Life insurance

MWP Act – Married Women’s Property Act 1874- INSURANCE TERM PLAN

Insurance-Policy-with-MWP

One interesting & great legal tool in hand, but hardly been pushed by anyone.

What it means; at the time of initiating (buying) a term insurance policy, one should also sign this document. This document legally ensures that, post the policy holders demise, only wife will receive the policy cover value and not the creditors (policy holders outstanding with others) or relatives.

We take Term-Plan, to ensure the well-being of our family, specifically wife and children in case of any unforeseen events. Therefore, ensure that you sign this document.

Once a policy is availed under the MWP Act, it may not be attached by courts for repayment of your debts. Only your wife and children will be entitled to the Sum Assured in the event of your demise.

Insurance data – an eye opener

insurance claim form

When we say Insurance, what comes first in your mind? answer would be, LIC.

And if I further probe, what LIC means? answer would be, money back plan or some investment plan.

I was reading an article today in Mint, “Life insurance policies continue to die early”, prompted me to write this blog. As per the article, which is based on data analysis from IRDA (persistency ratios), it states that 2nd year renewal on Insurance policy stands below 80%, and 6th year renewal stands below 50%. Which means, every 2nd customer, is not renewing insurance policy after the 5th year. Why?

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Why a term insurance policy is the best life cover option?

Life Insurance

Gautam, a 28-year-old IT professional, has got married recently. His parents are financially dependent on him. He saves Rs.15,000 each month. He thinks his insurance requirement would be Rs. 50 lakh. For the term insurance plan that his relationship manager is recommending, his annual premium will be Rs. 10,000, payable over 30 years.

He thinks a term insurance is a bad choice because he will not get any ‘returns’ on it. It seems unprofitable to him, as he is unlikely to get back the amount he pays as premium. Is term insurance really a waste of money? Should Gautam consider an insurance cover which provides a good ‘return’ at the end of the tenure instead?

First, Gautam needs to be educated about the concept of insurance and the purpose of buying it. The only way to do that is for him to imagine how his family would fare, if he were to pass away tomorrow. Wouldn’t it make things difficult for his wife and parents?

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