In these uncertain times, we all take steps to ensure our family’s safety against unexpected situations. Among these steps, buying a life insurance is a primary one as it safeguards your family financially in an unfortunate event of your demise. However, what many people are not aware that nominating your family members as beneficiaries of your Life Insurance plan only means handing over of funds by the insurer, but it will not safeguard them against claims of legal heirs, banks or creditors etc.
This is where the Married Women Property (MWP) Act comes to rescue. It ensures that your life insurance policy remains out of bounds for any such claims. Here is everything you need to know about MWP act.
Overview- Married Women’s Property (MWP) Act
Married Women’s Property Act 1874 (MWP Act) is a rule that primarily safeguards the rights of married women. Of the various sections of the act, Section 6 caters to protection of life insurance proceeds for married women. If you as a policyholder have nominated your spouse under the MWP act for your insurance, no other claims or court attachments may have any legal liability over the proceeds.
Are You Eligible To Buy Insurance Under MWP?
To opt for a life insurance under the MWP Act, you need to be a married man residing in India except in the state of Jammu and Kashmir. Since only the wife and children can be named as beneficiaries, a divorcee or a widower can also take up insurance under the plan provided the beneficiaries are children and no other relative. Should a married couple divorce after taking a policy, the beneficiary would stay the same as once opted for under the MWP act.
Is It A Good Idea To But Life Insurance Under MWP Act?
Once you opt for an insurance policy under MWP Act, it safeguards your spouse and children financially. No other person or entity including creditors, court cases or parents can seek any right over the proceeds of the life insurance claim other than the beneficiaries. Such a policy can truly safeguard your spouse and children if you are living in a joint family or have multiple financial dealings. It is also important to note here that opting for insurance under MWP act does not cost you any additional fee.
Ways To Buy Life Insurance Under MWP
To purchase a life insurance plan under the MWP act, you simply need to fill up the MWP addendum form at the time of filling the insurance proposal form. The form is available with most agents and can also be downloaded from the insurer’s website.
You will then be required to add details of the beneficiary. If opting for multiple beneficiaries, you will have to disclose percentage of benefits for each.
You will then be needed to appoint a trustee who will legally oversee the policy proceeds are given out to the beneficiaries. The trustee must also sign the addendum form. You can also appoint a bank or a trustee company as a trustee should you so desire.
Points To Keep In Mind
For all its benefits there are some essential points that you must be aware of before opting for insurance under MWP Act. The beneficiaries you add as per the MWP addendum form are fixed and cannot be changed. Also you will lose the right to surrender your policy mid-term if it is under the MWP act. You are also not permitted to seek loans on life insurance plans taken under the MWP act.
An insurance plan under MWP Act safeguards your spouse and children financially by ensuring no other claims are liable on the policy proceeds.