In some cases, it is possible occasionally to realise that your entire organisation’s operations and profitability could be put at risk should one or two key employees be unable to continue in their jobs.

It is a sobering thought that some organisations may be perfectly capable of continuing without significant interruption should the CEO, CIO or CFO be unable to continue in their jobs but may be brought to a standstill by a single individual further down the establishment hierarchy.

How can that happen?

At one time, organisations may have had strength-in-depth in terms of specialist knowledge and skill sets.

Many conducted succession and continuity planning and may have been reluctant to have critical knowledge and/or skills resident in only a single individual or two in the organisation.

However, over time these disciplines may have been put under pressure by economic constraints and the need to keep staffing levels to a bare-bones minimum level.

What that means is that in the event a key person in your organisation becomes critically ill or even dies, you may not necessarily have two or three fully qualified successors standing by ready to take his or her place.

The result may prove to be literally a showstopper for some organisations.

What can be done about it?

Succession planning is important but it may not prove to be an immediate solution if you find yourself exposed.

Should the worst happen, you may be forced to bring in emergency specialist skills from outside and that may prove to be extremely expensive.

Keyman insurance is a form of cover that may provide you with an emergency and substantial cash injection to help you cope with the financial consequences for your organisation, should you need to cope with such a problem.

How would you know where your risks are?

The identification of critical single points of failure in your organisation may not necessarily be easy.

Risks can arise in the most unlikely areas of your business and may have evolved slowly and unnoticed over time.

There are analysis techniques that can be adopted to identify potential problems of this sort, however, their application is sometimes best entrusted to specialists and experts in the field. Apart from anything else, they may be able to ask those objective and obvious questions that in-house personnel may sometimes miss due to being simply too close to events.

Where are the classic risk areas?

This may vary significantly from one company to another but problems may arise particularly easily in areas such as:

• information technology;
• engineering and specialist machine maintenance;
• customer account management (clients who won’t deal with anyone else etc);
• accounts;
• design and manufacturing

This list is far from exhaustive and there may be other areas of exposure in your organisation.

But the State safetynet is unlikely to provide as much help as generally imagined. Most homeowners will not receive any State assistance at all because they have either a full-time working partner or savings totaling over £8,000. Even those eligible for State support will not get any help with capital repayments.They will only receive assistance with interest payments on mortgages of up to £100,000 – and even this will not be available for the first nine months if they have taken out their mortgage since October 1995.

Nevetheless, it is possible to take out Mortgage insurance to protect the monthly mortgage payments. Mortgage Insurance or Mortgage Payment Protection Insurance (MPPI) can be used to cover your mortgage outgoings if you are unable to work due to illness, injury or involuntary unemployment. In such circumstances it will typically pay out for a maximum of one year.

Mortgage insurance policies are available from a number of places but it is generally accepted that mortgage insurance which is obtained direct from the lender is the most expensive.

The amount of benefit offered by mortgage insurance companies does differ with £1500 per month and £2000 per month being the overall maximum allowed. Some insurers will allow you to insure your mortgage payment and then add say 25% extra cover on top to cover things like life cover and buildings insurance.

There is, however, normally a waiting period between when the claim is made and when the first payment is received.Typically this is 30 days, but with some policies it is 60 days whilst with others, particularly those from independent mortgage protection providers there is an option to backdate cover to day one.

Mortgage Insurance MPPI can cover the self-employed, but it will normally only pay out if they cease trading altogether, as opposed to merely experiencing a quiet period. This can therefore make it of questionable value. You are under no obligation to buy your policy from your mortgage lender, although they are most unlikely to volunteer this fact. Indeed, they will probably automatically include its premium in your mortgage quote, which is a very underhand tactic. It is important to realise that looking elsewhere cannot jeopardise your chances of being granted a mortgage.

If you find that you are simply too busy during the house buying process to look elsewhere then make sure that you do so when things have quietened down, because switching to a Mortgage Payment Protection Insurance policy offered by a specialist intermediary could save you thousands of pounds over the mortgage term

There is a way you can protect yourself against mortgage payments if you are unable to work due to injury, illness or redundancy. The mortgage payment insurance will pay the monthly instalments on your behalf for a specific period of time. Taking out a mortgage payment insurance policy will help with preventing serious debt, bad credit rating and general stress or worry. You can take out mortgage payment insurance either with your mortgage company, or separately from one of the numerous financial companies who offer the service. It is highly advisable to shop around for the best deal and a mortgage payment insurance policy which will fit your needs perfectly. Most people think that it’s always the case that mortgage payment insurance policies are expensive, whilst this is true in some cases, there are some great deals to be had, and it’s all about finding them.

Mortgage payment insurance can also be known as mortgage payment protection insurance or MPPI. They can be complicated to apply for and seem unnecessary, but there is no harm in asking for help with understanding all the aspects of MPPI’s. For people who don’t bother with mortgage payment insurance, they are at high risk of getting into bad debt if they lose their job for some reason and cannot afford the mortgage repayments. Even if they only lose their job for a short period of time, it can seriously affect one’s finances. Mortgage payment insurance policies are available from high street banks, specialist finance firms and online financial companies.

We live in a world with a quickly deteriorating financial climate, in this day and age it is no longer safe to say that you will be able to find work for your entire life, or that you will be able to save enough money aside for a rainy day. If we also consider that three out of every ten people will face some form of illness which will leave them unable to work for an extended period, then we have to assume that insurance is now the only possible way to safeguard our homes, should we fall fowl of either loss of work or serious illness.

