How insurance bought under the MWP Act can help protect your wife
insurance policies to provide for your wife and children in case something happens to you and you are no more to provide for them. But if you have an outstanding loan or have borrowed money from someone, your life insurance policies are entitled to be attached to the loan. In case you pass away before repaying the loan fully, your life insurance policy proceeds can be used to pay the bank or your creditor.
But you can secure your wife and children’s financial future if the worst happens to you. The Married Women’s Property Act (MWP Act) is here to enable you to do that. The MWP Act was incorporated to protect the rights of a married woman and her children.
The idea behind this act is that the benefits of a life insurance policy are for the family and no one else can take it, in any case. Section 6 of the MWP Act allows a married man who takes a life insurance policy on his own life to ensure that the policy is deemed to be a trust for the benefit of his wife or children. The beneficiaries of this trust can only be his wife or children and in no case the benefits from this policy can be paid to anyone other than the beneficiaries.
When you buy a policy under the MWP Act, you actually create a trust. You need to provide the details of the trustees who can be your wife and/ or children. You can also make multiple trustees at that time.
And this trust can only be operated by the trustees in future. So no one other than your wife and children (the trustees) can get the benefits from this trust. Once you create this trust, even you cannot undo it or change the beneficiaries in future.
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