Married Women's Property Act, 1874

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 active home loan.  

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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 the MWP Act can be opted for only at the time of purchase of the policy and not at a later date.

What is the Married Women’s Property Act?

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 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.”

How does MWP Act Protect my Family?

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 plan under the MWP Act is considered a form of trust. In event of a death claim, the proceeds are handled by the trust, then, only be claimed by the agents or the trustees. It cannot be claimed by relatives, creditors, or the proposer’s estate. The trust is liable to hold the claim profits for the assistance of the children and/or wife. Now, the financial future of your family (children and wife) is secured.

When you purchase a term plan online under MWP Act, your children and/or wife will only have the access to the amount of claim that enables you to protect their future.

This is also a smart idea for a joint family, where there might be various complications in property ownership. Some of the fine prints are not being listed thereby, increasing the possibility of disputes in the family over property and money. In such situations, a plan covered under this Act will give a rich idea to the nominee/beneficiary. 

The receivers (children and/or wife) once stated in the plan remain unaffected throughout the tenure. After the issuance of the policy, it will not be considered as a share of the business assets of the insured. This simply means that nobody exercises control over the amount of benefit in the case of the insured’s death (except the wife of the life assured and children). 

Who Should Opt for MWP Act?

  • Businessman and salaried individuals with loans or liabilities.

  • People who want to protect their wife/children from creditors/relatives who might have fraudulent intentions.

  • People who live in a joint family setup where there could be several complications in the ownership of property and money. 

Example 1: Mr. Ravi who is a salaried person took a house loan a few years back. He purchased a term plan online and authorized it under the MWP Act with his partner and the child (beneficiaries). After the death of Mr. Ravi, the bank will approach the court to clear all the home loans with the plan profits. The case got lined out against them and profits were given to his child and his wife as both were secured under the MWP Act.

Example 2: Mr. Kamal is a business owner who purchased some of the capital to increase his business. Kamal purchased a term plan online in MWP Act 1874 with his partner as the beneficiary. Afterward the sudden demise of Mr. Kamal, his creditors contacted the court and pursued their right to pay all his term insurance proceeds. Since the plan was covered in MWP Act, the creditors lost the case and the benefit of SA was provided to his wife. 

In the above mentioned cases, the MWP Act 1874 has played a very important role in securing the loved one’s future. Nowadays, ‘building moneys on loan’ and ‘buying on credit’ has become very common. Business people and employed persons rely on personal loans, home loans, consumer loans, and business loans to fulfill their objectives. In such cases, how will you ensure that only your dependents collect the claim profits of the plan in case of unfortunate death? This is the time when MWP Act 1874 comes into play and it helps protect the future of your family financially. 

Wrapping It Up! 

As per the above discussion, purchasing a term insurance plan under the MWP i.e., Married Women’s Property Act 1874 helps in securing the financial interests of your family in your absence. Once the plan is availed under the MWP Act, it might not be attached by the courts for the debt repayments. Your children and wife are eligible for the sum assured amount in case of your demise.

Married Women’s Property Act - FAQs

  • Ans: No, a policy covered under MWP Act 1974 cannot be assigned to someone else.
  • Ans: No, a loan cannot be taken under a policy covered under MWP Act 1974.  
  • Ans: If your beneficiary (wife) passes away before you, the legal heir of the policyholder shall be eligible to receive the claim amount. 
  • Ans: Yes, you can have more than one plan under the 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.

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