Why & How of Buying Life Insurance Policy Under MWP Act ?

At this point the woman finds that their only hope, the insurance policy proceeds, is now the legal property of her husband’s creditors.

It is quite easy to save your family from such turmoil by using a legal safeguard that was put in place by the Indian government, called the Married Women’s Property Act. The MWP act in life insurance ensures the well-being and emotional peace of your dependents even if your personal finances are in crisis.

Term insurance Add-ons

Cover against
critical illnesses

Know more

Extra payout on
accidental death

Know more

Cover for your
spouse

Know more

WHAT IS THE MARRIED WOMEN’S PROPERTY ACT?

The Married Women’s Property Act originally stated that the earnings of a married woman in India (barring citizens of Jammu and Kashmir) is to be considered as her separate property. An MWP act in life insurance amendment was in added in 1923 which made it relevant to life insurance, according to which the proceeds from a husband’s insurance policy may not be “subject to the control of the husband, to his creditors, or form a part of his estate”.

What this basically means is that if a married man buys a policywith an MWP addendum, the proceeds from MWP act in life insurancewill be effective property of his beneficiaries and not be treated as if it were a part of his estate. Therefore, the proceeds from MWP act in life insurance cannot be used to repay his debt or other liabilities even after his death. 

WHO CAN GET IT? 

Any married man can take a life insurance policy under MWP Act, including divorced persons and widowers. All varieties of policies are covered under MWP irrespective of time, age and premium amount. A married woman can also buy MWP policy in her name with her children as beneficiaries. The husband will not get anything from the policy as it will be considered a separate asset.

A life insurance policy under MWP Act is a must for self-employed individuals, business owners, those who need to take substantial amounts of credit, and those who have volatile sources of income.

WHO ARE THE BENEFICIARIES AND TRUSTEES?

The beneficiary under MWP act in life insurance could be:

1. The wife alone

2. The child/ children alone (both natural and adopted)

3. Wife and children together

The policyholder can appoint one or more people (majors) as trustees. The trustee can also be an institution, like a bank, or a beneficiary as well. The consent of the trustee must be documented along with the MWP addendum. Unlike a beneficiary, having a trustee is not mandatory and can be changed any time.

HOW CAN YOU AVAIL IT?

Getting a policy assigned under MWP Act is easy and inexpensive. In order to take the policy under the act, the proposer must fill up an MWP addendum along with the life insurance proposal form, to avail MWP act in life insurance. The MWP addendum form is available with the insurance agent or can be downloaded from the insurance company's website.Details of the beneficiaries, of trustees (if any) and the share of benefits accrued to them needs to be provided. But beneficiaries once stated in the form cannot be changed later. Also, insurance policies once declared cannot be brought under the coverage of MWP act in life insurance. 

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply