Purchase Life Insurance Under MWP Act To Secure Wife’s Future

In case of your demise, you’d want the insurance money to reach the right hands. In most cases, that would be your wife and kids.But do you know that your creditors can claim the insurance proceeds if you have unpaid loans? This can defeat the primary purpose of purchasing a life insurance policy.You can protect your loved ones from this turmoil by purchase your life insurance policy under the MWP Act. Take a look at what it is and how you can purchase life insurance under this act.

The MWP (Married Women’s Property) Act was enacted in the 1870s to protect the properties owned by women from creditors, relatives, and even their husbands.Section 6 of this act deals specifically with life insurance. It states that the insurer will only give the death benefit amount to the husband’s wife, or his wife and children, as selected in the MWP Act. Every life insurance policy taken under the MWP Act is considered a special trust on which no creditor or relatives can make a claim.

No, not every life insurance policy comes with the MWP Act protection. When purchasing the policy, the husband needs to submit the MWP addendum to the insurer.In the addendum, the policyholder will be required to provide details, like-

• Beneficiary name
• Relationship with the policyholder
• Date of birth
• Share percentage if there are multiple beneficiaries

If the addendum and policy documents are in order, the insurer will issue the policy under the MWP Act.

When it comes to life insurance policies, nominees are only treated as the custodians of the policy proceeds and not the final beneficiaries. In case of the death of the policyholder, creditors might still be able to claim the proceeds.Also, a new ‘Final Beneficiary’ clause was introduced in 2015. With this, the policyholder can make their spouse, kids, and parents the final nominee of their policy. No creditor can claim the insurance proceeds if the policy has a final beneficiary.However, the policyholder has the right to change the final beneficiary during the policy tenure. So, a husband might change the final beneficiary from his wife to someone else under a family member’s influence. The MWP Act protects married women in such cases as their legal rights supersede the policy nominee/s or final nominee/s.Once the addendum is submitted with the wife’s (and/or kids) name when purchasing the life insurance policy , it cannot be changed.

As mentioned above, you are required to submit the ‘ Married Women’s PropertyAct (MWP) Addendum’ with the insurance form at the time of purchasing the policy. Life insurance companies generally have the addendum on their websites.Fill the addendum and submit it along with the policy proposal. If everything is in order, your life insurance will be issued under the MWP Act. The same will be mentioned on your policy documents once it is issued.

Purchasing life insurance under the MWP Act is a smart way for any husband to ensure that the insurance proceeds are only claimed by the wife and children and not by any creditor or relatives. It will help you ensure that your life insurance policy effectively achieves your primary goal of securing the financial future of your family in case of your demise.Visit your insurer’s website or get in touch with their representatives to know more about the MWP Act and how you can purchase a policy that offers this benefit.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.