Consider the case of Mr. Rajesh Sharma who had bought a term insurance plan to financially secure his family. However, his wife and children did not get any money upon his death. This happened since Mr. Sharma’s money was claimed by his creditors for repayment of his debt for an active home loan.
You can ensure the financial protection of your family by buying a life insurance policy under the Married Women’s Property Act, 1874. Protection under MWPA act can be opted for only at the time of purchase of the policy and not at a later date.
The Married Women's Property Act, 1874 (“MWPA”) came into effect to help secure the assets owned by a woman against her husband, his creditors and relatives. MWP act is applicable for all married women of all religions.
As per Section 6 of the Act, “a policy of insurance will come into effect by any married woman on her own behalf and freely of her husband. Moreover, all the benefits, therefrom, if expressed on the face of it to be so in effect, must make sure as her discrete property, and the agreement evidenced by this policy must be valid as if made with an unmarried female.”
If you are a salaried person with a home/personal loan or the owner of a firm and have accumulated liabilities in the form of debt, your creditors will have the first claim on your policy proceeds in the event of your death.
The term policy under the MWP Act will be considered as a trust. In case of a death claim, the proceeds are handled by the trust and can only be claimed by the trustees. It cannot be claimed by creditors, relatives or form a part of the will. The trust shall be holding the claim proceeds for the benefit of the wife and/or child(ren). Hence, the financial future of your wife and children is protected.
When you buy term insurance online under MWP Act, your wife and/or children will be the only ones who will have access to the claim amount – enabling you to secure their future financially.
The beneficiaries (wife and/or children) once mentioned in the policy remains unchanged throughout the term.
Q: Can I assign a policy under MWP Act?
Ans: No, a policy covered under MWP Act 1974 cannot be assigned to someone else.
Q: Can I take loan under a policy under MWP Act?
Ans: No, a loan cannot be taken under a policy covered under MWP Act 1974.
Q: What happens if my term insurance contract is covered under MWPA act and my wife passes away before me?
Ans: If your beneficiary (wife) passes away before you, the legal heir of the policyholder shall be eligible to receive the claim amount.
Q: Can I have more than one plan under MWPA?
Ans: Yes, you can have more than one plan under the MWPA act.
Q: Can I assign my existing life insurance policy under MWPA act?
Ans:No. Once a policy has been issued, it cannot be assigned under MWPA at a later date. You have to opt for MWPA only at the inception.