First and foremost, let us try to comprehend what the MWP Act is. The Married Women’s Property (MWP) Act provides financial protection for the spouse in the case of the insured’s untimely death. It assures that the insurance policy benefits are preserved for the wife, independent of any unpaid debts owed by the husband.
Irrespective of whether you are the sole breadwinner for your family or not, you should always be in a position to fulfil all the financial needs of your family, if you are alive or even at your untimely death.
You purchase life insurance in order to provide for your wife and children in the unfortunate event that you die and are no longer able to support them financially. However, if you have an outstanding debt or have borrowed money from someone, your life insurance plans might be linked to the loan. In the event that you die before fully repaying the debt, the money from your life insurance policy might be utilized to make up for the bank loan repayment or for any other loan due to the creditors.
However, if the worst happens, you can use the MWP Act to safeguard the financial stability of your wife and children. The MWP Act was created to defend the rights of married women and their children. The concept behind this law is that the proceeds of a life insurance policy belong to the family and cannot be transferred to anyone else.
Section 6 of the MWP Act enables a married man who purchases a life insurance policy on his own life to have the policy considered to be a trust for the utilization of his wife or children. The intended recipients of this trust must be his wife or children, and the policy’s benefits cannot be given to anybody other than these recipients.
When you purchase a policy under the MWP Act, you establish a trust. You have to provide the trustees’ information, which may include your wife and/or children. You can also appoint numerous trustees at that time of taking the policy. In the future, only the trustees will be able to manage this trust. So no one aside from your wife and children (the trustees) may benefit from this trust. Once you establish this trust, you cannot revoke it or modify its beneficiaries in the future.
However, it should be noted that the provisions of the MWP Act cannot be incorporated into your existing life insurance plans. You can only choose to have a policy under the MWP Act when you purchase a new insurance policy.
