LIC's Business Protection Plan: Why Important for Businessman

LIC's Business Protection Plan: Why Important for Businessman

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We welcome you to this article on Jeevan Bima Bazaar. In today's article, we will consider planning to provide financial security to the business with the help of LIC Plans. This type of planning is called Business Protection Planning of LIC.

Since it is a Life Insurance Plan, it provides Life Insurance Protection to the business owner. LIC's Business Protection Plan strengthens the business in case of sudden death of the businessman, by providing financial help to the business and by compensating the loan taken for business reasons.

This article is being presented for the purpose of training of LIC Agents. So that he can effectively present the policy of LIC to his customers. So if you are a customer and you are reading this article then we would suggest you to contact the Professional LIC Agent of your area to get more details about this Planning.

Economic Condition of Common Indian Businessmen:

If you are a LIC Agent then you must know about the economic condition of common Indian Businessman in present time, because until you do not know the economic condition of common Indian businessman, you will not know their problems, till then you Will not be able to understand the importance of this scheme which solves these problems. So let us first understand the economic condition of the common Indian businessman.

Here we will assess the business started with small or medium capital. To run such a business smoothly, three types of capital are required. The first can be called product capital, the second as loan capital and the third as liability capital. Let us understand our point by considering a merchant of a general store as the basis.

Product Capital: A general store carries a wide range of products. Like- sugar, tea leaves, turmeric, spices, mustard oil, rice, pulses, salt, bath soap, laundry soap, washing powder, face cream, hair oil etc.

If there is a shortage of such products in these stores, it directly affects the business of the general store. A large fund is required to maintain this type of product line in a general store.

These are funds that are always locked up in the form of products in the store. This capital engaged in the business of general store is called Product Capital.

Debt Capital: Often every trade or business has customers who buy the product immediately. But they pay the cost of the product after a few days or months. Almost every business has such customers.

Now the problem of the businessman is that if he tries to break this system, then his customers leave him and go to another businessman.

The same happens in the General Store Business. In such a situation, a huge amount of the businessman's capital is stuck in the form of debt with his customers. Such capital of a businessman is called Debt Capital.

Liability capital: Often every businessman takes a loan to expand his business or to meet any loss in the business. Such debt is called Liability Capital.

This Liability Capital is of two types. The first can be that the businessman can use the money for his business by taking a loan through the banking system. The second could be that he can use the money for his business by taking loans from big moneylenders.

The businessman slowly deposits the loan taken from the bank with interest and in the same way he slowly repays the money of the big moneylender.

Business Crisis Situations:

Just think, what will be the effect on any business when suddenly its businessman meets with an accident and dies during treatment. This is a serious situation, many such situations can be faced by a business and its businessman. For the time being, we keep our points by considering this one situation as the basis.

Suppose a businessman meets with an accident. The family members admit him to the hospital for better treatment. During the course of treatment all his accumulated capital like: fixed deposits, mutual funds and all other investments are spent and finally the businessman dies despite all this financial loss. Now think and see what will be the condition of the business.

I am presenting before you a very big accident that happened during my agency period. As far as I remember this incident is around 2007-2008. There was a businessman doing a good business of a general store, who started his business by investing his father's money. One day at around 9 in the morning he had a road accident.

Situation Immediately After the Accident:

Immediately after the accident, the people around got him admitted to the nearest hospital. First aid started. It was a coincidence that at that time I was also present there. In no time, other family members also came there. Describing the situation as serious, the doctor advised for treatment in a big hospital.

Two brothers of the businessman and his wife were present there. Now it was a matter of money. A brother asked the businessman's wife to withdraw money from the bank and went to arrange the vehicle himself.

Situation in Process of Treatment:

Now the treatment of the businessman has started. The businessman used to get irritated a lot in the name of insurance during his lifetime. Therefore, the entire cost of the treatment had to be borne by the family itself. The brothers left the wife saying that they were incapable. Here the condition of the wife's brothers was almost the same. Wife's father was old, so he cooperated according to his ability.

All his accumulated capital was spent in the treatment of the businessman. He had bought a plot recently. That plot was also sold for a pittance. Even after about 46 days of treatment, the businessman could not survive and died.

Situation After Death:

After his death, about one and a half lakh rupees were left with the businessman's wife. Now the challenge before the wife was to complete the upbringing, education etc. of her two young children. But somewhere there was a belief in the mind that she would be able to complete these tasks from the general store shop. But it was not that easy either.

The eldest son of the elder brother was looking after the shop immediately after the businessman's accident. Who was not ready to leave that shop now. Here the expenses of children's school, meeting the daily needs had become quite a challenge. The moneylenders from whom the businessman had taken money, were also troubling him to get his money back.

After a lot of struggle, the wife got the ownership of the shop, but the process took almost a year. During this time the capital of the shop also got destroyed. During the year, almost all the plot money that was left with the wife was spent.

There was a lot of problem in returning the money of the big moneylenders. Here, some of the people who had bought goods on credit from the shop said that I had not taken any loan, some said that I had taken the loan but had repaid it.

Effect on Family Status:

This becomes a very sad situation. The family that once used to travel short distances in four wheelers. Now he used to complete even the long routes on foot.

The children who used to study in an expensive school, the wife somehow completed that year's education in the same school. But the very next year the children had to be enrolled in a government school.

Those children whose father used to contact an expensive doctor when they had a minor cold. Now, due to financial constraints, the mother was forced to wait for hours by dialing the number in the government hospital to get treatment for the major illness of the children.

This is the condition that the society can feel, what else would be the domestic and everyday situations. You can guess it yourself.

Benefits of Business Protection Planning:

LIC's Business Protection Plan offers two types of benefits. The first advantage is that on Maturity of the Policy a huge amount is returned. A businessman can use this huge amount to start a New Business for his children or arrange a Pension for his Old Age.

Another major benefit of this planning of LIC is when he dies due to any reason. In case of death, the corporation pays a huge amount. Which can be invested in the business and the business can be made stronger than before. Or, loans from big moneylenders or banks can be repaid in one go.

Apart from this, the expenses due to critical illness, death due to accident and permanent disability can be financially supported by paying some additional premium.

Click on the Next button given below to know in detail about the terms and conditions of LIC's Business Protection Plan.

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