Rest in peace after taking this blanket for life
Are you looking to purchase a life insurance policy to financially secure your wife and children in case you are no longer? But what if your wife and kids don’t even get a rupee on the product when they need it most? This can happen if you have an outstanding home loan or a business that has incurred debt. In such a situation, the sum insured may be claimed by your creditors or seized by the court for the repayment of your debts. But there is good news: You can avoid this by simply purchasing your life insurance policy under the Married Women’s Property Act, 1874.
What is the MWP Law (Law on the Property of Married Women, 1874)?
Article 6 of this law underlines its importance: “an insurance policy taken out by any married man for his own life and expressed a priori for the benefit of his wife, or of his wife and children, or of one of them, must ensure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or of one of them according to the interests thus expressed, and must not, as long as a object of the trust remains, be subject to the control of the husband, or his creditors, or form part of his estate.
Who can purchase insurance under the MWPA?
If you are a resident of India and a married man, you can purchase an insurance policy under the MWPA. You can also purchase the policy if you are widowed or divorced – in such a scenario, you can name your children as beneficiaries. However, the benefit can only be used while the policy is being purchased, and this too if you purchase the policy in your own name.
Who can you name as beneficiaries?
The beneficiaries defined in a policy covered by MWPA can be your wife alone, only your child (ren), or your wife and children together. As the policyholder, you can assign precise percentages of the sum insured to each beneficiary or divide it into equal amounts. However, once the policy is issued, you cannot change the beneficiaries. So when you designate your wife as beneficiary and in case you divorce later, your beneficiary (wife) will remain the same.
What else does MWPA do?
As a policyholder, you cannot take out loans on MWPA-backed policies. If you surrender a cash value policy, the cash surrender proceeds will go to the beneficiaries. In addition, if you survive the term of the policy, the maturity proceeds will still flow to your beneficiaries.
How to take out an insurance policy under the MWPA?
The process for approving an insurance plan under the MWPA is very straightforward. All you need to do is complete an endorsement with your insurance application at the time of subscription.