What is the MWP Act?
Women's rights in India have always been an issue, when approached from a social, political or legal perspective. This is because women in familial roles (mothers, daughters, sisters and wives) are often dependent partly or wholly on the men of the family and rarely exercise any right over their own assets. This often leads them to be victims in property disputes and more often than not, women are left penniless without any financial security for herself or her dependent children.
Hence, the Married Women's Property Act, 1874 or the MWP was enacted to curb this injustice. The Act ensures that a married woman in India has a separate and sole right to her property. The MWP Act thus dictates that a married woman's separate property cannot be owned/used or claimed by anybody else, not even her husband, parents, in-laws, children or brothers. It is a legal safeguard for a woman's assets which assures her and her dependents' financial safety and is avail.
The MWP Act, 1874 was amended in 1923 to include life insurance policies made out in the name of the married woman or her children or both and Section 6 of the MWP Act reads:
"a policy of insurance effected by any married man on his own life and expressed on the face of it to be for the benefit of his wife, or of his wife and children, or any of them, shall ensure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them according to the interests so expressed, and shall not, so long as any object of the trust remains, be subject to the control of the husband, or to his creditors, or form part of his estate. "
Hence, the MWP Act entails that if a married man, including a divorcee or a widower, buys life insurance with the MWP addendum, the insurance benefits upon maturity or death are the sole property of nominated beneficiaries and no one else, including the policyholder himself, has any right over these benefits.
The entire sum is treated as separate from the policyholder's estate and hence, these benefits cannot be used for repayment of debt or loan or form part of joint family property, in case of untimely death of the policyholder.