What we think, that buying an insurance policy will ensure the well-being of our family, specifically our wife and children in case of any unforeseen events. But Our life insurance claim money may not reach our nominee or beneficiary.

In our absence, it can be taken by Banks, Financial Institutions, our relatives or people to whom you may owe money (creditors). But we can ensure that the money  is indeed passed on to our wife and children by taking a life insurance plan under the MWP Act.

For a married, male policyholder, availing of a life insurance plan under the Married Women's Property Act, 1874 (MWP Act) helps in protecting your family's financial interests in your absence. Once a policy is availed under the MWP Act, it may not be attached by courts for repayment of your debts*. Only your wife and children will be entitled to the sum assured in the event of your demise.

What is the MWP Act?

Under this act, Section 6 highlights its importance, "A policy of life 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 his creditors, or form part of his estate."

How does the MWP Act protect my family?

The life insurance policy under the purview of the MWP Act will be considered as a trust. Only trustees will have control of the policy including servicing, and the receipt of the benefit amount. In case of a death claim, the policy proceeds are received by the trust and can only be claimed by trustees. It cannot be claimed by creditors, or relatives or form a part of the will (estate of the proposer) *. The trust shall be holding the claim proceeds for the benefit of the wife and/or child(ren). Hence, the financial future of your wife and children is protected.

For instance, if you are a salaried person with a home/personal loan or the owner of a business and have accumulated debts, your creditors will have the first claim on your policy proceeds in the event of your death. When you buy life insurance under the MWP Act, your wife and/or child(ren) will be the only ones who will have access to the claim amount – enabling you to secure their future financially.

This is also an excellent solution for a joint family setup, wherein there could be several complications in the ownership of property. Some fine prints might not be explicitly specified thereby increasing the scope of family disputes over money and property. In such cases, a policy covered under the MWP Act will give a clear title to the beneficiary.

The beneficiaries (wife and/or child(ren)) once mentioned in the policy remain unchanged throughout the term. Once the policy is issued, neither will it be considered part of the insured's business assets (estate) nor will it be targeted by the creditors/lenders of the business. This means that no one can exercise control over the benefit amount in the event of the insured's demise, except the insured's wife and child(ren) with which it seals their future in the right way.

Who should opt for the MWP Act?

• Business people and salaried individuals with loans or liabilities.

• People who want to protect their wife/child(ren) from creditors/relatives who might have fraudulent intentions.

• The benefit amount with life insurance can be a huge sum enough to protect your loved ones' future in your absence financially. So, it will be the ideal decision if everybody who is buying life insurance chooses to protect their loved ones under the MWP Act.
   

Illustration:

Let's consider a scenario - Mr. Raman and Mr. Vimal, two salaried individuals, close friends took home loan a few years ago. Both bought life insurance policies with their spouses and children as the nominees/beneficiaries. But Mr. Raman Took insurance without MWP Act and Vimal took with MWP Act. In an accident both died. After Mr. Raman and Mr. Vimal 's demise, the bank approached the court to clear the home loan with the policy proceeds. The case got in favor of bank and Mr. Raman’s wife and child were remained empty handed as they were not protected under the MWP Act. On the other hand, Mr. Vimal’s case, the case got ruled out against them and the proceeds went to his wife and child as they were protected under the MWP Act.

Let’s consider another scenario – Mr. Rohit is a businessman who keep borrowing money time to time to expand his business. He bought life insurance policy under the MWP Act, 1874 with his spouse and child as the beneficiary. After his sudden demise, his creditors approached the court and sought their right to get paid out of the proceeds of the term insurance policy. Since the policy was covered under the MWP Act, the creditors lost the case and the sum assured benefit was ordered to be paid to his wife.

In both the above scenarios, the MWP Act, 1874 played a crucial role in protecting the future of the families. In today’s world, ‘buying on credit’ and ‘building assets on loan’ have become a common trend. Employed individuals or people in business, alike rely on credit (home loan, personal loan, business loan, consumer loan, etc.) to achieve goals. In this kind of scenario, how do we can make sure that only our dependents receive the insurance policy claim proceeds in case of our uneventful death? This is where the MWP Act, 1874 helps you in protecting your family's future financially.

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To Protect your family and buying life insurance policy under MWP Act 1874 contact us on 7973915519 or email at licgaganptk@gmail.com