You have worked day in and out for the smile on your wife and child’s face, ensuring all their wishes and needs are always fulfilled. Wouldn’t you want a secured, hassle free life for your loved ones even when you are not around? Your business might face uncertainties at times, your relatives may start demanding a share out of your insurance income or your creditors might start demanding for payments from your insurance proceeds. An MWPA policy acts in favour at such uncertain times and helps ensure your wife and child’s future is secured.
At a Glance
Ringfencing your personal assets from business risks!
The Married Women’s Property Act, 1874 protects the financial rights of a wife on the maturity or death proceeds of her husband’s life insurance policy, if they are attached to repay outstanding loans in the event of his death or bankruptcy.
If a married man buys a life insurance on his life, with an endorsement registered under Section 6 of MWPA, then proceeds from life insurance will be effective property of his beneficiaries and not be treated as part of his estate. Therefore, the proceeds from insurance policy from MWP is isolated and de-risked from personal debts and cannot be used to repay his liabilities even after his death. None of the creditors will have any right over the policy unless it is done to defraud interest of genuine creditors. In case of a widower or a divorced man, the beneficiary under MWPA can be his children, both natural or adopted.
- Under this policy, any insurance policy undertaken by husband and endorsed under MWPA in favour of his wife or child or any one of them will lead to them being the beneficiaries of the policy.
- When a policy is taken, a trust is created wherein an adult beneficiary can be the trustee in case of unfortunate demise of husband or policy maturity. The beneficiaries receive the proceeds via trustees only.
- The policy is extended to widows and divorced men as well who look out to secure a bright future for their children.
- Adding to it, the entire procedure is hassle free and one can simply endorse their policy under MWPA. Just buy a Life Insurance policy and endorse it under MWPA, no additional cost or documentation involved.
How the solution works
- Step 1: Husband invests in Life Insurance Policy
- Step 2: He fills in a MWPA addendum making wife and / or children as beneficiary
- Step 3: Trust is automatically created with Beneficiaries as trustees
On death of Life Assured OR Maturity of the policy OR on surrender, the benefits are provided to the Trustees/ Beneficiaries