We strive hard for the well-being of our families until and unless we are alive. There might even be times when we borrow loans to fulfil their needs. But have you ever imagined what will happen to your families in your absence? While your family will suffer financially, the loan sharks might chase them if your past debts are unclear. An excellent way to ensure the security of your family in such scenarios is by purchasing an insurance product like a Unit Linked Insurance Plan (ULIP) under the Married Woman’s Property Act (MWPA), 1874.
Before buying a ULIP Policy, let’s begin by understanding what an MWPA is. Take a look below to know the working of MWPA:
What is Married Woman’s Property Act (MWPA)?
A Married Woman’s Property Act, 1874 has been formulated to protect the assets owned by your spouse against the creditors and the relatives. Section 6 of the MWPA covers any life insurance policy purchased by you for your wife and your kids. For instance, if you buy a ULIP insurance under the MWPA for your partner and children, the sum assured will be their property. The sum assured can neither be claimed by any lender nor will it be considered as a part of your business asset or estate.
The following criteria mentioned below must be fulfilled if you wish to opt for a ULIP Policy under the MWPA:
- You must be married
- You must be a resident of India
- In case you’re a widower or a divorcee, mention the name of your children as your beneficiaries. While the given criteria are essential, see to it that you purchase a ULIP policy in your name to avail the benefits.
Listing down the nominees plays a crucial role while purchasing a ULIP policy under the MWPA. Therefore, go through the following to understand whom can you include as your beneficiaries:
- Your wife
- Your child
- Your wife and your children, together
NOTE: Being a policyholder, you can either assign specific amount to each beneficiary or you can simply split the sum into equal proportions between the two beneficiaries. In case you opt for a divorce after you’ve appointed your wife as the beneficiary, you cannot change her name and she will continue to benefit from the policy. Therefore, see to it that you choose the beneficiaries carefully.
Apart from securing your spouse from the creditors, the MWPA allows you to do certain other things mentioned below. Take a look:
What more is possible under the MWPA?
- If you’re the policyholder, you cannot borrow a loan against any policy, which is endorsed under the MWPA.
- If you surrender a cash-value policy, the proceeds, which are due on surrendering will be provided to the beneficiaries.
- If you survive the term of the policy, the maturity proceeds will still be paid to the beneficiaries only.
As mentioned earlier, the safest way to protect your family in your absence is by buying a ULIP under the MWPA. Here’s how you can take a ULIP Policy under the MWPA:
- Submit the relevant details in your insurance application.
- Fill in the details mentioned in the addendum.
The security of our family is our top priority. We can go to any extent to ensure our families are sound and secure. To ensure your family’s financial protection, there’s nothing better than buying a ULIP Policy to do so. Since a ULIP plan is a dual benefit product, it will offer you with insurance as well as investment. Moreover, its flexible features like switching options, tax benefits, availability of multiple ULIP funds under one plan, and so forth make it possible to achieve your life goals easily.