In my previous write-up Life Insurance – What to look for? I introduced a term called MWPA and mentioned that it needs a separate section. So, here it is ….
MWPA stands for Married Women’s Property Act. Under this act enacted in 1874, Section 6 highlights it’s importance: a policy of insurance effected by any married man on his own life and for the benefit of his wife and/or children, shall ensure and be deemed to be a trust for their benefit according to the interests so expressed. What this act does is that it protects your family’s financial interests in your absence. If you take a life insurance policy under the MWP Act, then it may not be attached by courts for repayment of any debt under your name and only your wife and/or children are entitled to the proceeds of the sum assured in the event of the demise of policy holder.
It is very simple. When a married man is purchasing life insurance, in the application form, there is a question on the same. You have to mention “Yes” and submit any documentation which may be required. Please do note that there is no additional premium to be paid for this option.
The term policy will be considered as a trust wherein only the trustees have control on the policy. In case of a death claim, the proceeds are received by the trust and can be claimed only by the trustees. It cannot be claimed by the creditors, relatives or even be a part of the Will. Thus, the financial future of the wife and children be protected by doing this simple inclusion. After all, when you take insurance, it is for a specific purpose, therefore why not do something which will ensure the same, if there is a demise.
Hope this write up was useful, especially for those who are planning to take life insurance for protecting their family members. So, if you do get approached by a financial advisor (IFA) or a life insurance agent, do check with them on MWPA. There is a high possibility that either they may not be aware, or may not be recommending since there is no additional monetary benefit. But, as you would have seen the benefits of endorsing under MWP Act fat outweighs the negatives and therefore there is no compelling reason for someone not to endorse it.
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