Will your wife really get your life insurance money after you?

The sum assured in a life insurance policy is guaranteed as per the terms of the policy as long as the premiums are paid regularly and the policy is in the force, If the life insurance policy is or not covered under the married women policy act then the benefits enjoyed by that particular person. We know that life insurance cover is essential to protect ourselves and our family members in case of an unfortunate event. We are even aware that an individual need to buy adequate term plan if his family members are dependent on him. We also know that we need medical insurance as it protects us and our family financially in the event of an unexpected serious illness or injury that could be very expensive.

But many of us are not familiar with Married Women’s Property Act (MWPA). For instance: If you are a businessman and have accumulated debts, your creditors will have the first claim on your policy proceeds. To protect your family against such crisis, you need bring their policy under the scope of the Married Women’s Property (MWP) Act.

  • Life insurance policy with married women policy
    • Only beneficiary can get the benefit.
    • Beneficiary can be wife child or any.
    • Policy can be cancelled if the beneficiary agrees.
  • Life insurance policy without married women policy
    • Creditors can claim for benefit.
    • Beneficiary can be any one in the family.
    • Policy holder can cancel the policy.

What it means?

It means at the times of buying of term insurance policy one should also sign the document. This document legally ensures that post the policy holders demise only wife or children receives the sum assured value and not the creditors or relatives.

If I make my wife beneficiary and later we divorce or if she passes away before me will beneficiary of the policy continue?

The term insurance policy covered under the act of (MWP) the beneficiary once opted at the time of taking policy cannot be changed. So, when you appoint your wife as the beneficiary in case if you divorce your beneficiary(wife) will remain the Same. And in case if your wife passes away before you than the legal heir will be eligible to receive the claim amount. However most of time it is advisable to mention more than one beneficiary agent at the time of taking the policy.

Can parents be added as the beneficiary agent.?

No, the parents can’t be added as the beneficiary under the MWP act only wife/kid/kids can be chosen as beneficiaries.


Let’s consider a scenario – Mr. Ahuja, a salaried individual, took a home loan few years ago. He bought a term insurance policy online and endorsed it under MWP act with his spouse and children as the beneficiaries. After Mr. Ahuja’s sudden demise the bank approached the court to clear the home loan with the policy proceeds. The case got ruled out against them and the proceeds went to his wife and child as was protected under MWP act.

Let’s consider another scenario – Mr. Singh, a businessman and he borrowed some capital to expand his business he bought a term insurance policy online under the MWP act with his wife as the beneficiary. After the sudden demise of Mr. Singh his creditors approached the court and approached their rights to get paid out of the proceeds of the term insurance policy. Since the policy covered under the MWP act, the creditors lost the case and the sum assured benefit was ordered to be paid to his wife.

In both the above, scenarios, MWP act played a crucial role in protecting the future of the families.

(Family is not an important thing. It’s everything.)
                                                     – Michael J. fox

Blog Post Contributed by Alex Savier  from Moat Wealth Advisors

Leave a Reply