FCS Deepak Pratap Singh
Quick Summary
As you are aware, an "insurance policy" is considered a capital asset. The Institute of Chartered Accountants of India (ICAI) has suggested that life insurance policies be treated as a capital asset. "It is suggested that life insurance policies be treated as a capital asset falling within the defi
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
Permanent life insurance policies with a savings or cash value component are considered assets. Term life insurance policies, which lack a cash value, are not.
Yes, life insurance policies are legally transferable and assignable under Section 38 of the Insurance Act. The Supreme Court has upheld this right.
Under the law as it stood prior to the 2015 amendment, insurers could not unilaterally refuse assignments through policy decisions if the contract did not prohibit it. The Supreme Court found such circulars to be ultra vires the statute.
The Supreme Court held that insurance policies are freely tradable and assignable, and that insurers cannot issue policy decisions contrary to Section 38 of the Insurance Act, which mandates the transferability of policies.
Following amendments in 2015, insurers now have discretion to decline assignments if they believe the transfer is not bona fide, not in the policyholder's interest, against public interest, or solely for the purpose of trading the policy.
CAclubindia
