As we all know, the reason why a large no. of people choose to buy a life insurance is that by doing so they provide their family (dependents) a financial benefit in case of death of the insured.A life insurance policy ensures that after the death of insured, a specific sum of money is given to the beneficiaries designated in the insurance policy by the insured person.
The main purpose of life insurance is to counteract the reduction in income that a family group may have due to any circumstance that affects the life of a person such as death, disability, etc. of the insured person. In this way, the family group will be protected. The compensation is intended to cover all or part of the income lost from the death.
So what is the ultimate goal of life insurance?
We all wonder what will become of our family if something happens to us and especially if you are the economic breadwinner. Therefore, the main reason for taking out life insurance is the protection of the spouse, partner and children. Life insurance is a way to guarantee financial well-being so that you can continue with your financial obligations despite the loss of a loved one. (Read More: Why Diversification Is Important In Investment?)
But, having a life insurance does not mean that the insured person’s family will be able to get the financial assistance completely if the insured person dies. It is possible that this insured sum can be given to some other creditor or a person who is qualified enough to receive the money due to his/her rights.
It is likely that there could be another person capable of getting the benefits to which the beneficiaries were entitled. All this creates a sense of doubt among the family members of the insured, and here comes a special type of insurance- Life insurance under MWP (Married Women’s Property) Act. This type of insurance is offered by a lot of life insurance service providers, however, the best for you is to consult the team of RKFS for this matter.
Buying a life insurance under this act allows the family members of the insured, mainly his wife and children, to get the benefits from the insurance policy by preventing the creditors or other individuals who might supersede the rights offered to beneficiaries in normal insurance policy.
As per the wants of this individual, the insurance policy will make his wife and children the sole beneficiaries in case of death. One thing that should be kept in mind is that no other person than the wife and children of the insured person can claim the benefits under this type of insurance policy.
If, in a situation, where this married man gets divorced after buying this policy, the rights of his wife remains same, that is, to be able to get the sum insured under the insurance plan.