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Ref. No. KLI/22-23/E-BB/492
The Married Women's Property (MWP) Act is a law that provides married women with financial protection and security in case of their spouse's unfortunate demise. Read ahead to know how this act helps married women establish their financial standing.
Updated on: 26 May 2023
People believe that buying a life insurance policy will ensure the well-being of their family, spouse, and children in case of their unfortunate demise. But what if you have significant unpaid debts left behind you? Do you wonder what will happen if the creditors take away all the policy money? This is where the MWP Act in insurance comes into play.
Now you must be thinking about what is MWP Act and how it will help in safeguarding your wife and children. Let us understand in detail what the MWP Act is, its pros, and how it secures your family.
The Married Woman Property Act 1874 was enacted to curb the injustice against women and offer them financial safety after the unforeseen demise of the family’s breadwinner. The act ensures that married women in India have an independent and sole right to their property, which cannot be claimed by anyone else, not even their husband, parents, in-laws, or children.
The Married Woman Property Act 1874 was amended in 1923 to include a life insurance policy, offering financial security to married women and their children. This act is included in the life insurance policy bought by the policyholder and mandates that the money received by the wife from the policy is her property and cannot be used to repay the husband’s liabilities.
As stated above, under the MWP Act in insurance, the MWPA benefits are only for the policyholder’s wife and children. No other relative, heirs, or creditors can stake a claim on the money. When compared to other policies, the creditors can claim the money from the proceeds if you have debts and loans to your name.
But in the case of the MWP Act, the rules are different. For example, as an individual breadwinner for your family with a home/personal loan or a business owner with debts, under any other policy apart from MWP, your creditors and lenders will have the first claim on the proceeds of your term life insurance policy after your unfortunate demise, leaving your family financially unstable.
However, when you buy the policy under the MWP Act in India, then only your wife and children will be able to make claims on the policy process of your term insurance.
Safeguarding your assets and protecting your loved ones has become increasingly important. One of the most effective ways to mitigate financial risks and ensure peace of mind is by purchasing insurance. While insurance policies are available through various channels, one option that stands out is buying insurance with the MWP policy. Some other essential benefits of buying MWP are as follows:
The MWP Act India allows you to buy a term plan that covers the financial requirements of your family in case something unfortunate happens to you. The nominees under the Act can be:
Beneficiaries under MWP Act cannot be changed even in case of divorce. In the event of the beneficiary’s death, their legally appointed heir can claim the insurance payout. For this reason, it is essential to list multiple beneficiaries under MWP Act when purchasing a policy.
When you are buying the policy under this Act, you can also add trustees. According to the MWP Act in insurance, the trustees can be multiple people, including any of your nominees or a financial institution/bank. It is not mandatory to include any trustee in the form, and you can change the trustees at any time.
Buying your term insurance plan under the MWP Act 1874 is quite a simple process. Keep reading through to know the details:
While evaluating term insurance policies, look for those explicitly mentioning compliance with the MWP Act 1874. Ensure that the policy allows you to designate your wife and children as beneficiaries under this act.
Assess your family’s financial needs, including liabilities, future goals, and living expenses, to determine an appropriate sum assured. The chosen coverage should be sufficient to meet these needs even in your absence.
Complete the insurance application form accurately, providing all necessary personal and financial details. Disclose any pre-existing medical conditions, as non-disclosure may lead to claim rejection.
While filling out the nomination form, clearly state that the policy is taken under the MWP Act, 1874, and mention the names of your wife and children as the beneficiaries. Consult with your insurance advisor to ensure the nomination process is correctly executed.
Choose a premium payment frequency (monthly, quarterly, annually) and pay the premium as per the selected mode. Ensure you understand the grace period for premium payment and adhere to it to maintain the policy in force.
Thoroughly review the policy documents and their terms and conditions. Verify that the policy clearly states compliance with the MWP Act of 1874 and that the nominated beneficiaries are correctly mentioned.
Inform the insurance company promptly about any change in personal details, such as marital status, address, or contact information. Keep the policy up-to-date to avoid any complications during the claim settlement process.
Mr Roy had bought a term insurance plan under the Married Women’s Property Act in India and added his wife and children as nominees. After his unfortunate demise, his lenders demanded that their dues are paid using the sum assured received from the term insurance policy. But since Mr Roy bought the plan under the MWP Act, the case was taken to court, and the verdict was given in favor of the family, making his wife and children financially secure. The MWP Act India made sure that the wife and the children received the money.
Purchasing a policy under the MWP Act in India is a wise decision, as it helps to protect your family during an unfortunate event. The MWP Act gives married women the security and assurance that their property is protected from creditors and that the estate they create will be passed on to their heirs. Buying an insurance policy under MWP Act can provide invaluable financial protection for those with children, assets, and other financial responsibilities.
No, you cannot assign someone else or take a loan against the policy if your insurance plan is covered under the MWP Act.
Yes, you can surrender the policy, but it has to be signed by the beneficiaries. The proceeds of the policy will be given to the policyholder for the benefit of the beneficiaries.
No, you cannot change the beneficiary once you have opted for one already under the MWP Act.
In the event of your wife’s death, your legal heir will receive the proceedings of the policy. But it is recommended to nominate more than one beneficiary.
Yes, you can have more than one insurance policy under the MWP Act, but they have to be registered separately under the Act.
No, your parents cannot be nominated as the beneficiary. The MWP Act only covers your wife and children.
No, you cannot assign an existing insurance policy under the MWP Act. If you want to assign any policy, it has to be done at the time of purchase.
Ref. No. KLI/22-23/E-BB/2435