Continuing the Knowledge Series- Today we are going to cover the Topic on Married Women Property Act(MWPA-1874) and it can help our clients to prevent their assets, as these assets can’t be attached to settle their Liabilities.
Today’s Topic: Understanding on Married Women Property Act
Married Women’s Property Act:
As the name suggests, this Act covers only married women. It was incorporated to protect properties owned by women from relatives, creditors and even from being attached in case of loans taken by their husbands.
The MWP Act helps provide protection against claims so that the insurance amount goes to no one but your wife and children. This is a fool-proof plan to provide security of property from husband’s creditors, the tax department, etc.
Benefits of MWP Act:
Let us say that the proposer (in this case the husband) has taken a business loan on his personal guarantee. The bank has the authority to attach his financial assets to recover the due amount in case something happens to him before the completion of the loan.
Life insurance policies are also entitled to be attached which means the claims that are paid on the death of the husband go to the bank and not to the surviving members. MWP Act makes sure the banker or creditor is unable to recover the amount from the insurance policy which was brought with the intention of protecting the family.
The idea behind MWP Act is that the entitlement of the life insurance proceeds are for the protection of the family, and the bank is not able to attach it, in any case.
If you have a home loan, it’s advisable to buy the insurance policy under MWP Act. This is way the house is protected in your absence and the entire death claim goes to your wife and children.
How to buy insurance under MWP Act:
When you buy insurance policy, you will be asked a question on whether you want to buy it under the MWP Act, all you have to do is select “Yes” for this question. This form is also provided by the life insurance company, Section 6 of the MWP Act covers life insurance. You have to then add your nominees (wife and children) as trustees. Only the trustees will have access to the trust, i.e., the money and no other person can claim the amount.
In case of death claim, policy proceeds cannot be claimed by creditors nor will it form part of the estate of the deceased. If the policy is bought under MWP, even your relatives or people who you may have borrowed money from in the past cannot make a claim and the welfare of the wife and children will be protected.
Who should opt for MWP Act:
- Businessman and salaried individuals with loans or liabilities.
- People who want to protect their wife/children from creditors/relatives who might have fraudulent intentions.
- The benefit amount with term life insurance can be a huge sum enough to financially protect someone’s future in your absence. So it will be a good decision if everybody who is buying term life insurance chooses to protect their loved ones under MWP Act.
MWP and existing policies:
Not just term plan but any life insurance policy can be covered under MWP Act. You have to make the choice at the time of buying the insurance policy. In case you already have a term insurance policy and you want to cover it under the MWP Act, you will have to opt for a new term insurance policy to be covered under the Act.
Buying life insurance under MWP Act can be a solution:
Life insurance under MWP Act is the easiest way to protect your dependant family members that too at no extra cost. So next time, you plan to buy an insurance plan, make sure you buy it under the MWP Act. This is particularly relevant in case of a joint family as there can be other claimants to the policy proceeds if the insured dies. Therefore, do not overlook it to avoid any legal hassles for surviving family members.
All married men should apply Life Insurance policy under the Married Women’s Property (MWP) Act, 1874, to safeguard families interest.
Please call me, in case any clarity is required.
Image and article originally from www.plindia.com. Read the original article here.