STAR UNION DAI-ICHI LIFE INSURANCE CO. LTD.

Hindu Undivided Family (HUF)

Concept of HUF

The term 'Hindu Undivided Family' has not been defined under the Income Tax Act. It is defined under the
Hindu Law as a family that consists of all persons lineally descended from a common ancestor, including wives
and unmarried daughters. This means membership of a HUF does not come from a contract but from status of
the person in such families.
A HUF cannot be formed by a group of people who do not constitute a family. Lineal descendents with a
common ancestor is a must.

Which income is regarded as HUF income?

Income derived from the following heads may be regarded as HUF income if the same has been classified
under HUF.
1. Profits from business or profession
2. Income from house property
3. Capital gains
4. Income from other sources
Since the HUF is a separate entity, it cannot earn income from salary.
All income that arises on the investment of the HUF's funds and utilization of its assets is regarded as income
and is separately assessed and taxed.
Insurance under HUF
Insurance under HUF is allowed only on the life of the Karta.
Proposals on the life of co-parceners or members may be allowed only if the Karta is uninsurable.
In all such cases, the Karta will be the Proposer.
HUF proposing on the minors is not encouraged as the beneficiary in that case is the HUF and all its
members / coparcerners.
If coparceners apply for individual insurance on the basis of income of HUF, it will be treated as separate
insurance.
Payment of Premium will always be through HUF Funds.
Payment of premiums partly out of HUF Funds and partly out of non HUF Funds is not permitted.
The Insurance under H.U.F. would belong to and become the Assets of the HUF.
STAR UNION DAI-ICHI LIFE INSURANCE CO. LTD.

Neither the ‘Karta’ nor any member of the HUF can take out policies to be financed from HUF income,
seeking the benefits to himself or his immediate dependants.
The contractual positions would be enumerated in the policy document stating clearly “that the policy
belongs to the HUF entirely and the policy moneys to be paid only to the ‘Karta’ or in case he predeceases
the term of the contract or for other intermediate dues if any, the policy moneys shall be payable to the
then ‘Karta’ or a surviving person, who reaches the status either by seniority in age or other legal
considerations.”
The “Karta” or any other member of HUF cannot take a policy under section 6 of Married Women’s
Property Act as there would be cross-violation of purpose and the HUF policy is to protect the Joint Family
whereas M.W.P. Act protects the interests of the individual member, his wife and children.
Submission of Proposals

Proposal should clearly mention “ HUF Proposal”.

Status of proposer as “KARTA- HUF” should be clearly mentioned against his name
Proposal has to be signed by “KARTA - HUF”
HUF addendum should be attached alongwith the proposal
PAN (HUF) or Copy of ITR (HUF) to be attached to indicate existence of HUF.
Income proof of HUF should be submitted.
Particulars of insurance on the life of proposer Karta / Life to be Assured and the details of Insurance on
the lives of family members being financed through HUF income is required.
A proposal under HUF will be subjected to the usual conditions applicable for an Individual assurance,
including medical and financial underwriting aspects.
If Karta and Life to be Assured are different, reason for obtaining insurance on others’ lives is to be
obtained from the Karta.
Where the proposal is received from the Karta to cover the risk on the life of a Female member: a letter
should be obtained from the other coparceners and all other members to the effect that they have no
objection in effecting the policy on the life of that particular female member out of the HUF Funds. The
Karta should also clearly indicate as to why the particular life is being chosen in preference to the
coparceners and the other members. In all these cases, it is necessary to insist on special Moral Hazard
Report from the Bancassurance Manager and above.
Policy effected under HUF does not have the provision for appointment of nominee etc. The Karta alone
can receive the policy monies.
 STAR UNION DAI-ICHI LIFE INSURANCE CO. LTD.
Addendum to Proposal:
(To be completed when the policy is to be financed through Hindu Undivided Family Income)
Answers must be written in words. Strokes of the pen or dots or dashes will not be accepted as valid replies .

Proposal Number:

Name of the Life to be Assured: Date of birth

1. State the object of this Insurance_____________________________________________________________________

2. Is it to be financed out of HUF Funds : □ YES □ NO

3. Details of the Bank Account:

Name of the Bank: ______________________________________________________________________________
Account Number __________________________________Type of Account: _______________________________

4. Is HUF being assessed for Income-Tax? □ YES □ NO

(Please provide copy of HUF PAN and copy of latest HUF ITR)
5. Details of Co – Parceners/Members of the HUF:
Name Relationship to Karta (Co-Parcener/Member) Gender & Age

(Use separate paper to provide these details if space is not sufficient.)

6. If Life to be Assured is different from the Karta, reason to be mentioned as to why the Karta is not proposing on his
own life.

Signed at ____________ this ______________day of _______________20__

I agree to issue of Policy and Payment of Premium as proposed.

Signature of the Karta of the HUF._________________________________________

Signature of Witness: _________________________________________________
Name and address: __________________________________________________
___________________________________________________
___________________________________________________
Occupation ____________________________________________________
NOTE:
This policy is proposed for the benefit of HUF so as to form an HUF Asset and all the premiums paid under the Policy are to be
paid out of HUF Funds, the Policy will belong to the HUF and consequently the Life Assured will not be entitled to make an
assignment or nomination under this Policy nor will he be entitled to draw any loan there under or surrender value benefits,
except under special circumstances with the consent, in writing of all other members of the HUF with the provision that all the
members are majors and competent to contract.