Rewrite #shorts #LifeInsurance
Did you know that if you pass away with amounts owed to creditors and heavy loans outstanding, the proceeds from your life insurance policy will legally first go to the lenders, and only the balance (if any left) will reach your family.
Thus, if you are a married man who has substantial loans or creditors as part of your business (or housing loans, etc as a salaried employee), please do tell your insurance provider to cover your policy under Section 6 of the Married Women’s Property Act (MWPA) 1874 at the time of purchase of such term insurance.
This coverage under MWPA ensures that your wife and children are beneficiaries of the term insurance, and no other creditor can claim this money (Parents cannot be made beneficiaries). This coverage cannot be made after purchase of the policy and has to be declared at the time of purchase.
Note:
1. Banks require you to take life insurance at the time of taking a housing loan. Banks would not approve your policy if covered under the MWPA because it does not serve their purpose.
2. If the life insurance is other than a term insurance where an amount is to be received on maturity, the amount received will also go to the wife and children and not be available to the man himself (even if married or divorced).
Read more: https://legislative.gov.in/sites/default/files/A1874-3.pdf
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of ’17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years. and make it seo optimized
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