Especially in the present climate job loss is a worry and accident or illness can happen at any time. It is wise to have income protection. This needs to stretch to all your outgoings, not just one direct debit of the many. Payment Protection Insurance needs to be looked at carefully as it is not always the best cover. On the internet there are some very competitive protection schemes and it really is worth exploring further. We offer some other options to consider too, as follows:

Know where you stand with your employer - Understand fully what cover you have if you are employed and find out what they would pay you if you were ill or had an accident and for how long. The last thing you want to do is to pay for extra cover that you already have. Usually an employer will only pay out for a certain time period so you must establish this and work out what you would do if you were still unable to return to work and the end of this time. If you are unemployed or self-employed then you do not have an employer to turn to so it is imperative that you some form of cover to protect you.

You may be entitled to state benefits - Any state benefits are paid based on your National Insurance Contributions for disability, accident and illness, so you would need to find out if you were eligible. As an employee, Statutory Sick Pay (paid by your employer) usually pays out for up to 28 weeks and at present is just over 75 pounds per week. SSP is sometimes topped up by some employers but at their discretion and can be more or less than 28 weeks. This will all be detailed in your contract of employment. Once the 28 week period has elapsed some employees may be able to claim Incapacity Benefit short-term; it is paid from the 29th week up to the 52nd week of sickness and is also just over 75 pounds.

Statutory Sick Pay cannot be claimed by anyone who is self-employed, but in some cases they can claim Incapacity Benefit instead. You can visit the Department of Work and Pensions website for full details of state benefits.

Changes to benefits - In October 2008 some changes were made to some benefits. Incapacity Benefit has been abolished and has been replaced by a new one called Employment and Support Allowance (ESA). Statutory Sick Pay is still paid for 28 weeks to employees but after that there is an assessment period of 13 weeks when it will be determined whether you are eligible for ESA and for what type. During this period you get an amount per week which is around the same as Jobseekers' Allowance - around 60 pounds per week for over 25 year olds. The self-employed, however, now go straight through to the assessment period of 13 weeks.

After the assessment there are 2 types of ESA that you may be awarded: if you are unable to undertake any kind of work you will be entitled to claim ESA of 89.50 - 102.10 pounds per week. If you are able to do some form of work you can claim ESA of 89.50 pounds until you can work and you also have to attend interviews that are work-focused to help you back into work.