If you are newly married, your responsibilities will increase. Moreover, if you are planning to start a family soon, your expenses could rise. Emergencies can come announced, and you need to be prepared for them.
If you are the sole breadwinner of your household, wherein your spouse and other family members financially depend on you, it is your duty to safeguard their economic future. In the case of any untoward incident with you, your family will have to face financial hardships. You can prevent such a situation by investing in a term insurance plan. If you are planning to purchase a term policy, it is advisable to buy it under the Married Women’s Property Act, 1874. Let us understand about this Act and how it can be beneficial for your spouse.
What is the Married Women’s Property (MWP) Act, 1874?
As per Section 6 of the MWP Act, the assets possessed by the policyholder cannot be claimed by creditors to recover the debt amount, which he owed if he dies untimely. Let us explain this to you with an illustration.
Mukesh had taken a housing loan. Later, he met with an accident and passed away. In such a case, if Mukesh’s family is unable to repay the loan, the creditors can claim the assets owned by him to recover the amount. In such a scenario, his family will have to face a monetary burden. However, if Mukesh had bought term insurance plans in India under the MWP Act, his family would not go through financial turmoil.
One of the best things about purchasing a term plan under the MWP Act is that the policyholder is given assurance that the trustee will manage the death benefit proceeds if something unfortunate happens with him during the policy period. It means that no creditors can recover the debts from the death benefit received by the policyholder’s family. Therefore, by investing in a term plan under the MWP Act, you secure the future of your wife and children.
When you buy a life insurance term plan under the MWP Act, the insurer will provide the death benefit only to your wife and children during your absence. Investing in a term plan under this Act can be useful, especially if you are staying in a joint family. In such a set-up, there can be disputes within family members over money and ownership of property. When you buy a term plan under this Act, no one can change the beneficiary throughout the policy tenure.
Who should buy term plans under this Act?
You can invest in term policies under this Act if:
- You are a businessman or salaried professional with outstanding debts
- You want to safeguard the financial interest of your wife and children from the intentions of creditors or relatives
Here is another illustration to give you a proper understanding. Ramesh had borrowed loans from a bank to expand his business. He had invested in a term policy under the MWP Act, 1874, with his wife as the beneficiary. When Ramesh passed away during the policy duration, the bank had approached the court to claim their pending debts. However, as the policy was purchased under the MWP Act, 1874, the order was passed in the favor of Ramesh’s wife, and she received the death benefit.
This indicates that if you wish to assure the financial stability of your wife and children, it will be wise to invest in term insurance plans in India under this Act.
Do not leave your wife and kids in a financial mess during your absence. Remember that you opt for protection under the MWP Act only while buying the policy and not at a later date. So, take an intelligent decision at the right time.
