MWP Act: A Boon To Women’s Financial Safety

Jul 14, 2018 | 1 year ago | Read Time: 3 minutes | By iKnowledge Team

Financial Planning for Women The Married Women’s Property (MWP) Act mandates the sum assured from term insurance has to be passed on to your wife and children. If you are married, availing insurance plans under the MWP Act, 1874 helps in protecting your family’s financial interests in your absence. A life insurance cover helps the surviving family members maintain the same standards of living after the death of breadwinner. This process requires a nominee who will get the claimed sum assured. However, just nominating family members may not serve the purpose. A nomination only ensures that the insurer hands over the death claim benefits to the nominees, therefore the legal heirs may still lay claim on the proceeds. The claimed money can be taken by your relatives or people who you may owe money (also called creditors) in your absence. But if the policy is availed under the MWP Act, it may not be attached by courts for the repayment of your debts. Though, it does not mean that you are free from legal hassles.

How to take the right measure?

MWP act in life insurance says “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 husband, or to his creditors, or form a part of his estate”. This can be done by simply filling in an MWP addendum while applying for term insurance, without formally creating a settlement deed or a trust separately. Any married man can avail a life insurance policy under the MWP Act. This would include divorced persons as well as widowers. The only condition is that you take the policy on your name only.

How does MWP Act protect women’s financial interests?

The term policy under the MWP Act will be considered as a trust. Only trustees will have control on the policy including servicing and receipt of benefit amount. In case of policyholder’s death, the policy proceeds are received by the trust and can only be claimed by trustees.

For instance, if you are a salaried person with a home or personal loan or you own a business and have accumulated debts; your creditors will have the first claim on your life insurance in the event of your death. When you buy term insurance under MWP Act, your wife and/or children will be the only ones who will have access to the claim amount, ensuring that their future is secured financially. This is also a great solution for a joint family setup wherein there could be several complications in the ownership of property, increasing the scope of family disputes over it. A policy covered under the MWP Act will give a clear title to the beneficiary.

Who should opt in for MWP Act?

  • Businessman and salaried individuals with loans.
  • People who wish to protect their wife/children from creditors/relatives with fraudulent intentions.
  • The benefit amount of term life insurance can be a huge sum enough to financially protect someone’s future in your absence. It will help protect your loved one under MWP Act.

To take up an insurance policy under the MWP Act, you just need to simply inform your insurance provider. This should be done at the time of taking the policy, as you cannot make any changes thereafter. Aegon Life’s iTerm plan is designed to give your family financial independence and stability in case of any unforeseen event.  You can avail the plan on;line and choose a monthly or annual premium. Advt. No.: IA/Jul 2018/4161


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