Purchasing a MWP term plan is critical since the profits of the policy will only go to the beneficiaries and no one else.
Purchasing a term insurance plan for wife and children under the Married Women’s Property Act (MWPA), 1874 is crucial for a person since the claim amount will go straight to the beneficiaries and no creditor will be able to lay claim to the profits upon his death.
“Purchasing a term plan under MWP is vital since the insurance profits will solely go to the beneficiaries and no one else.” This ensures that, in the event of an individual’s death, the profits of the policy will only go to the wife, children, or both (as per the choice and % chosen at the time of policy issuance).”
“It is a useful feature to establish a separate estate for the wife and/or children, free of creditor claims and legal attachment.” It is particularly suitable for businesspeople and professionals,” says Karthik Raman, Chief Marketing Officer and Head of Products.
Here are some things you should know before purchasing a plan under the MWP Act:
What steps should a person take to purchase a term plan under the MWP Act?
A man (married/divorced/widower) may acquire a term plan under the MWP Act for the benefit of his wife or his children, or his wife and children, or any of them. A married lady might also buy it to provide financial stability for her kid or children.
“The option to purchase a term plan under the MWP Act should be chosen when purchasing the insurance.” “This option cannot be utilised once the insurance is purchased.”
Raman adds that the insurance may want him to fill out and sign an extra document to this effect in order to fulfil the MWPA standards.
Is it unique to other term plans?
According to Raman, it is no different from any other non-MWPA plan in terms of features. “The fundamental benefit of purchasing a MWPA term plan is that the amount insured under the plan is not susceptible to judicial attachment or creditors’ claims.” In other words, it establishes a distinct estate for the life insured’s wife and/or children,” he explains.
According to Parekh, the policy under the MWP Act differs in that the recipients are determined at the time of issue. Furthermore, the insurance money cannot be used to any responsibility of the life insured after death. The profits of the insurance must be distributed to the policy’s beneficiaries.
“In short,” writes Parekh, “the Act safeguards a woman’s entitlement to the profits of the insurance money against any other heir, creditor, or family.”
Is this accessible with all term plans?
According to experts, this option is often accessible with all term plans. However, the option may not be accessible for loan covers since the creditor or bank would want unlimited access to the insurance money as collateral.
Is there a fee for purchasing a term insurance plan the MWP Act?
The MWPA function comes at no extra cost.
What are some of the most popular term plans offered under the MWP Act?
According to Raman, most plans, both term and savings, are available via the MWPA; but, as previously stated, credit-linked plans may be subject to limits (i.e. loan covers).
What are the main elements to remember while purchasing an insurance under the MWP Act?
- Inform your insurer that you want to choose a term plan under the MWP Act. After the policy is released, you will not be able to edit or amend it.
- Because the earnings may only be distributed to policy beneficiaries, it is not advisable to use insurance funds to pay off debts.
- This is the finest solution for protecting the family’s financial requirements after the death of the life guaranteed since the money cannot be used for any other purpose.
- Beneficiaries cannot be altered afterwards.
“It is crucial to remember that even if the policyholder would get the plan via MWPA, owing to legal limits, he would not be able to manage the policy in the future since it would be allocated as part of his wife’s and/or children’s inheritance.” “The client would also have to take out further paperwork designating trustees to oversee the insurance and naming his wife and/or children as beneficiaries,” Raman explains.