Under section 6 Married Women’s Property (MWP) Act, all the properties belonging to the women, including insurance policy in the name of the husband purchased under MWPA, gets insulated from court attachments or any income tax attachments. For example, if husband were to default on his loan or personal guarantee provided by him, the properties belonging to his wife or Life policy insured by him in his own name under MWPA cannot be attached by court or income tax. In the other words, if wife is not a co-borrower in the loan, if she has not given her personal guarantees then her property, her assets, her incomes cannot be attached, just by the virtue of her being the wife of the person who has taken the loan or provided personal guarantee to someone who defaulted to repay his loan.
All kind of life insurance policies whether online or offline term policies are entitled to be issued under MWP Act. A married man insured on his own life may apply for policy under MWP act to protect his family from creditor or income tax attachments. As per Married Women’s Property act, a life insurance policy that’s insured by a married man on his own life and articulated on the face of it to be for the benefit of his wife, or of his wife and children, or any of them shall be deemed as a trust for the benefit of his wife. The term Married Man includes a widower and a divorcee who can name his children if he wishes can be named as beneficiaries. Under this act even if the husband and wife divorce after the policy is taken, the beneficiaries (wife and/or children) will continue to remain the same. The husband (insured) cannot change the beneficiaries of the policy subsequent to issuance of the policy. Even the husband’s parents won’t have any right to the benefits as long as the beneficiaries named in the policy are alive.
As per new clause under amendment to Insurance act 2015, if any married man residing in India (except J&K) nominates someone as a ‘beneficial nominee’ then unlike just a nominee, beneficial nominee becomes both the receiver and the final beneficiary. The new clause also makes it simpler for the policyholders to specify multiple beneficial nominees and their share in the proceeds. However, creditor’s right over assets of insured supersede that of beneficial nominee’s rights.