Married Women’s Property Act: Give Your Wife an Exclusive Term Insurance Policy


If you are considering taking out a term insurance policy for the financial protection of your wife and children in your absence, be sure to purchase the policy under the Married Women’s Property Act 1874 (MWPA). In this case, the claim amount will go to them alone and no creditor of any of your outstanding loans can claim the proceeds after your death.

In normal term insurance coverage, the sum insured can be claimed by your creditors or seized by the court for repayment of your outstanding loans. If a person has an outstanding balance of any type, creditors will have the first claim on the proceeds of the insurance policy in the event of the death of the insured. An insurance policy under the MWPA will insulate the insured’s wife and children from any loans or debts they owe and their financial future will be protected. Only the beneficiaries named by the insured will receive the insurance proceeds after his death and neither creditors nor any government agency will have any claim or control over the policy proceeds.

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How it works
A married man who resides in India (excluding Jammu and Kashmir) can purchase a term insurance policy under the MWPA. Even a divorced or widower can purchase the policy and designate their children as beneficiaries. The insured shall assign specific percentages of the sum insured to each beneficiary. However, a wife cannot designate her husband as beneficiary and benefit from this law. She can purchase an MWP policy in her name and make her children the beneficiaries. The policy is beneficial for both employees and the self-employed.

When purchasing coverage, an MWP endorsement must be completed. However, after purchasing the policy under MWP, he cannot make any further changes to the policy endorsement and an existing modified term insurance policy under MWP. Since the beneficiary chosen when taking out the contract cannot be changed, in the event of divorce, the beneficiary of the insured, who is his wife, will remain the same. In this policy, the husband’s parents cannot be added as beneficiaries and they will have no rights to the insurance proceeds.

Points to note
The insurance policy covered by the MWP law cannot be transferred to another person and the policyholder cannot contract any loan on this policy. If the insured wife predeceases him, the legal heir of the policyholder will receive the amount of the claim. Experts suggest that it is always advisable to mention more than one beneficiary when purchasing the policy.

Experts say there is not much awareness of life insurance under MWP. Thus, life insurance being an ideal instrument to protect the financial future of his family members, a married man should opt for this coverage.

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