meeny's Blog

While stock markets across the world have drawn breath as share prices have stumbled, many may be left wondering how the current economic crisis has come about.

According to Edward Jones, an investment adviser, a simplified explanation starts with the sale of sub-prime loans in the US. This type of lending was supposed to help people with a less than perfect credit rating get onto the property ladder. However, while many American firms were happy to offer these bad credit loans, it has become evident that a portion of them will not be repaid because consumers cannot afford to keep up with repayments. And as banks have tallied up how much money they have lost as a result of the unpaid debts, they have also become more wary of handing out cash, with many even cautious of swapping money between themselves.

The group noted that as this has happened, companies that depend on other banks to provide them with short term loans have been brought to their knees as institutions bunker down and withdraw loan offers in an attempt to minimise their exposure to the growing financial storm.

However, the group was quick to point that although conditions may be rough, it looks like the financial climate will brighten up over time. It reminded people that while financial crises can be difficult to cope with, they seem to be a cyclical part of the global economy, with history showing that they tend to strike every 20 years or so.

Advising those who are questioning whether the worst of this particular crisis is over, the group professed: "No one knows for sure. The economy is getting weaker almost certain to hear more bad news about the banks. Normally when we have reached such a pessimistic view of the financial outlook, things get better. We know consumer confidence is extremely low, many headlines are negative and many investors are worried. Instead of guessing about the short-term news, stay focused on your long-term goals and your strategy. The biggest issue is to panic out of fear and miss the upturn when it comes."

For those who are looking to ride on the shirt tails of a resurgent financial system, the group urged investors to keep a keen eye on companies with lots of cash in the bank to tide them over while the storm continues, pointing out that they will be able to extend their business in areas that are underserved as the weaker institutions are washed away. Most importantly, it urges people not to buy into dramatic headlines and instead look for long-term indicators of improvements to the economy as a whole, such as a boost in the housing market or an upturn in consumer spending.

At the end of August, Prudential warned that while the credit crunch seemed to have little effect on consumers on an individual level, many Britons were very worried that price rises would soon be felt. Rising food, petrol and fuel bills were found to be principal causes of concern for consumers looking to limit their outgoings on essential items.

Go to any business directory, whether on the internet or through the phone book, and you will find a whole host of personal injury lawyers waiting to take up your compensation claim for you. Most of these will deal with anything from a broken fingernail to whiplash to broken limbs. However, when it comes to cases of severe head injury, is a lawyer well versed in everything as good as an expert in the one thing?

This cannot be so. To spend all their professional lives dealing with one type of injury would surely make them know their area more efficiently. It would make them better at sealing compensation claims for the high amounts that severe head injury claims call for. But why would a head injury require a specialist as opposed to a run of the mill personal injury lawyer?

Firstly, severe head traumas are a complicated business. Even the medical professionals cannot easily give a prognosis, other than to classify as a severe injury then the chances of a full recovery are virtually nil. This leaves the need to understand the extent of the injury as much as possible and to ascertain the effects it will have on everyday life now and in the future.

All brain injuries that fall into the severe category will undoubtedly be catastrophic. Coma and/or disability are sure to follow and the prognosis may well be sketchy for several months with few favourable outcomes. A patient can be in a coma, a vegetative state or a permanent vegetative state. This is the first thing that will be established before a prognosis can be made.

In the first of these categories, the coma would probably last no longer than three to four weeks but there are no set rules to this. When the person regains consciousness, then the specialists are in a better position to access the impact that the injury has had on the patient. The vegetative state is rarely recoverable from and quality of life is guaranteed to be severely impaired. The permanent vegetative state means that there is no chance of recovery.

To assist in the prognosis, doctors will use the Glasgow Coma Scale which is a series of tests run on the patient to determine responses to different stimuli. CT scans are then used to determine the extent of the injury, the amount of pressure the brain is under from swelling and also the electrical activity. Time is also a key factor, given that the longer period of time a person stays in a coma, the less favourable the outcome.

Something that few people other than personal injury lawyers and doctors understand is the effect of a brain injury on the rest of the body. The body may look completely intact but brain injury and immobilisation for any length of time will have the knock on effect of disabling muscles and sparking extra bone growth on joints. These are often irreversible affects and will have a huge impact if the patient is able to get back to the new 'normal' life they will have.

Severe brain injuries will also affect hormone related issues. As the body and all its functions are controlled by the brain, any catastrophic brain injury will have a massive impact on the quality of life of a survivor. A personal injury lawyer would need to have advanced knowledge of all these effects in order to make an adequate claim for the patient or their family and certainly not something that our average whiplash lawyer could fully understand or do justice to.

Compensation expert Catherine Harvey looks at how a personal injury lawyer would need to be specialised to deal with brain injury victims.

Loan insurance is often extremely complicated which in the past has caused many problems and consumers being sold cover they cannot possibly hope to make a claim against. A lack of information is the main problem and as long as consumers understand what they are taking on a policy can protect them. It would provide the policyholder with an income, tax-free which was the sum they insured against when they took out the cover.

Buying a policy from a specialist payment protection provider as opposed to just adding the protection in at the time of borrowing is essential. This way you will get cover far cheaper as high street lenders charge way over the odds for the protection. They have been known to work out the protection for the length of time you take the loan over and then add this in before adding interest on top of it. This means that not only are you paying interest on the amount you are borrowing but also on the protection itself. Sometimes this means that the cost of the cheap loan can almost double.

If you get a quote for loan insurance with an independent payment protection specialist then you are quoted based on age and the amount of your loan that you want to protect. This is the figure that you would receive each month to pay your commitments. All payment protection providers will allow you to protect up to a certain amount of your loan/credit card outgoing each month.

Loan insurance would payout your income after a certain length of unemployment or of being incapacitated. This is set out in the terms and conditions as is the length of time it would payout once you had made a claim against the policy. Usually providers will state either a period of 30 and up to 90 days and then you are able to put in your claim. When it comes to paying out the policy can usually be taken to receive a payment each month for 12 months or providers might offer 24 monthly payments. After this period of time the cover would simply cease. However in the majority of cases this would be more than enough to have made a recovery or to have found work again.

If you have not got loan insurance behind you then you would have to suffer the consequences of defaulting on the loan. Secured loans on your home would mean that you are at risk of having it repossessed if you cannot catch up on the arrears while maintaining the loan repayments. If you have taken out an unsecured loan then the lender could take you to court and you could earn a County Court Judgement against yourself. In all cases your credit rating would be affected and this could mean that lenders will not allow you to borrow in the future. If you are approved for a loan you might have to pay a high rate of interest. For just a small premium each month all of this can be avoided.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of low cost Loan protection insurance (PPI), mortgage payment protection insurance (MPPI) and loan payment protection insurance.