HUF

HUF (Hindu Undivided Family) Insurance scheme

1. The HUF will not come to an end even after the death of a Karta for up to four generations. If the Karta passes away, the oldest surviving male member can be appointed as the new Karta.
2. Under the tax laws, even Jain and Sikh families can set up HUFs. Typically, an HUF will consist of people who have lineally descended from a common ancestor, and will include their wives and unmarried daughters.
3. A woman can become a Karta provided she is the daughter of a coparcener or Karta. However, the married daughter, wife, daughter-in-law cannot be a Karta in their in-laws’ family. The Hindu Succession Act, 1956 overrides Hindu Law.
4. The Hindu community has largely believed in the concept of joint families, joint income and joint property that is shared and enjoyed by all the members of the family. This concept is now recognized as a legal expression in the form of the Hindu Undivided Family (HUF).
5. The family is headed by a patriarch, the Karta, usually the oldest male, who makes decisions on economic and social matters on behalf of the entire family. While the senior members are called the Karta (manager), the male members are known as coparceners, and the females are referred to as members.

Insurance aspect:

1. However, the daughter will only be a member in the HUF of the family she marries into.
2. The Karta of an HUF can propose for an insurance cover on his own life. He, in his capacity as karta, can propose buying insurance on the life of the coparceners. The coparceners cannot propose buying insurance where the Karta is 'life to be insured'. The Hindu Succession (Amendment) Act, 2005 (39 of 2005) did away with the gender discriminatory provisions of the Hindu Succession Act, 1956 giving a daughter the same rights of a coparcener as a son.

Benefits:

1. Double benefit of 80C
2. 4 generations can be covered
3. Grandfather’s HUF will get the benefit of 80C on members’ life insurance policy