Buying a life insurance policy enables a person to ensure the financial well-being of their family, spouse, and children during their unfortunate death. What if you leave behind substantial unpaid debts?
Have you ever wondered what would happen if creditors removed all the policy money? The MWP Act comes into play in insurance here.
In the unfortunate event of their spouse’s death, married women are provided financial protection and security under the Married Women’s Property Act in term policies.
Read on to find out how this act assists married women in establishing their financial standing.
What is the MWP Act?
- After the death of the family’s breadwinner, the Married Women’s Property Act of 1874 offered financial security to women.
- As a result of the 1923 amendment to the Married Women’s Property Act 1874, married women and their children can now purchase a life insurance policy that will provide them with financial security.
- According to this act, the money received by the wife from the policy cannot be used to pay the husband’s debts.
- It is included in the life insurance policy purchased by the policyholder.
MWP Act – Benefits
Listed below are some advantages of the MWP Act for term insurance:
- Beneficiaries are only your loved ones
MWP Act term life insurance benefits go directly to your wife and children. Creditors or lenders cannot claim it.
- Provides a safety net
The MWP Act provides a safety net for your family in case of your untimely death. Ensuring your loved ones are cared for gives you peace of mind.
- No interference with women’s property rights
Women’s property rights are not affected by the MWP Act. Under the MWP Act, married women can still take out insurance and protect their children’s future.
- Protects you from the creditors
The MWP Act separates the insurance proceeds from your assets, making them impossible for lenders or creditors to claim. Consequently, you do not have to worry about outstanding loans or debts when you receive the money.
How to purchase term insurance with MWP?
The process of purchasing a term insurance plan under the MWP Act 1874 is relatively straightforward.
- Understanding The MWP Act Clause
When evaluating term insurance policies, look for policies that explicitly mention compliance with the MWP Act 1874. This act ensures that your wife and children can be designated beneficiaries.
- Decide on the sum assured
Consider your family’s future goals, liabilities, and living expenses in determining the appropriate amount of insurance. The coverage selected must be sufficient to meet these needs even if you are not present.
- Completing the application
Ensure all necessary personal and financial information is provided on the insurance application form. If you have any pre-existing medical problems, disclose them. Failure to disclose may result in a rejection of your claim.
- Nominate beneficiaries
Mention your wife’s and children’s names as beneficiaries on the nomination form.
- Pay your premium
Pay your premium accordingly depending on the frequency of premium payments (monthly, quarterly, annual). To maintain the policy in force, ensure you understand the grace period for premium payment.
- Review your policy
Contact the insurance company promptly when your personal details change, such as your marital status, address, or phone number.
Conclusion
The term policy in India with MWP helps protect your family during unfortunate events and protects you from financial loss. The MWP Act protects married women from creditors; their estates are left to their heirs. Also, it protects children, assets, and other financial responsibilities.
