personalfinanceforu

Personalfinanceforu.com

 

Life Insurance under the Married Women's Property Act, 1874

 

 

LINKS



 







 

 

      

The Married women’s Property Act, 1874

Provisions Relating to Life Insurance

 

Purpose of the Married Women’s Property Act, 1874:

˘  It is to ensure that the property of the married women is safeguarded.

˘  Earnings of married woman shall be considered to be her separate property.

˘  Married women are absolute owners of the property vested in, or acquired by them.

˘  Their husbands, by marriage, do not acquire any interest in such property.

 

    Life Insurance under the Married Women’s Property Act, 1874 (Section 6)
    Insurance taken by the husband on his life for the benefit of his wife and/or children creates a trust for the beneficiary.
    Once the policy matures, the proceeds are to be paid to the trustees who in turn will pay to the beneficiaries.
    Husband will not have any interest in the policy even if he is alive on the date of maturity.
    Creditors of husband cannot have any interest in the policy.

 

Difference Between normal policy and a policy under the Married Women’s Property Act, 1874:

˘  There is no provision for any nomination for any policy taken under the Act. Instead, Trustees will be appointed who will be entitled to receive the proceeds on behalf of the Trust.

˘  Normal policy is payable to nominee who can a valid discharge. Nominee receives funds on behalf of legal heirs.

˘  In case of a policy under the Act, the beneficiaries are the absolute owners of the funds and other legal heirs/creditors of husband cannot claim share in it.

˘  There may/may not be any insurance policies made specifically for the purpose of policy under the Married Women’s Property Act, 1874. Normal policies can also be endorsed under the Married Women’s Property Act, 1874.

 

Position of Creditors

˘  If the policy is taken under the Married Women’s Property Act, 1874 with an intention to defraud the Creditors, then the provisions of the Act shall not apply to such a policy.

˘  In such a case, the right of the creditor to be paid out of the proceeds of such a policy is not destroyed.

 

Position of the Husband

˘  The policy will not form part of the husband’s assets.

˘  He can acquire rights on the policy only if all the beneficiaries (provided they are competent to contract), relinquish their right before the policy matures.

˘  He does not have any right to surrender the policy.  The beneficiaries only have a right to surrender the policy.

 

Position of the Beneficiaries

˘  They are having the interest in funds of the policy.

˘  Can be trustee/s of the policy also.

˘  In case of death of the beneficiaries, the trust is automatically dissolved and the interest in property vests back to the husband.

 

Advantages of a policy under the Married Women’s Property Act, 1874

˘  The beneficiary is the absolute owner of the funds received unlike normal life insurance policy.

˘  This gives a secured future to the beneficiaries since creditors of husband or other legal heirs cannot claim a share in the proceeds.

˘  No need for the beneficiaries to wage a legal battle to receive policy proceeds.

 

In the case of a normal life insurance policy, the nominee is not the legal heir. The nominee has no legal position except that of giving a proper discharge to the insurance company for the policy proceeds. In fact, in the case of the life assured surviving the term of the insurance, the survival benefit is directly payable to the life assured.

 

In case of a policy endorsed under the Married Women’s Property Act, 1874, there is no nominee. The beneficiaries are absolute owners of the policy proceeds. Even in case the life assured survives the term of the insurance, he cannot receive the policy proceeds. The proceeds go the trustees who in turn will pay to be beneficiaries.

    

  Disclaimer: The information provided here is only for informative purposes and nothing more. It is not in any way to be construed as authoritative. Always consult your financial advisor before taking any decision. It is informed to the people that this information that is provided here is not to be acted upon. In spite of our advise, if any person acts upon the contents of this web site and incurs a loss, they do it on their own risk. We are not to be held responsible for any loss, incorrect information etc.

 Privacy Policy

 Other pages on Life Insurance: Life Insurance     Riders     Insurance under the Married Women's Property Act, 1874

 

Google
 



 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

© COPYRIGHT WWW.PERSONALFINANCEFORU.COM  ALL RIGHTS RESERVED