Importance of availing an insurance plan under the MWPA Act

Overview

A loss of a family member can be heartbreaking but if you’re the sole breadwinner of the family, the kind of rippling effect it can have on your family, especially your wife, can be gut-wrenching. Not only will she be emotionally affected but the financial shock she will go through will be consequential as well. There is more to protecting your family than simply being strong and taking the proverbial bullet for your wife or children. If your goal is to shelter your wife from the pain, potential, financial hardship can add to the existing emotional stress due to an unexpected family tragedy, availing an insurance plan under the Married Women's Property Act, 1874 (MWP Act) is a step in the right direction.

What is MWPA?

When you're young and single, you’re essentially a free spirit devoid of any responsibility towards anyone else barring yourself and your parents. However, once you get married, the entire scenario changes. Marriage entails that you’re now responsible, both on an emotional and financial level, for someone besides yourself.

Devised in the year 1874, MWPA stands for Marriage Women's Property Act. The MWP act in India was established to provide protection to women and safeguard their interests in various properties, from predatory relatives, troublesome creditors and even from their own husbands. She can thereby be assured that in case things were to take a sour turn after her husband's untimely demise or a divorce, she won't be left in a financial lurch, as the MWP act has been incorporated to avoid any undue difficulties.

What does opting for a life Insurance by a husband under MWPA mean for his wife and his family?

1. Section 6 of the MWP Act in India covers life insurance plans. By opting for a life insurance policy and getting it covered under the MWP Act & Life Insurance, you’re effectively safeguarding your wife and/or children’s’ interests. By assuring them that only they will be entitled to the Sum Assured (life insurance payout) in the event something untoward were to happen to you, you’re shielding them from potential legal and financial headaches.

2. The beneficiaries under this policy can be as under:

• Only your wife.
• Your child/ children alone which includes both natural as well as adopted children.
• Clubbing your wife and all your children together or either of them.

The beneficiaries mentioned in a policy endorsed under the MWP Act in Insurance cannot be changed once the policy has been issued. Even in case of a divorce, the beneficiaries will remain unchanged.

3. The benefits of the policy proceeds can be mentioned either as specific percentages to each beneficiary or as equal amounts in the Marriage Women's Property Act endorsement form.

4. Every policy taken out under the MWP act is automatically considered as a trust fund. However, you need to appoint trustees to handle the future funds and payouts. You can name your bank, a trusted lawyer, or any third person or family member, including your beneficiaries, as trustees. Furthermore, unlike beneficiaries, you have the right to change your trustees any time during the policy tenure.

5. Any type of life insurance policy can be endorsed to be covered under the MWP Act & Life Insurance. However, you need to keep in mind that the policy can be taken out only under your own name, i.e., the life assured has to be the proposer himself.

6. Additionally, this also means that in the event of your untimely demise, if you have any creditors to whom you owe money, they have no power to exercise any right over the policy proceeds as it cannot be attached by courts for repayment of your debts. Moreover, as a husband who’s taken out his policy on your own life in favor of your beneficiaries, even you or your parents will not have any rights to claim any survival benefits under the policy either. The MWP Act in India thereby assures that the welfare of your wife/child/children is taken care of during times of uncertainty and financial distress.

Who can use this?

Any married man residing in India (except for those residing in the state of Jammu and Kashmir) can take out a life insurance policy under the MWP Act in insurance. The term 'Married man' here also covers a divorcee and a widower. Further, this individual has the liberty to include the names of his children, as beneficiaries in a life insurance policy endorsed under the Marriage Women's Property Act. It also needs to be mentioned that a married woman can also take out an insurance policy under the MWP act, in her own name independent of her husband.

If you’re looking to add the MWP Act & Life Insurance benefit to a life insurance policy, the good news is that you can do so without any considerable expenditure. All you need to do is to notify your insurance provider at the time of applying for a policy that it needs to be endorsed under the MWP act in insurance and you should be sorted. However, you need to keep in mind that this endorsement can only be availed at the time of taking out a new policy as no changes to this regard will be permitted later on. A separate form which details out the name of your beneficiaries, the share of the benefits that need to be accrued to them and the trustees, will need to be filled out by you for the policy to be covered under the Marriage Women's Property Act.

The Bottom Line

Having a life insurance policy is quite similar to carrying an umbrella with you all the time: you might not need it most of the times but when it rains, you will be glad that you have one with you. A life insurance policy covered under the MWP act in India is what your family deserves and there’s no time like the present to start planning. After all, if something were to happen to you, the financial issues your wife and/or children will immediately be confronted with go far beyond losing an income.

About This Author

Shaheen Shaikh http://www.adrclinic.co.uk Joined: April 29th, 2018