The Married women’s Property Act, 1874
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
married woman shall be considered to be her separate
women are absolute owners of the property vested in, or
acquired by them.
husbands, by marriage, do not acquire any interest in such
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
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
the proceeds on behalf of the Trust.
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
claim share in it.
may/may not be any insurance policies made specifically for
the purpose of policy under the Married Women’s Property Act, 1874.
policies can also be endorsed under the Married Women’s Property Act,
Position of Creditors
policy is taken under the Married Women’s Property Act, 1874
with an intention to defraud the Creditors, then the provisions of the
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
will not form part of the husband’s assets.
acquire rights on the policy only if all the beneficiaries
(provided they are competent to contract), relinquish their right
He does not
have any right to surrender the policy. The
beneficiaries only have a right to
surrender the policy.
Position of the Beneficiaries
having the interest in funds of the policy.
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
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
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
discharge to the insurance company for the policy proceeds. In fact, in
case of the life assured surviving the term of the insurance, the
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
proceeds. Even in case the life assured survives the term of the
cannot receive the policy proceeds. The proceeds go the trustees who in
will pay to be beneficiaries.
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
pages on Life Insurance: Life Insurance Riders
the Married Women's Property Act, 1874