We save money and invest the funds in plans that we think will give us a good return. We do every possible thing to ensure our loved ones are secured for life through these investment plans. And to prepare for the uncertainties of life, many of us choose to buy a term insurance plan. As a matter of fact, term insurance is one of the prudent ways of investing in means that will safeguard your family in the event of your absence. You can rest assured that your family is financially secure and can even pay off any outstanding debts that you may have currently or that they may incur in the future. There are term insurance plans that provide a sum assured of up to INR 1 Crore or even more, which is a good amount for a small family.
Nevertheless, it is always better to be prepared for uncertain situations and when you are not there anymore, there may be chances where the sum assured is taken by greedy relatives or unethical creditors while your spouse and children may not be getting the money. To avoid one such situation, you can purchase a term plan under the MWP act 1874. Now let us discuss the Married Women’s Property Act, 1874.
What is the Married Women’s Property Act, 1874?
The Married Women’s Property Act, 1874, or MWP act was created to protect the properties owned by married women from creditors or relatives. The main purpose was to protect women’s rights even after their marriage. Under this act, a woman’s properties are protected even from her husband or parents.
Section 6 of this act covers life insurance plans as well. As you buy an insurance policy under this act, then it will be treated as a Trust. It assures that the death benefit can only be claimed by the wife of the deceased and not any relative or creditor. Apart from this, the claim proceeds do not come with any tax attachment.
Eligibility for an insurance policy under MWP Act
This policy can be taken by any married man, which even includes widowers and divorcees. The man has to take the policy in his name. Various types of insurance plans including money-back, term plan, and endowment plan can be taken under this act. A married woman can also take a term insurance policy under the MWP act in her name and make her children the beneficiaries of the policy. In one such case, her husband will not get any death benefit.
Requirements to purchase term insurance policy under the MWP act
Getting a term insurance policy under the MWP act 1874 is not at all difficult. The process is quite simple.
- While applying for the policy, you will get a separate MWP Act form, which has to be filled by you so that the policy is covered under the MWP Act
- You need to make sure that all the required details of the beneficiaries are provided. And if there is more than one beneficiary, the details of each of them have to be provided
- It is also very important to mention the name of the trustee; however, not mandatory
- You also need to be aware of the fact that if you already own an insurance policy, the MWP Act will be assigned to you
- The beneficiaries for this term insurance policy under the MWP Act can either be your wife, your child or children, or both your wife and children
Purchasing a term plan under MWP Act 1874 is recommended to those whose life is at risk, and there are existing debts. Also, someone who does not trust the relatives and creditors and feels these two can cheat his family in his absence.
Who should buy term insurance under this act?
- Term insurance under MWP Act can be bought by both businessmen as well as salaried individuals
- People who find the need to protect their wife and children from creditors and relatives can opt for term policy under this act
Purchasing a term insurance plan under the MWP Act will make sure that nobody can claim your insurance amount, apart from your wife and children when you are not around anymore. You can rest assured that they are financially secured. If you want to get more information about the term policies, especially under this act, you can visit IIFL’s website. You will also be able to check out more insurance policies and even compare them to select the best one.