Financially secure your wife and children, even when you are neck-deep in debt
The purpose of life insurance is to secure the financial future of our loved ones even when we are not around. But what if the money does not reach them?
If you have an ongoing loan or debt, the death benefit could be claimed by the creditor as payment for the outstanding debt. However, there is a step, through which you can avoid such a situation and that simply means buying the life insurance policy under the Married Women’s Property (MWP) Act, 1874.
What is the MWP Act?
Section 6 of the Act states that "A policy of insurance effected by any married man on his own life and expressed on the face of it to be for the benefit of his wife, or of his wife and children, or any of them, shall ensure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them according to the interests so expressed, and shall not, so long as any object of the trust remains, be subject to the control of the husband, or to his creditors, or form part of his estate."
Who can buy a life insurance policy under MWP Act?
You need to be a resident of India and a married person to buy the life insurance policy under the MWP Act. A widower or divorcee can also purchase the policy.
How to buy a policy under MWP Act?
The process of buying a life insurance policy under the MWP Act involves just filling up an addendum along with the insurance policy application form. Some insurers have provided the option in the application form itself where you just need to tick the yes box to buy the policy under the MWP Act. After you select the MWP Act option in the application, you would be required to share the beneficiary details.
Who can be the beneficiary under the MWP Act?
Your wife, child, or children, can be the beneficiaries. You also have the option to assign a specific percentage of the sum assured to the beneficiaries. You can only choose the beneficiary at the time of purchasing the policy.