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Although your life insurance policy secures the future of your family, the benefits of the insurance are not guaranteed to pass on solely to your wife and children. Your relatives, creditors or bank may claim some part of the insurance benefit for clearing any outstanding debt or otherwise. In such a precarious situation, insuring yourself under the Married Women’s Property Act, 1874 (MWP Act) ensures that wife and children have the sole right over the benefits
What is the MWP Act?
The MWP Act or the Married Women’s Property Act provides for the absolute ownership of married women in any property acquired by them or vested in them. The husband cannot acquire any interest in any such property of the wife after the marriage.
This was a welfare act enacted in 1874 to ensure that wages, earnings, property, investments and savings by a married woman are her own property, separate from her husband’s and relatives. Consequently, her husband, in-laws or any relative cannot claim any right over her property.
What is MWP Act insurance?
Section 6 of the MWP Act lays down the safeguard for the benefits arising from insurance by a husband for the wife. The section states that when the husband purchases an insurance policy and makes his wife and children as the beneficiaries, the death benefit or any other bonuses arising out of it are to be awarded solely to his wife and children. This sum ceases to be a part of the husband’s property, and the creditors of the deceased husband cannot claim any part of this sum for fulfilling the dues and debts of the husband.
Who should opt for insurance with MWP Act?
- People who live in joint families or have close relatives should opt for insurance under MWP Act as there can be many claimants in the family. This will ensure that after the death of the policyholder, no family conflicts regarding the death benefit arise.
- People engaged in business and salaried jobs incur debts and have loans. Such persons should buy insurance plan under the MWP Act to ward off creditors, lenders or bank from clearing the debt or liabilities from the death benefit.
- Any person who has insecurity that the relatives or any other person, whether fraudulently or otherwise, may claim under the benefit from the insurance, must insure himself under this Act. The husband can name his wife and children, or both of them under the policy as his beneficiary.
What safeguards does the MWP Act have?
Purchasing an insurance policy under the MWP Act is wise as it protects your family, especially your dependents from the burden of debts and family disputes. If the policyholder has any debts or liabilities, the creditors can claim their due amount from the death benefits in case of a standard life insurance policy. However, in case of an MWP act insurance, the death benefit shall be the exclusive property of the wife and children. Neither the parents of the husband nor his creditors can recover any part from the benefit. The insurance benefit shall only pass on to the wife and children.