FinBytes by Finwisor - MWP option Life Insurance

The purpose of life insurance policy, specifically term insurance is to provide financial protection to your family members in case of your untimely death. This enables the family members to maintain a similar standard of living even after one’s death.

What if you had a lot of liabilities say loans, business losses etc. at the time of death?

The money received from the insurance company after the death of the insured person will be claimed by the people to whom you owe the money and your family members will not receive any benefits from the insurance policy.

What is the solution?

This can be done simply by applying the policy with MWP Benefits.

What is MWP?

MWP means married woman property which gets covered under Married Women’s Property Act, 1874. Section 6 of the Married Women's Property Act (MWPA), 1874, provides that a policy of insurance effected by any married man on his own life and expressed on the face of it to be for the benefit of his wife, or of his wife and children, or any of them, shall ensure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them according to the interests so expressed, and shall not, so long as any object of the trust remains, be subject to the control of the husband, or to his creditors or form part of his estate.

How does it help?

Once you buy policy with MWP benefits, no one can claim the money received from insurance company other than your family members.

Who can buy this Policy?

Any married man can buy this policy to protect the future of his family under this act. So if you married, this policy is for you.

Who can be the beneficiaries and get insurance money?

·        The wife alone

·        Child / children (includes adopted children as well)

·        Wife and children together

·        All wives of Mohammedan person with specified percentage of share

How to take policy under MWP Act?

Only a small separate form needs to fill up with proposal form. The form will ask for family members details to be added as beneficiaries and percentage of share to be given to them.

Pros:

·        Safeguard your family against any future liability / creditors

·        Highly preferred if you are indulged in highly leveraged business (Debt oriented)

·        No rights of other legal heirs even in case of joint family

Cons:

·        Once opted this cannot be changed at any later stage even by yourself

·        Even the parents of insured cannot claim benefits of insurance money 

What do we suggest?

We suggest all business professional must go for MWP policy and even salaried employees should prefer this over normal term plan.

Since this leave your parents without financial security in your absence, you can nominate parents in other alternate investments for their financial security or you can break your insurance requirements in 2 parts one for your parents and one for wife and children under MWP policy.

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