Rep confused old lady, pocketing first insurance payment (7)
I believe the answer is:
premium
'payment' is the definition.
(premium is a kind of payment)
'rep confused old lady pocketing first insurance' is the wordplay.
'confused' is an anagram indicator.
'old lady' becomes 'mum' (I've seen this before).
'pocketing' indicates putting letters inside.
'first insurance' becomes 'i' (1st letter of 'insurance').
'mum' enclosing 'i' is 'mium'.
'rep' with letters rearranged gives 'pre'.
'pre'+'mium'='PREMIUM'
(Other definitions for premium that I've seen before include "Extra cost of something in short supply" , "cash needed for cover charge" , "bonus payment" , "Award" , "Amount payable for insurance etc" .)