Who gets the proceeds of term insurance if the holder passes away? Nominees, right? Nopes. Not always! To make sure that only nominees have right on the proceeds, you must take term insurance under MWP. What is the MWP(Married Women Property) act? It ensures that the proceeds of the policy are passed to your wife or children, & no-one else has any claim on it. How is it different from nominees? Well, a nominee has a right to proceeds only after loans, & creditor dues are paid. Imagine Mr. A took term insurance with a sum insured of Rs. 1 Cr. But the policy was not under MWP. If Mr. A passes away, then his creditors, bank who gave him loans would have first right on the proceeds. If he had taken the policy under MWP, no one except his family would have any claim on the 1 Cr. Applying under MWP requires just one extra paper. It doesn't change your premium or anything else. But once you take policy without the MWP, you can't add MWP clause later. You will have to take a new policy. And you would be older so the premium will be higher. So if you have already taken the insurance, please check if it is under MWP. If not, I would suggest taking a new policy & letting go of the old one. And if you are planning to take one, don't forget about MWP. Abhik Patel GrowFix.in
need to know more about this. Same case has been happened with my cousin sister. she is still fighting case for the nominee bank or her for term insurance. If i do have term insurance of LIC and I do have kept my wife as nominee and not filled the form of MWP then I should go for new policy?
Thank you giving this important information.
Thank you very much sir for the information
This is crucial information. Thanks for sharing this
Thanks for sharing Ajinkya Kulkarni
If everyone take mep, what should happen to poor creditors?
Suppose the insured has an outstanding loan of 1 cr and the insurance amount is under MWP. Although the lender doesn't have claim on the insurance proceeds, the legal heirs are bound to pay back the loan.... so they will have to find a way to do it, right? How would they proceed Ajinkya Kulkarni
Thanks for the information.. i will check my policy documents👍👍
Great. Thanks for sharing this unknown knowledge to many of us. 👍🏻
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4yDidn't know about MWP before. Thanks for writing about it!