04/12/2025
If you have life insurance and you pass away, your family doesnât automatically get the money first.
The insurance company will first use the money to pay off your debtsâlike home loans, car loans, personal loans, or business loans.
Only after paying all of that, whatever money is left goes to your wife and children.
To protect your family, especially if you have big loans, you should take your life insurance under Section 6 of the Married Womenâs Property Act (MWPA), 1874.
When you take a policy under the MWPA:
The money from your life insurance will go directly to your wife and children.
No one else can claim itânot banks, not lenders, not even parents.
You must choose MWPA at the time of buying the policy. You canât add it later.
But keep in mind:
When you take a home loan, banks often ask you to get a life insurance.
They wonât accept a policy under MWPA.
So, in that case, take two separate policiesâone for the bank and another under MWPA for your family.
Also, if the insurance is not a term plan and has a payout at maturity, that money will also go only to your wife and childrenâeven if youâre divorced.