Payment protection insurance is specifically designed to ensure that our home repayments are covered should we find ourselves out of work and unable to secure a new job, suffering from a long term illness forcing us to lose our income, or being involved in a serious accident which renders us unable to work and secure an ongoing income. More specifically, payment protection insurance is targeted at protecting our homes should any of these mishaps befall us, with the insurance provider meeting our monthly mortgage repayments on our behalf for up to 24 months, although 12 months is the more usual timeframe.

A traditional payment protection insurance policy will protect the policy holder against accident, sickness and unemployment, although some people may be offered accident and unemployment only, or simply sickness and unemployment. This extra flexibility in policies is great for those people who already have an insurance policy in place which covers them for one of the three normal risks covered by payment protection insurance, as there is little point in taking out double cover, as only one policy would pay out at any one time.
Most usually, the payment protection insurance policy will contain two standard clauses, which are used to ensure that fake or erroneous claims are not paid out. The first of these is a 30 day deferment period, which states that no claim will be paid for the first 30 days from the initial date of the claim. The second clause is the back to day one clause, which states that all claims will be paid the monies owed for the 30 day deferent period once they become active claims.

Every home owner owes it to themselves and their families to ensure their property is protected should they find themselves on hard times through bad health or just plain bad luck. Speak to your insurance broker for more information about payment protection insurance.

Ask yourself a question, what would you do if you suddenly found yourself unexpectedly unemployed? How long could you realistic continue to pay your monthly house payments with no income? How about if you fell sick? Or if you were involved in a serious accident and were unable to work for the foreseeable future? For most people the answer to this is probably going to be a short as a few months, so what happens then? The lenders come knocking on your door and politely tell you that they are taking your house away.

Income protection insurance removes this threat across the medium term, and will pay your monthly house payments for a period of between 12 and 24 months. Depending upon your age and occupation, income protection insurance can cost as little as a night out in your local pub each month; there really is no reason why any homeowner should face the repossession of their property when income protection insurance is so easy to obtain and so cheap to purchase.

Standard income protection insurance will cover you for three specific eventualities. Firstly you will be protected from loss of earnings due to involuntary unemployment, secondly you will be covered should you fall sick for an extended period, lastly you have protection in place to take care of your mortgage should you be the victim of a serious accident that sees you unfit to return to work over the long term, or in more extreme cases indefinitely. Each of these situations can occur completely unexpected during the normal working life of any individual. Indeed, if we examine population statistics, it becomes apparent that a very high percentage of people are going to suffer at least one of these set back during their life time. Income protection insurance really should be considered a mandatory product for almost everybody, regardless of the age, social background or occupation.

If you feel you may benefit from taking out an income protection insurance policy, then it is recommended that you contact a professional insurance broker. Your broker will be able to assess the level of cover you require and advise you upon the best income protection insurance product available to meet your needs. Don’t delay, avail yourself of a good income protection policy today, and rest safe in the knowledge that your home will be protected whatever life chooses to throw at you.

So what might be excluded from mortgage protection insurance?

• Pre-existing medical conditions – any condition you were already suffering from when you took out the policy, whether you had received treatment for it, or just whether it could be proved that you knew about it.
• Unemployment, if you knew you were likely to lose your job, or be made redundant, when you took out the policy. It is also excluded if your work was temporary or seasonal. You may also be excluded if you are not registered as unemployed or not seeking alternative employment – which seems rather hard if you have been paying your premiums!
• Loss of your job if you left work voluntarily or were required to leave for disciplinary reasons, or because of industrial action.
• If your “sickness absence” from work is due to conditions which might be regarded as “psychological” or self-induced. These could include stress, backache or depression. These conditions could be excluded even if you had certification from your doctor that you were unfit to work.
• Any disability for which you had received treatment or advice during the preceding year, or for which medical evidence has not been provided by a registered medical practitioner.
• Pregnancy. This should not be a major problem if you can claim full maternity benefits.

Not all of these are excluded by all mortgage protection insurance policies, but all are excluded by some! It can be very hard to discover in advance exactly what is excluded. To avoid getting a nasty shock when it’s too late, use a broker who is experienced with these types of policy to help you find the best policy for your own needs.

You may find that when you take out a mortgage, your lender automatically offers you MPPI. Sometimes they try to give you the impression that it’s obligatory. But don’t let yourself be bullied into taking out their policy unless you are sure it’s the best one. You can often get a better deal by shopping around.

Maybe you feel you don’t want to do this. Taking out a mortgage can be a lengthy, exhausting and time-consuming experience. It’s incredibly tempting to grab the policy the lender offers you, rather than start another lengthy process. Especially if you don’t really know what you’re looking for.

However you could really save money by shopping around. Of course you want to find the lowest premium – but premium levels are not the only factor. Here are some pointers to help you know what else to look out for.

• Unlike most other forms of insurance, mortgage protection insurance policies usually ignore age, health, smoking/non-smoking etc. Just a few give reduced rates for younger age-groups – under 30 or under 40 – so if this applies to you, it’s worth checking this out.
• When will it pay out? Most mortgage protection insurance policies don’t start paying out till a month, or sometimes two months, after the problem (accident, redundancy, or whatever) starts. Now there are a few that backdate the payments to day 1, so you may prefer to choose one of those.
• What is the payout term? Most mortgage protection insurance policies limit their payout term – usually to 12 months. They reckon that most people will have found another job, recovered from their illness, or obtained state benefit by then. But this doesn’t always happen. Try to find one that will pay out for as long as possible – at least two years.
• What is the maximum payout level? Some mortgage protection insurance policies put a ceiling on the amount of their monthly payment during the payout period. If you have a bigger mortgage, or if interest rates have risen, this amount might not be enough to cover your repayments. Try to find out what the repayment policies are.

Sometimes it can be quite difficult to find out exactly what the payment policies are on different mortgage protection insurance policies. It’s worth consulting a broker to make sure you find the best possible deal.