Know How To Purchase Life Insurance Policy Under Married Women's Protection Act
Published On Nov 26, 2021 1:00 AM By InsuranceDekho
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The term policy will be treated as a trust, as specified by the MWP Act. The policy, including how it is serviced and how much money is paid out, will be within the discretion of only the trustees. The trust receives the insurance earnings in the case of a death claim, which can only be claimed by trustees. It can't be claimed by creditors or family members, and it can't be included in the proposer's will (estate). Profits from the claim will be placed in trust for the wife and/or kid (ren). As a result, the financial destinies of your wife and children are assured.
How To Purchase The Life Insurance Policy Under Married Women's Protection Act?
Here is how you can Purchase Life Insurance Policy Under Married Women's Protection Act:
The MWP Act specifies that the term policy will be treated as a trust. Only the trustees will have control over the policy, including how it is serviced and how much money is paid out. In the event of a death claim, the trust receives the insurance proceeds, which can only be claimed by trustees. Creditors or family members cannot claim it, and it cannot be included in the proposer's will (estate). The claim's proceeds will be put into a trust for the wife and/or child (ren). As a result, your wife's and children's financial futures are secure.
Must Read: Does It Make Sense For Senior Citizens To Purchase Term Insurance Policy?
Benefits of MWPA
Given below are some of the benefits of the MWPA:
1. Survival Benefits
Even if the policyholder lives to see the end of the policy term, the insurance benefits (if any) are distributed to the beneficiaries named in the MWPA policy. For life insurance plans that aren't endorsed to the MWPA, the policyholder receives the survival benefits.
2. Less Paperwork Required
Without having to go through the formal process of creating a settlement deed or a trust, the beneficiaries automatically become trustees under the MWPA.
3. Rights Are Secured
Other members of the joint family, such as the husband's parents, siblings, or others, are not entitled to the policy benefits. The wife and/or children, whoever was identified as the policy's beneficiary at the time of purchase, have the right to the maturity proceeds.
Beneficiaries Can Be Changed Under MWPA
Beneficiaries can be changed at any time for non-MWPA life insurance policies. Divorce, family settlements, separation, and other life events may cause the policyholder to change the beneficiaries' list. The beneficiaries, however, cannot be changed or modified at a later date under the MWPA policies. Even if the beneficiaries named in the will are divorced, the beneficiaries named in the will continue to exist.
You should bring your family's policy under the Married Women's Property (MWP) Act to protect them against such a situation. This assures that the dependents, not the creditors, receive the proceeds upon the death of the life assured. There is a lack of understanding. Even in the insurance sector, few people are aware of the MWP Act's requirements. Once the plan is protected by the MWP Act, the proposers lose control over it and are unable to revise or modify it.
Also Read: Comparing Term Insurance With Traditional Life Insurance
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.