Importance of Buying Life Insurance Under The Married Women’s Property Act, 1974

Most people buy life insurance to provide financial security to their dependent family members. However, there is a chance that the entire benefit may not reach the spouse and children of the insured. If the insured has outstanding loans from various creditors, the life insurance benefit may be used to pay off these loans. Courts may also attach the sum assured benefit to the outstanding debt of the insured. This is why it is important to buy life insurance under the Married Women’s Property Act, 1974 (MWPA).

Buying life insurance under the MWPA protects women against the outstanding liabilities and debt incurred by their husbands. Let’s take a brief look at how this works and who can benefit by purchasing life insurance covers under MWPA.

What is the Married Women’s Property Act?

The Married Women’s Property Act, 1974 is an act formulated to protect the assets of a married woman against various entities including her husband. Under Section 6 of this Act, the benefits of a life insurance policy effected under this act cannot be controlled by the husband’s lenders. Moreover, the benefits also cannot become a part of the husband’s estate. In other words, the claim amount obtained from such a life insurance policy can be used only by the insured’s wife and his children. Even if the husband has outstanding loans or business liabilities, the creditors are not legally entitled to receive compensation from the life insurance proceeds.

How to buy life insurance covers under the MWPA?

The process of buying a life insurance cover under MWPA is simple. In the case of online policies, all you have to do is just fill an addendum stating that you would like to purchase this life cover under the Married Women’s Property Act, 1974. If you can’t find this option while purchasing the policy, you may ask the customer service department to guide you. In the case of offline policies, you may ask the insurance agent or the company official for this addendum. For obvious reasons, this feature can be availed only if you are married.

Protection offered by MWPA

A life insurance policy purchased under the MWPA is treated as a trust. Following the death of the insured person, the proceeds will go to the trust. Your dependents (wife and children) will be trustees who have the power to control the proceeds from the trust. The proceeds that are in the trust cannot be claimed by creditors or other relatives of the insured. In this way, the financial security of the insured’s wife and children can be ensured.

The beneficiaries of the policy must be mentioned at the time of purchase without fail. Once they have been named as beneficiaries under the MWPA, they cannot be changed throughout the policy term. Even in the case of a divorce, the beneficiary (wife) cannot be changed in the policy. This is applicable for term plans as well as plans with maturity benefits. For plans with maturity proceeds, the beneficiaries can claim the amount following the unexpected demise of the insured. Even if the insured survives the policy term, the maturity benefits will be provided only in the name of the beneficiaries. The same terms are also applicable when surrendering the policy.

Things to note when buying life insurance under MWPA

While buying a life insurance policy under the MWPA, you must consider the following things:

  • If there are multiple beneficiaries (wife and children) under the policy, the insured can decide on the percentage of the sum assured to be assigned for each one of them.
  • Only wife and children can be named as beneficiaries under the MWPA. It is not possible to name parents or other relatives as beneficiaries.
  • It is possible for widowers and divorcees to take a policy under the MWPA. In this case, the children alone can be named as beneficiaries.
  • A policy bought under MWPA is automatically considered as a trust. There is no need to create a separate trust or settlement deed under this policy.
  • If you have a maturity life insurance cover under MWPA, it is not possible to take any loan from this policy for any reason.

Who can benefit from this?

Buying a life insurance cover under MWPA is especially beneficial for the following individuals:

  • Salaried individuals who have outstanding loans including personal loans, home loans, vehicle loans, etc.
  • Business people who have business liabilities towards outside creditors or their partners
  • Individuals who wish to protect their dependents (wife and children) from other relatives in the family
  • Individuals who live in joint families where there could be other issues regarding property inheritance and ownership


When you buy a life insurance cover, you must make sure that the benefits of the policy are properly received by your dependents. If you are not careful, the sum assured benefit may be attached to your outstanding debts and your family members may lose out on a large chunk of the claim amount. If you have a wife and dependent children, naming them as beneficiaries in the policy is not enough. Make sure that you buy the policy under MWPA to ensure the financial security of your wife and children. By including this simple addendum, you could avoid getting your insurance benefit mixed up with family disputes and loan settlements.

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