If you have taken out a mortgage, personal loan, or opened up a credit card in the last several years, you may have signed up for PPI and not even known what it is. But what exactly is PPI and do you really need it? PPI is short for payment protection insurance. Financial institutions sell it to their customers as an insurance that will protect them in case they lose their job or become ill and are unable to pay their loan. This type of insurance is sometimes called credit protection insurance as well as unemployment, accident or sickness coverage.