Don’t lose your Insurance Claim Money | MWP Act | Tamil | #shorts
#mwpact #insuranceclaim #terminsurance
We think that buying a term insurance policy will ensure the well-being of our family, specifically wife and children in case of any unforeseen events. Merely buying a life insurance cover alone will not necessarily ensure that your loved ones get the insurance amount in the event of your death. Your term life insurance claim money may not reach your nominee or beneficiary.
In your absence, it can be taken by your relatives or people who you may owe money (creditors). You can ensure that the sum assured is indeed passed on to your wife and children by taking a term insurance plan under the MWP Act.
For a married, male policyholder, availing a term insurance plan under the Married Women’s Property Act 1874 (MWP Act) helps in protecting your family’s financial interests in your absence. Once a policy is availed under the MWP Act, it may not be attached by courts for repayment of your debts*. Only your wife and children will be entitled to the sum assured in the event of your demise.
What is the MWP Act?
Under this act, Section 6 highlights its importance: “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 the MWP Act protect my family?
The term policy under the purview of MWP Act will be considered as a trust . Only trustees will have control on the policy, including servicing, and receipt of the benefit amount. In case of a death claim, the policy proceeds are received by the trust and can only be claimed by trustees. It cannot be claimed by creditors, relatives or form a part of the will (estate of the proposer)*. The trust shall be holding the claim proceeds for the benefit of the wife and/or child(ren). Hence, the financial future of your wife and children is protected.
For instance, if you are a salaried person with a home/ personal loan or the owner of a business and have accumulated debts, your creditors will have the first claim on your policy proceeds in the event of your death. When you buy term insurance under MWP Act, your wife and/or child(ren) will be the only ones who will have access to the claim amount – enabling you to secure their future financially.
This is also a excellent solution for a joint family setup, wherein there could be several complications in the ownership of property. Some fine prints might not being explicitly specified thereby increasing the scope of family disputes over money and property. In such cases, a policy covered under the MWP Act will give a clear title to the beneficiary.
The beneficiaries (wife and/or child(ren)) once mentioned in the policy remains unchanged throughout the term. Once the policy is issued, it will not be considered part of the insured’s business assets (estate), and so it cannot be targeted by the creditors/lenders of the business. This means that no one can exercise control over the benefit amount in the event of the insured’s demise, except the insured’s wife and child(ren) with which it seals their future in the right way.
How do you buy term insurance under the MWP Act ?
While you are buying the plan, in the application form, you will see this question: I would like to buy this policy under the Married Women’s Property Act (1874)
Just select “YES” for this question. Once selected, you will have to enter the beneficiary and trustee details e.g. the beneficiary name, relationship, date of birth and benefit share (in %). You can only choose your wife/child/children as beneficiaries. You can add multiple beneficiaries.
Who should opt for MWP Act?
Business people and salaried individuals with loans or liabilities.
People who want to protect their wife/child(ren) from creditors/relatives who might have fraudulent intentions.
The benefit amount with term life insurance can be a huge sum enough to protect your loved ones’ future in your absence financially. So it will be the ideal decision if everybody who is buying term life insurance chooses to protect their loved ones under the MWP Act.