What is Married Women's Property Act (MWPA)? A Complete Guide
24-June-2021 |
While buying a life insurance policy, the well-being of your family, especially your wife and children, is at the forefront of your mind. You want your family to be financially secure in your absence and fulfil their dreams and aspirations. But, just buying an online life insurance policy will not ensure that your loved ones get the insurance amount when you are not there. Your family may not get even a penny of the insurance amount.
This can happen if you have an outstanding debt or have taken a home loan. In that case, the insurance amount might be taken by your creditors or attached by the court for the repayment of your loans.
But there is a way to ensure that the sum assured is passed on to your wife and children. You can ensure this by buying your life insurance plan under the Married Women's Property Act (MWPA). When you buy a term insurance policy under the married women property act, the court may not be able to attach your policy for the repayment of debts, and the creditors cannot take the policy amount to settle outstanding loans. The sum assured will be passed on to your wife and children. This will ensure that they are financially secure even when you are not there.
What is the MWPA in Insurance?
Section 6 of this act highlights the importance of MWPA in insurance: "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." The Married Women’s Property Act (MWPA) is the symbol of unbreakable trust creation.
Who Can Opt for Insurance Under MWP Act?
If you are a married man and a resident of India, you can opt for insurance under the MWP Act. You can also buy an MWPA policy if you are a divorcee or a widower; in that case, you can name your child or children as the beneficiaries. But, remember that you can avail the benefits under MWPA while buying the policy and if you are buying the policy in your name.
Whom Can You Name as Beneficiaries?
In the life insurance plan purchased under MWPA, you can name your wife, or your children, or your wife and children both as the beneficiaries. As a policyholder, you can assign specific percentages of sum assured to each beneficiary, or you can simply divide the sum assured equally amongst all the beneficiaries of the policy.
For example, if you are a salaried person with a personal loan or home loan in their name or a business owner with debts, the creditors will have the first claim on the sum assured amount in case of your death. But, if you buy an MWPA policy, your wife and/or your children will claim the insurance amount, which will keep them financially secure in your absence.
This is also a great solution if you are a part of the joint family setup, as that could lead to many complications related to property distribution. Some fine prints might not be mentioned explicitly, which might cause conflicts related to property and money. In such a case, the policy purchased under the MWP Act will give a clear understanding of who the beneficiary of the policy is, and there would be no conflicts on who will receive the claim amount in your absence.
The beneficiaries of the policy cannot be changed throughout the term of the policy. So, when you name your wife as the beneficiary and go through a divorce, the beneficiary (your wife) will remain unchanged throughout the policy tenure. If your wife passes away before you, the claim amount will go to your legal heir.
Who Should Opt for MWPA Insurance?
Salaried employees or business owners who have loans and liabilities.
People who wish to protect their wife and children from fraudulent claims by creditors or relatives.
If you want your wife and children to receive the claim amount without any claims from creditors, then you can buy MWPA insurance.
Things to Know About Policy Purchased Under MWP Act
As a policyholder, you are not eligible to avail of loans against the policies taken under the MWP Act.
If you choose to surrender a cash-value policy, the policy’s surrender value will be provided to the beneficiaries of the policy.
You can have more than one plan under the MWPA. But, you need to register each plan separately under the Act.
Only wife and/or children can be stated as beneficiaries in the policy. Your parents cannot be the beneficiaries under the policy.
If you already have a life insurance plan, you cannot assign it under the MWP Act. You need to do so at the time of buying the policy.
How to Buy Policy Under MWP Act?
The process of buying a policy under MWPA is simple. At the time of purchasing a policy, you can fill in the MWPA addendum along with the insurance application. Some insurers also offer the MWPA option with their online life insurance application, and you just have to select “Yes.”
With the Tata AIA life insurance policies, you can ensure adequate life coverage for yourself, and you can choose plans that suit your needs. Additionally, we provide lower premiums for our female policyholders.
Conclusion
In today’s world, buying things on credit or taking a loan to fulfil your needs is quite common. Salaried individuals, as well as business owners, depend on loans and credit to achieve their goals. In this case, purchasing an insurance policy under MWPA ensures that your family is financially protected in your absence.
L&C/Advt/2022/Mar/0620