd week.

Statutory Sick Pay is not paid to the self-employed, but they may be entitled to Incapacity Benefit instead. The Department of Work and Pensions has a website, which gives comprehensive details of state benefits.

Benefits have changed recently.

Incapacity benefit was abolished at the beginning of October, 2008 and replaced by the employment and support allowance (ESA)

Employees will still be paid statutory sick pay for 28 weeks, thereafter they will be assessed over 13 weeks to determine whether they qualify for ESA and, if they do, what type. The amount they receive over the thirteen weeks is broadly in line with Jobseekers Allowance, which is about 60 pounds a week for people aged 25 and over. The self-employed will join the 13 week assesment period immediately.

There are two types of ESA available, and, after assessment, applicants will receive just one of the two.

• Those people, who are capable of carrying out some work-related activity, will be eligible to receive ESA of 89.50 pounds a week until they can work again. Work-focused interviews will have to be attended to assist the unemployed person in their efforts to return to work.

• If the unemployed person is incapable of taking part in any form of work-related activity, then they will receive an employment and support allowance of between 89.50 pounds and 102.10 pounds a week.

The website of the Department of Work and Pensions will tell you more about state benefits.