I got Rs 65 lakh from a property sale. Should I invest this amount or close my home loan?

economictimes.indiatimes.com:

Both I and my wife are 35 years old and have salaries of Rs 40,000 a month each. We have a Rs 20 lakh home loan and the EMI is Rs 16,000 per month. Last month, we got Rs 65 lakh from a property sale. Should we invest this amount or close the home loan? We have a son and a daughter. We have a 3-BHK flat in Hyderabad, two plots of land, Rs 4 lakh in stocks and mutual funds, a Rs 50 lakh term policy, Rs 4 lakh in LIC Jeevan Anand, a Rs 6 lakh Maxlife policy, Rs 2.5 lakh in EPF, and a Rs 3 lakh SBI Ulip. We have separate mediclaim policies from our employers. Naveen Kukreja, CEO and Co-Founder, Paisabazaar.com: As for your health insurance, you should purchase a cover of at least Rs 1 crore since the mediclaim policies provided by your employer might be inadequate.

Some insurers offer policies with a base cover of Rs 5-10 lakh and top-ups of Rs 90-95 lakh for relatively low premiums. You should also purchase additional term policies to get life covers of Rs 1 crore each to ensure adequate replacement income for your dependants. Also, build an emergency fund big enough to meet your unavoidable expenses for at least 6-12 months.

Park this fund in fixed deposits of scheduled banks offering yields of 7.5% and above. Use a part of your property sale proceeds to foreclose your outstanding home loan and raise your monthly investible surplus. Consult your taxation adviser and check whether using it for home loan prepayments can help reduce your capital gains tax liability.