Everyone knows that life insurance coverage is crucial for people to protect themselves and their loved ones if any unfortunate situation arises. Individuals are even aware that they require a comprehensive term plan if they are the sole earning members of their family. However, simply buying a life insurance policy alone will not positively warrant that your family members receive the insurance amount in the case of your untimely demise.
This is because there is always a possibility that your life insurance claim payment might not reach your loved ones or beneficiary. This is where the Married Women’s Property Act (MWPA) comes into the picture. This act warrants that after the demise of the life insurer, the dependents receive the claim amount and not their creditors.
Also, covering your term insurance policy under the MWP act is a pretty effortless and inexpensive process. Every policyholder can use this route to protect their family members and ought not to spend any additional funds for the purpose.
Understanding MWP Act in Insurance
The MWP or Married Women's Property Act 1874 was enacted to guard the assets held by women from families, lenders and even from their spouses. Section 6 of the Married Women's Property Act likewise includes life insurance plans.
Any married man can get a life insurance plan under this MWPA insurance. This covers divorced people and widowers. Moreover, the beneficiaries included in the MWP act comprises the following:
a) The wife of the insured personb) The child/ children (both biological and adopted)c) Wife and kids collectively or any of them
Moreover, the MWPA policy amendment in 1923 asserted that the yields from the husband’s life insurance plan would be interpreted as the wife’s assets, and no person, including the creditors, can claim these funds.
In other terms, the death benefit obtained by a wife from her husband’s life insurance plan can solely be utilised to meet her expenses and those of her kids. Also, she is not accountable to pay off her husband’s debts from the life insurance, and no other individual can claim these funds other than the wife.
Who is Eligible for Life Insurance Coverage under the MWPA?
Buying a term life insurance policy under the Married Women's Property act is an excellent choice for all married men. Divorced men and widowed men can likewise buy a term insurance plan under this act. People eligible under the MWP act in insurance are as follows:
1. Salaried people
Most salaried people settle for loans to meet their long and short term goals. Home loans, personal loans, car loans, and many more can be significant financial products to cater to your requirements.
Nevertheless, in the unfortunate case of untimely demise, the liability to pay these mortgages can fall onto your spouse or kids. On the other hand, the MWP Act warrants that your wife and children never get burdened by your pending loans and can utilise the funds for their financial obligations without having to pay your creditors.
2. Self-employed people or business owners
Self-employed people or business owners might hold various loans and mortgages in their name. In your untimely demise, your lenders would demand your insurance yields to cover these loans. Nevertheless, a term insurance policy under the MWP Act will restrict the lenders from doing so. Also, the entire insurance amount will get transferred to the beneficiaries of the insured person.
3. Individuals residing in joint family setups
A joint family structure can be a little complicated. There have been several notorious instances where the wife and kids were not granted a stake in the family assets past the husband’s demise. This is where a term life insurance plan obtained under the MWP Act in insurance will ensure that your spouse and kids possess sufficient money to sustain themselves and move on with their lives. It additionally reduces the risks of other family members maltreating your insurance funds and diminishes outcast family conflicts.
How can the Married Women's Property Act Benefit your Family?
The MWP Act in insurance guarantees that your wife and kids hold a safety blanket to rely on in case of your untimely demise. In addition, the funds from term life insurance plans obtained under this MWP Act gets transferred to the wife and children of the deceased person.
No other lender can claim a part in the life insurance payout of such a policy. Therefore, even if the husband has an outstanding mortgage in his name, lenders cannot claim the life insurance payouts to reclaim the debt. Moreover, when you buy a term insurance plan guarded under the MWP Act, you warrant that your family remains safe against all likelihoods in your absence.
Term life insurance plans under MWP Act never get involved in your property. Hence, regardless of whether you possess a pending personal loan or company dues, no money lender can ask for a stake in the insurance policy. This way, your family remains financially guarded with the insurance funds and can lead their lives as they like.
While it is crucial to buy a good term life insurance plan, it is equally important to secure it with the married women's property act to guard your loved ones in case of your untimely demise. This MWP Act can support and empower helpless grieving families and assist them in moving on to the subsequent chapter of their lives.
Life insurance plans by Canara HSBC Oriental Bank of Commerce Life Insurance enables you to guard your family members with its unique features, cost-effective premiums, and a substantial sum assured. They likewise help you to add your spouse and kids as beneficiaries under the MWP Act and guard them against lenders in your absence.