A term insurance policy can help you protect your loved ones from financial strain if an unfortunate incident occurs and you pass away. If that happens, a term insurance policy will ensure that the beneficiary will receive the assured sum and hence your family can carry out their expenses without any hassle.
However, getting a term insurance policy may not be the end of financial problems for your family. In case you have outstanding loans with any creditors, relatives or friends, then after your demise, they can lay claim to the term insurance payout. They may have priority over your spouse and children for the insurance benefit. Thus, only buying a term insurance policy will not ensure that the money reaches the right hands.
So what can you do? There is a way out. You can purchase a term insurance policy under the MWP (Married Women’s Property Act). This will make sure that when the time comes to claim the policy, your wife and children will be given first preference to the death benefit and no one else can lay claim to the policy.
What is the MWP Act?
The Married Women’s Property Act is a law created to protect women’s properties from creditors, relatives, friends and others who try to lay claim to it using unfair means. Section 6 of the MWP act specifically mentions that if a married man purchases a policy under this act, then only his wife, their children, or both can claim the benefit of the policy. Creditors, relatives or friends with outstanding loans cannot claim the death benefit.
Thus, purchasing a term insurance policy under the MWP Act ensures that in case of an unfortunate incident if you pass away, then the money from your term insurance policy will rightly go to your wife and children as you intended.
Who can purchase a policy under the MWP Act?
A married man can purchase a erm insurance policy under the MWP Act. He can either add his wife, his children, or both as beneficiaries and mention the percentage division of the claim amount. A wife, however, cannot purchase term insurance under MWP for her husband. She can purchase a term insurance policy under MWP for her children and add them as beneficiaries.
How To Purchase Term Insurance Under MWP?
The procedure to purchase a term insurance policy under the MWP act is almost exactly similar to buying a standard term insurance policy. When signing the application for term insurance, policyholders also need to sign and submit an MWP Act addendum. Many insurance companies have this option included in the main form itself. All you need to do is answer ‘Yes’ wherever you see the option to purchase the policy under MWPA. If you do not see such an option in the form, enquire about it to whoever is selling you the policy and ask for it to be included.
Benefit of Getting Term Insurance Under MWP
An earning member of the family does everything they can for their loved ones. And this can include taking on a car loan, home loan, personal loan, borrowing money from friends and relatives. They may have other liabilities that they fulfil every month. But an unexpected incident can occur at any time and when that happens, people whom the policyholder owes money can lay claim to the policy death benefit, and hence what was intended for your wife and children falls into the wrong hands, putting in vain all your efforts to safeguard their future.
Getting a policy under the MWP Act can prevent this from happening. Your insurance claim directly reaches your wife and children without anyone else meddling in your affairs. They are insulated from your existing debts and liabilities since the claim amount cannot be taken from them for loan repayments.
So if you’re buying a new term insurance plan, make sure you do so under the MWP Act to safeguard your family’s future.
