A detailed post by CA Nitin Kaushik on X (formerly Twitter) has reignited public conversation around a little-known but powerful legal shield that can prevent families from losing their insurance payout to lenders.

In his post, Kaushik warns that many Indian households falsely assume that buying life insurance automatically secures their family’s future. In reality, he writes, few policyholders realise that insurance proceeds can be legally claimed by creditors if the deceased had outstanding loans, EMIs, business credit or any unpaid liability. Advertisement

“The same money meant to protect a family often becomes the money used to settle old debts,” Kaushik notes in the post, highlighting how loan obligations can erode — or completely wipe out — the intended benefit of a life insuranc

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