It's no brainer that an adequate life insurance is must for a family's protection in case of an untoward event with the breadwinner. But what if the same proceeds are claimed by the creditors and your family doesn't get a single penny out of it when it needs the most.  This can happen in a situation where one has a home loan running or a business that has piled up debts. The good news is such a situation can be avoided by simply endorsing the life insurance policy under MWPA Act. If you take an insurance policy under MWP Act, your life insurance policy is treated as a trust and claim proceeds are free from creditors, court and tax attachments.

What is Married Women's Property Act (MWPA)?
Married Women's Property Act 1874 (MWP Act) was created to protect the properties owned by women from relatives, creditors and even from their own husbands. The Section 6 of the MWP Act covers life insurance plans taken out by a married man on his own life for the benefit of his wife and children. Each policy under MWP Act is considered as a separate trust automatically.

Who can go for this?
Any married man can assign the life insurance policy under MWP Act. Divorced persons and widowers can avail it too. The good news is that all types of policies -endowment, term, money back, ULIP are covered under MWP Act. However, the person has to be the proposer himself.

Who can be the beneficiaries?
The beneficiaries can be:
1.    The wife alone
2.     The child/ children alone (both natural and adopted)
3.     Wife and Children together or any of them

The beneficiary would be entitled to proceeds in all situations - death, survival, paid - up or surrender claim of the policy.

Is it costly?
It isn't difficult or expensive to assign a life insurance policy under MWP Act. One just needs to fill up a MWP addendum along with the life insurance proposal form to avail its benefit in life insurance. The form can be availed through insurance agent or can be downloaded from the insurance company's website directly. One must fill in the details of the beneficiary & the share of benefits if there are more than one beneficiary.

Are there any downsides too?
Yes, getting a policy covered under MWPA act has several downsides too. Firstly, the policyholder cannot assign the policy to another person. Secondly, the policy cannot be used as collateral for taking up a loan. Also, in case the policyholder survives the term of the policy, the maturity proceeds would go to the beneficiaries instead of the policyholder himself.