Starting a family is a big responsibility. While people consider purchasing term insurance to financially protect their wives and children in case something were to happen to them. But, what if your loved ones could not get access to the policy benefits, especially when it is their only financial backup fund? This happens in case you have an ongoing business or home loan that has incurred debts. In such cases, the life cover can be claimed by your creditors or lenders for debt repayment.Read more
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However, you can avoid this case simply by purchasing a term insurance plan under the Married Women’s Property Act, 1874. Let’s understand the MWP Act details and how your family members, especially your wife can get benefit from it:
The Married Women’s Property (MWP) Act states that the earnings of an Indian married woman are her own property. This act is involved under the life insurance plan purchased by any man and states that money received by a wife from the plan is her property and it can’t be used to repay the liabilities of her husband.
According to the section 6 of the Married Women’s Property Act (MWP):
An Indian married man can buy a term plan under his name to provide benefits to his wife or children.
The beneficiaries mentioned in the term policy will receive the life cover amount upon the policyholder’s death.
The plan benefits will not be attached or are in control of the policyholder
So, purchasing a term insurance plan under this act can save your wife and children from the financial burden of debts and any family disputes.
The MWP Act of India enabled you to purchase a term insurance policy that covers the financial needs of your dependents in case of any unforeseen event with you. The nominees under this act can be:
Your wife only
Your children, both natural and adopted one
Your children and wife together
While purchasing the plan under MWP, you can add trustees. As per the MWP Act, multiple people can be trustees, including any financial bank/institution or your nominees. It is not important to include any trustee in an application and you are allowed to change the name of the trustee anytime. If you select to have trustees in your form, then you have to submit the proof of their consent along with the application form.
Any individual who is an Indian resident can avail of a term life insurance policy under the Married Women’s Property (MWP) Act. Divorcees or Widowers can purchase this plan under MWPA also to make sure that the benefits will be provided to the children.
You can buy the term plan under your name so that your children and wife can get the benefits under it. Additionally, if the wife and husband get divorced after availing of insurance under MWPA Act, the beneficiaries chosen at the time of policy issuance remain unchanged. This means, that no other creditor or relative can claim over the payout of the policy.
MWP Act came into effect to make sure the safety of ownership of property, earnings, and any other investments done by a married woman.
This secures the properties of married women from her in-laws and creditors or lenders (if any)
The plan cannot be reversed. This means that a wife cannot buy a plan in the name of a husband under this act.
Neither the husband nor any other relative can get any interest in the property of his wife
Let’s understand this with the help of an example:
Raman runs a tiles business and has taken some loans for his business. He bought a plan under the MWP act and appointed his wife as the beneficiary. After a few days, he passes away in an accident. Now, the creditors who gave a loan to Raman approached the courts to pay back from their family assets.
Although a number of assets owned by Raman were attached by the court to settle the debt, they cannot attach MWP Policy. The entire proceeds of the policy can only be used for the benefit of Raman’s wife and children.
Following are the individuals who should buy term life insurance under the MWP Act:
Policyholders who want to protect their children and wife’s claim on the proceedings of policy
Businessmen, salaried persons, and other individuals who have pending loans, debts, and liabilities in their name
People who want to make sure that their dependents receive the payout when he/she is not with them
Purchasing a term insurance policy under MWP Act is quite an easy process.
At the time of filling out the insurance documents, you will get a question if you want to buy a term plan under MWP
Then, Select Yes
After selecting this option, provide information related to your nominee, which includes the date of birth, name, percentage of share, and your relationship with the nominee.
The term plan under the MWP allows your children and wife to be your nominees.
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