Things to know about insurance under MWP Act
Updated On Dec 21, 2022
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A life insurance policy offers a much-needed safety net in case of unforeseen events. However, it is not always a possibility that the maturity amount upon the death of the policyholder is given out to the family including spouse, children, etc. Many times, this amount is also used to pay off the debts due to which the spouse and children of the policyholder get no benefit out of the insurance amount. Such a situation can be easily overcome if you buy a life insurance policy under the MWP or Married Women’s Property Act. Here is a guide that tells essential things about the MWP act in life insurance. Read on, to learn more
What is the MWP Act in Life Insurance?
The Married Women’s Act was incorporated in the year 1874 to protect the financial interests of married women. The law states that a married women's property is solely owned by her and not by her husband or parents. This law was also amended to life insurance so that the insurance amount is solely the property of the wife and not even the policyholder.
Section 6 of the MWP 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.”
Here is an example to state how MWP helps when you buy a life insurance policy with it: A woman is 45 years old and her husband is facing a financial crisis. Her husband has bought a life insurance policy under the MWP act which is about to mature soon and so he thinks he will clear his debts with the maturity amount. In this case, once the policy matures, the amount will be the sole property of the wife and not the husband and so the policy amount cannot be used to clear debts.
Who Should Buy Insurance Under MWP Act?
Life insurance under the MWP act can be bought by any married man, including divorcees as well as widowers. On the other hand, a married woman can also buy the MWP act, in the name of her children. People who live in a joint family should also consider buying life insurance with MWP act as in this case there can be many claimants. However, please note that the husband is not a beneficiary as the insurance amount is solely a different asset.
Benefits Of Buying Life Insurance With the MWP Act
Following are the notable benefits of life insurance with the MWP act:
- The insurance claim cannot be claimed by anyone except the beneficiaries
- The insurance amount is not a part of the will of the policyholder and there can be no misunderstanding related to it
When you purchase a life insurance policy under the MWP act, you should choose more than one beneficiary so that in the event of one beneficiary's death, the other beneficiaries can benefit as well.
Thus, life insurance with MWP or Married Women Protection Act safeguards the financial interest of the beneficiaries of life insurance policyholders in case of an unforeseen event.
Also Read: How To Calculate Term Insurance?