The thought of “what may happen to my family when I am not around anymore” comes to almost all of our minds. This is why we try to save as well as invest as much money as is possible till the time we are alive. We want to make sure that our family is not going through any trouble in a situation when we are not around anymore. This is why many of us consider the concept of a term insurance policy. As we buy one such policy with a high sum assured, we feel secure about our family and almost feel certain that they can carry on with their lifestyle if something happens to us all of a sudden.
Did you know that if you have taken loans and are under debt, the sum assured that you think the nominees are supposed to get, may even be claimed by the creditor? Well, this is true! Just because you have been paying the premiums consistently and the names of your wife and child are there as nominees, it does not mean the money can only be claimed by the beneficiaries. The creditors have all the rights to claim the money. As a result, your fear of your family going through a financial crisis in your absence may come true. To avoid one such situation, you must buy a term insurance policy under MWP Act.
What is MWP Act?
MWP or Married Women’s Property Act was added in 1923 to the life insurance amendment. When you buy a term plan under MWP Act, the sum assured received cannot be considered as a part of your property. Even after the death of the husband, the sum assured cannot be used for paying off debts or any other kind of liability. Under this Act, the beneficiaries of the policy can be either or both the wife and children of the policyholder. One or more people can be added as the beneficiaries of the policy.
How to avail of it?
Buying a term insurance policy under MWP Act is very easy and does not involve a lot of costs. To purchase a policy under this Act, you have to fill up an MWP addendum along with the proposal form of life insurance. You can either ask for this addendum from an agent in the life insurance office or can simply download it from the website of the insurance company. You would be required to enter all the required details of the beneficiaries and share of benefits that would be provided to them. Once you enter the names of the beneficiaries in the form cannot be changed later. Also, you cannot take any loan based on this policy.
Why you should buy term insurance under MWP Act?
If you are married and considering buying a term insurance plan, you must purchase it under the MWP Act. Let us discuss some of the reasons for this:
- On the sudden demise of the husband, the sum assured can be claimed only by the wife and the children.
- It brings financial security to the family in your absence.
- The money can be used for the education of the children or their marriage and not for paying off debts.
Under this Act, a husband can make his wife the beneficiary of the term insurance policy, while it cannot work the other way round. If a woman buys a term insurance policy under the MWP Act, she can make her children the beneficiary of the policy.
If you now are determined of buying a term insurance plan under MWP Act, you first need to find a plan that is ideal for your family. And to do that, you must compare as many policies as possible. Browse through the website of IIFL to come across many such policies. Once you find the right one out, you can go proceed with the next steps.
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