What is the MWP Act?

Protecting women’s rights and interests is society’s priority. The Married Women’s Property Act (MWP) has championed the same for many years in India. It ensures the safety of ownership of earnings, property, and any investments a married woman has.

The term insurance plan benefits nominees, such as family, wives, and children. The Married Women's Property (MWP) Act assures financial security for the spouse in the event of the insured person's untimely death. It ensures that the policy proceeds are protected for the wife, regardless of any outstanding loans left behind by the husband. Even if the husband had multiple lenders, the MWP Act safeguards the insurance money, guaranteeing the wife's well-being.

To understand more about this legislation and how it can be used for the benefit of married women, read on.

How the MWP Act Helps in Safeguarding Women’s Interests

The MWP Act ensures that a married woman in India has a separate and sole right to her property.

Also, the MWP Act ensures that a married woman's separate property cannot be owned, used, or claimed by anybody else. It is legal protection for a woman's financial assets.

The MWP Act assures her and her dependent's financial safety to the maximum extent possible through law. The MWP Act of 1874, was amended in 1923. This was done to incorporate life insurance policies made out in the name of the married woman, her children, or both.

How does the MWP Act protect my family?

Imagine you, as a husband, have bought a 1-crore term insurance policy. In the unfortunate event of your premature death, the policy will assure the sum that might safeguard the financial future of your wife and any dependent(s).

Now, the term insurance policy under the scope of the MWP Act will be regarded as a trust. So, in effect, the term insurance policy can be controlled only by trustees. This means any servicing and receiving the benefit amount will be the sole right of trustees. In case of a death claim, the trust will receive the policy proceeds and can only be claimed by trustees. Even if you have unpaid debt that amounts to crores of rupees, no creditor, relative, or anyone who forms a part of the Will can claim the insurance money.

The trust structure shall hold the insurance claim proceeds for the wife's benefit. Thus, you can see how the MWP Act makes sure the financial future of your wife and children is shielded from calamities.

If you do not buy term insurance under MWP Act, your creditors may have the first claim on your insurance money proceeds if you die before settling debts. But when you buy term insurance under MWP Act, your wife and children will be the only people who will enjoy the claim amount.

The MWP Act gives protection in the case of joint families, too, where there is a greater chance of family disputes over money and other assets. A policy covered under the MWP Act provides a clear title to the beneficiary, i.e., your wife.

Once the policy mentions the beneficiaries, they remain unchanged throughout the term. So, once the policy is issued, MWP Act in the insurance world virtually shifts the policy from under the legal estate of the husband, even if he is the insured person under the term insurance policy. This seals the future of your wife and children most fairly.

Who Should Opt for MWP Act?

Given the solid legal protection of the married women's property act, the following persons should seriously consider giving their spouse the benefit of the MWP Act.

Salaried individuals can purchase a term insurance policy under the MWP Act.

You can nominate only your wife and children if you buy term insurance under MWP Act. So, no other family member or legal heir will be able to lay a claim on the insurance money.

Business people and salaried individuals with significant loans should buy life insurance under MWP Act protection.

Any husband who wants to shield his wife and children from creditors or relatives with bad intentions should opt for insurance under the purview of the MWP Act.

Note that the beneficiary cannot be changed later, even if you divorce your wife.

Even if you are a widower or a divorcee, i.e., without a wife at the time of policy purchase, naming your children under the MWP Act can ensure legal protection of insurance benefits.

How to buy term insurance under the MWP Act, 1874?

When you complete the insurance paperwork, you will observe a question/option on purchasing term insurance under the MWP Act -- please select "Yes" as the answer. If you select "No", the protection under MWP Act will NOT be available.

When exercising the "Yes" option, you must provide information regarding your nominee and the percentage of shares. Do note that an insurance policy under the MWP Act only allows your wife and any children to be your nominees.

Nominee information sought under the MWP Act addendum in the insurance paper includes the nominee's name, date of birth, your current relationship with the nominee, etc.

Who all are covered under the MWP Act?

You will have to put nominees under the MWP Act to enable protection. There are multiple options.

The nominee under MWP Act in insurance can only be your wife.

If you do not have a wife, your nominees can be only your children. In this, both natural and adopted children can be your nominee.

When buying the policy under MWP Act, you can also add trustees.

So, as per the MWP Act in insurance, the trustees can be multiple people. This list can include any of your nominees or a financial institution, or a bank. Note that it is not mandatory to include any trustee in the form, and you can change their names. You must provide proof of trustee consent along with the insurance form paperwork.

Pros of the MWP Act

• One, the policyholder's family's needs are paramount and given priority.
• If the husband and wife divorce, the woman is still eligible and retains the beneficiary's rights.
• Three, buying an insurance policy under the purview of the MWP Act means there is no requirement to separately create a trust for a wife, children, or both.
• Four, the married women's property act aims to empower women by giving them the utmost financial security.

Frequently Asked Questions

Under the MWP Act, can I assign or take a loan on my policy?

The answer is 'No'. If the policy is covered under the MWP Act, 1874, such a policy cannot be assigned to another person. Such a policy cannot be used to take a loan under any form.

Can I surrender a policy that is covered under the MWP Act?

Yes, you may do so. But there is a process to be followed.

Firstly, the surrender request for a policy under MWP Act must come from the policyholder (insured person).

Secondly, the surrender request for a policy under MWP Act must be signed by the trustee or received from the trustee. This is important to know as the surrender proceeds are mandatorily paid to the trust to benefit the beneficiary/your nominee.

Can I change the beneficiary of the policy, If I nominate my wife as the beneficiary but we end up divorcing each other?

For any term policy that comes under the MWP Act in insurance purview, once the beneficiary has been opted for, that cannot be changed. When you appoint your wife as the beneficiary, she will remain the beneficiary even if you two end up divorcing each other.

What if my wife is the beneficiary of the policy, but she passes away before me?

In the unfortunate event, i.e., your beneficiary, here your wife, passes away before you, the legal heir of the policyholder, will be eligible to get the insurance claim amount. Therefore it may be better to put your wife and children's name as beneficiaries under MWP Act during policy purchase time.

Can I nominate my parents as beneficiaries under the MWP Act?

No, you cannot do that. As a law, The MWP Act covers your wife and children only.

Who will not participate in the MWP Act?

Any individual other than your wife and children cannot be part of the protection offered by the MWP Act.

Who can be the beneficiaries under MWPA or Married Women's Property Act?

Your wife, children (including adopted) or both can be the beneficiaries under the MWP Act. Under no situation can the husband or any other relative be a beneficiary if the policy is taken under the MWP Act in insurance purview.