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Buy Term Insurance under the MWP Act (Married Women’s Property Act)

  • 17th Jun 2019
  • 485
Buy Term Insurance under the MWP Act (Married Women’s Property Act)

The Married Women’s Property Act (MWP Act) had originally stated that an Indian married woman’s earnings are her own property. This act is included in the life insurance policy bought by any man and mandates that the money received by the wife from the policy is her property and it cannot be used to repay the husband’s liabilities.

How to buy term insurance under the MWP Act, 1874

Buying your term insurance plan under the MWP Act, 1874 is quite a simple process.

  • When you are filling out the insurance paper, you will find a question that if you wish to purchase term insurance under this Act
  • You have to select ‘Yes’ as your answer
  • If you select the option then you will have to provide information regarding your nominee, which includes name, date of birth, your relationship with the nominee, and the percentage of share
  • The policy under the MWP Act only allows your wife and children to be your nominees

Who all are covered under the MWP Act?

The MWP Act India allows you to buy a term plan that covers the financial requirements of your family in case something unfortunate happens to you. The nominees under the Act can be:

  • Only your wife
  • Only your children (both natural, as well as. adopted)
  • Your wife and children together

When you are buying the policy under this Act, you can also add trustees. According to the MWP Act in insurance, the trustees can be multiple people, including any of your nominees, or a financial institution/bank. It is not mandatory to include any trustee in the form and you can change the trustees at any time. If you choose to have trustees then you have to provide proof of their consent along with the insurance form.

Pros and cons of the MWP Act

Pros

  • The needs of the policyholder’s family are given priority
  • The MWP Act India is applicable to every married woman respective of their religion
  • The term insurance cover is used to protect the needs of the family and not for any other purpose
  • There is no requirement of creating a trust separately for your children
  • The Act helps women empowerment by providing them with financial security

Cons

  • The policyholder’s debt cannot be paid with the cover
  • There is no option to change beneficiaries
  • The policyholder needs consent from the adult nominees in writing to make any changes to the policy
  • The risk of misuse is higher

Illustration for a better explanation

Mr. Roy had bought a term insurance plan under the Married Women’s Property Act in India and added his wife and children as nominees. When he had suddenly passed away, the lender of his home loan demanded that their dues are paid using the sum assured received from the term insurance policy. The case was taken to court and the verdict was given in favor of the family. The MWP Act made sure that the wife and the children receive the money.

The purpose of the term insurance plan is to financially protect the family after the policyholder’s death. The MWP Act, 1874 ensures that even more effectively.

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