The breadwinners of the family generally believe that buying a life insurance policy will keep their family secured in their absence. However, legal procedures and financial matters are far more complicated than you think they are. In the worst-case scenario, your nominee won’t even get the assured amount after your unfortunate demise.
Just imagine, that you have been paying the premiums all these years just to realise that in your absence, the assured sum goes to your relatives or creditors!
If you do not wish this nightmare to come true for your loved ones, then make sure you get a term insurance plan under the MWP Act. When you buy a life insurance plan under the MWP Act, the courts will not be able to direct the sum assured towards paying your debts.
Let’s learn more about this MWP Act!
What is MWP Act?
The MWP Act stands for Married Women’s Property Act. An amendment related to the Act was added to life insurance in the year 1923. As per this Act, the proceeds from the husband’s insurance plan cannot be “subject to the control of the husband to his creditors, or form a part of his estate.” This means that the sum assured will be the property of the beneficiaries and cannot be considered as his own property. And hence, the amount cannot be used to repay the loan or any other kind of liabilities after his unfortunate demise.
Who Iis Eligible For Accessing MWP Act?
Any married man can access a life insurance plan under the MWP Act. This holds true even for widowers and divorced persons. All types of insurance policies get covered under the MWP Act.
Even a married woman can buy a life insurance under the MWP Act in her name with her children as beneficiaries. The husband won’t be entitled to the sum assured upon the maturity of the policy.
If you are self-employed, or own small business and often take credits, then you should get life insurance plans under the MWP Act.
Beneficiaries and Trustees for MWP Act
- Wife and children together
- Only the wife
- Single child/ children (Bilogical as well as adopted)
How Can MWP Act Protect Your Family?
When you buy a life insurance plan under the MWP Act, the policy will be under the control of the trustees (mentioned above). So, when a death claim is registered, the policy proceeds will be the property of the trustees. No one else can place a claim, such as relatives, creditors, etc. Thus, the MWP Act secures the financial future of your children and wife.
Suppose, you are a salaried person and have a home laon going on. In case of your unfortunate demise, the creditors will be the first to claim on your life insurance plan. But if you have bought that life insurance plan under the MWP Act, then only your wife and children will have the right to claim for the assured amount.
If you stay in a joint family setup, you may face many complications related to ownership of the propert. Family disputes over property and money are a common instance. In those situations also, the MWP Act keeps your beneficiaries financially secured by providing them the rights over the sum assured.
Remember that the beneficiaries whom you mention in the policy stays there unaltered throughout the tenure of the insurance plan. As soon as the policy gets issue, it will not longer be considered as your own asset. Hence, no lender, creditor or relative can target it in your absence.
How Can You Avail Of A Policy Under MWP Act?
It is quite easy to get yourself a term insurance policy under the MWP Act. Also, it is inexpensive and does not burn a hole into your pocket.
Here’s what you need to do in order to avail of a life insurance plan under the MWP Act:
- Download the MWP addendum form from the website of the insurance company. You can even get it from your agent.
- Now fyou have to fill in the MWP addendum form as well as the life insurance proposal form correctly.
- Make sure you add the details of the trustees/beneficiaries and the share of benefits etc.
It is your responsibility to plan for the financial security of your wife and children in your absence. Hence, it is advisable that you buy a term insurance plan under the MWP Act only. This will not just keep the creditors away, but also maintain peace in your joint family and protect your wife and children from facing any kind of family disputes.