Protect your family under the MWPA

It is often said that in India, you don’t marry the individual, you marry the entire family. While the world is grappling with loneliness, we Indians are enjoying the comforts of being cocooned in large families intertwined with cousins and relatives.

Joint families and relatives form an intrinsic part of the social fabric defining India and its cultures and traditions.

While on one hand the joint family system is an exemplary illustration of mutual trust and cooperation, on the other, it can lead to low financial independence and control over your own life and decisions.

Ability to adjust
Women in India are often commended for their ability to adjust and accept the nuances of a new family selflessly.

However, India is largely a patriarchal society with limited financial independence accorded to women.

Typically, the couple is conferred with a share of the monthly spend that is withdrawn from the family business in which the husband will have a stake. We rarely stop to think of any untoward incidence that may lead to this privilege being lost in the absence of the husband or the dissolution of the business.

Financial hurdles
It is therefore not only practical, but also necessary to secure women and their children from financial hurdles that life may bestow during its course.

We do not need to look very far for a solution. Section 6 of the Married Women’s Property Act (MWPA), 1874, provides a very simple route to protect the family by securing the assets of the survivors in case of the death of the breadwinner of the family or the insolvency of business.

The Act merely says that when a married man takes out a life insurance policy endorsed under the MWPA, irrespective of his demise or bankruptcy, the benefits as part of the life insurance policy are payable to the those nominated under this policy, which can either be the wife alone, the children (natural or adopted) or a combination of the wife as well as the children.

The proceeds from this policy are not accessible to creditors or other family members, or for that matter not even the husband himself.

Beneficiaries chosen
Any amount invested in this policy is payable to the beneficiaries chosen right at the beginning.

Hence, any money back received as part of the product structure or amount accumulated under a traditional endowment or unit linked plan will simply be payable to the beneficiary (wife and/or children) at the maturity of the policy.

This Act is not very well known, but was created to protect the married woman, and is applicable to all married women in India. A married man, a divorcee or a widower, residing in any state in India except J&K, can buy the policy.

It is often quoted that family is not an important thing, it is everything. Let us celebrate the beautiful nuances that come with a large support system, but also protect the little world that we have created within our universe.

(The writer is a Chief Strategy
Officer, IndiaFirst Life Insurance)