Life insurance policies are a necessity today. The level of financial protection provided by a life insurance policy can support a policyholder’s family in times of despair. The direct receivers of life insurance proceeds are the policyholder’s wife, children and/or parents.
However, the possibility of multiple creditors or other extended family members taking over the claim money for their use cannot be ignored. To avoid this, the Married Women’s Property Act 1874 was amended in 1923 to combine with insurance policies to guarantee the term life insurance policy benefits are secured for the spouse.
In this article, we will discuss the Married Women’s Property Act.
All About Married Women’s Property Act
The never-ending fight for women’s rights in our country dates back to early 1800. Women were often considered the dependent parties within the family, with almost no right to own assets. This often left the women helpless and moneyless in times of need, especially to support their children without a man.
The Married Women’s Property Act was introduced in 1874 to allow women to have property rights and complete ownership of their assets. Under this act, married women and their property cannot be claimed, used or owned by any other entity.
Whether it be her family members, parents, husband, children, or in-laws, nobody had any right to her assets, ensuring financial security for the female.
Term Insurance Policy Under Married Women’s Property Act
The main reason why a family’s breadwinner invests in a term life insurance policy is to provide his wife and children with a financial safety net that can support them in his absence.
However, the fear of other family members claiming the sum assured cannot be ignored. Thus, purchasing a term insurance policy under the MWP Act confirms complete protection of the claim settlement amount for the policyholder’s wife and children.
Here are two key features of a term insurance policy under the MWP Act.
- Under this act, the married man can purchase a term insurance policy solely for the financial benefits that his wife and children can avail.
- All the benefits, including death benefit and any other additional benefit combined with the policy, can only be used by the wife and children as direct dependents under this act.
Benefits of Term Insurance Policy Under the MWP Act
- Right to Nominate
Under the MWP Act, the policyholder gets nomination rights to nominate only his spouse as the sole receiver of the insurance policy proceeds in case of the policyholder’s sudden demise. This gives her complete authority over the benefits.
- Protection Against Liabilities
When you purchase a term insurance policy under the MWP Act, you shield your insurance money from legal claims or other creditors. Simply put, except for the nominated beneficiary, any financial debts or liabilities against your name as a policyholder have no right to claim a share of the payout.
- No Amendments Allowed
A policyholder who nominates his wife as the sole beneficiary of a term insurance plan under the MWP Act cannot reverse the nomination until the nominee’s consent is present. This provides the female with financial security even if things are not going well between the couple.
- Freedom
Married women who purchase term life insurance policies have complete freedom to choose whoever they want to nominate for their policies. This allows them full control over their financial assets and future financial security.
Final Thoughts
To protect the financial interests and requirements of a married woman and her family, the MWP Act in term life insurance policies is extremely beneficial. As a female, you receive peace of mind, better control, and guaranteed financial security in case of the demise of your husband.
Therefore, it is extremely necessary to understand the importance of the MWP Act for insurance and make a more informed decision for a secure future for you and your family.
