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Shane Craig, managing director of Paymentcare, said while he welcomed the Competition Commission's recent investigation into PPI he said there was a danger that some consumers may be scared away from the product.

Mr Craig said it was during times of economic uncertainty that PPI demonstrated its true value.

He said: "Following the Competition Commission's 5 June report on the PPI market, the product has become the pariah of the personal finance world. It is quite right that the unfair advantage enjoyed by lenders has been exposed, but it is when job loss strikes that genuine PPI really comes into its own.

"Those people who have unexpectedly lost their jobs who have loans and credit card balances to pay could be facing a very difficult period if they have nothing to fall back on."

Mr Craig said standalone independent protection was still a genuine alternative to the type of limited protection offered by some loan and credit card providers.

He said: "Borrowing without protection may be a risk that some are prepared to take but if security can be bought for a few pounds, it is an unnecessary risk and one they may regret."