Starting a family is quite a responsibility. While people do so, they consider buying life insurance to protect their partner and children financially in case anything were to happen to them. However, what if your family does not receive a single rupee out of the said benefit, especially when they need it the most.
At times, financial overburden can really put a toll on a family. For those who have taken a huge loan or are running a business in debt, the creditors can claim the sum assured. In such a situation, your family is left with little to nothing in hand.
But don’t worry! To avoid your wife and children suffering from such a situation, you can buy life insurance under the Married Women’s Property Act, 1874.
What is the Married Women’s Property Act, 1874?
According to the Section 6 of the Married Women’s Act, 1874 – a married man in India can buy an insurance plan under his name, which will benefit his wife, his wife and children, or only his children if anything were to happen to him. The beneficiaries stated in the policy will most certainly receive the sum assured amount upon the death of the policyholder. Moreover, this amount cannot be claimed by any other creditor or form a part of his estate.
Who can opt for Insurance under MWP Act?
For a man to opt for insurance under MWP Act, 1874, he needs to be married and a resident of India. Widowers or divorcees can purchase this policy as well, but have to ensure that the benefit goes to the children. However, know that you have to buy the policy under your name so that your wife, wife and children, or just the children can avail the benefits under it.
Whom can you opt as Beneficiaries?
The beneficiaries declared in the insurance policy that is covered under the MWP Act can be –
- Your wife alone
- Just the children
- Your wife and children
In fact, policyholders can dedicate a specific percentage to each of the beneficiaries of the policy or divide the sum assured amount equally. Know that if you have declared your wife as one of the beneficiaries in the policy and you happen to take a divorce later in the future, she will continue to remain as one of the beneficiaries of the policy.
What else does the MWP Act do?
One cannot avail a loan on the life insurance plans endorsed under the Married Women’s Property Act, 1874. If you were to surrender a cash-value policy, the benefits earned under it will go to the respective beneficiaries after the policy surrender. Moreover, if you survive the policy tenure, the maturity benefits will be given to the enlisted beneficiaries of the policy.
How To Take An Insurance Policy Under The MWP Act?
If you are a married man living in India, you can simply get a life insurance plan like a term policy under the Married Women’s Property Act, 1874. All you have to do is fill out an addendum along with the life insurance policy application form at the time of the purchase.
To Sum It Up!
We often worry about the financial well-being of our family in our absence, especially when one is in a lot of debt. Buying life insurance plans under the Married Women’s Property Act, 1874, will ensure that your loved ones are protected financially in case of your death.
Also, endorsing life insurance under the MWP Act protects the benefits from being utilized for repayment of loans and completely dedicated to the financial well-being of the beneficiaries.
Married Women’s Property Act – FAQs
Q: Can the policy be assigned to someone else under the MWP Act?
A: No. The policy endorsed under the MWP Act 1874 cannot be assigned to someone else.
Q: Can I avail a loan on the life insurance plan taken under the MWP Act?
A: No. You cannot avail a loan on the policies endorsed under the MWP Act.
Q: What happens to the policy under the MWP Act if my wife dies before me?
A: In case your wife (the beneficiary of the policy) dies before you, the legal heir of the policyholder will receive the said benefits.
Q: Can I purchase more than one life insurance plan under the MWP Act?
A: Yes. One can endorse more than one life insurance plans under the MWP Act.
Q: Can I endorse my existing life insurance plan under MWP Act 1874?
A: No. Once a life insurance plan is issued, you cannot assign it under the MWP Act at a later date. It needs to be assigned at the time of the purchase of the policy.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor-made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.