Frequently Asked Questions Under MWP Act Policies

  1. Who can take MWP policy?

The policy can be taken by any married man, including a divorcee or a widower.

  1. Can karta of H.U.F take an M.W.P. policy?

H.U.F Karta can take policy for the benefit of his family without detriment to joint family funds. He must finance such policies out of his own separate income or out of loan on his A/C form HUF property.

  1. Can an existing policy be turned into MWP Policy?

Existing policy cannot be turned into MWP policy. At the time of inception of the contract, the time of proposal itself intention should be clear that insurance contract is for the express benefit of his wife and children or any of them. In view of this, existing policy cannot be turned into MWP policy.

  1. Who can bee beneficiaries?

Beneficiaries can be wife, Children, wife and children, i.e.any of them or all of them. All the above can be taken as a class or by their individual names.

A Muslim proposer has to name the beneficiaires. No provision can be made under Mohammedan Law for the benefit of wife as a class or children as a class.

Contingent Beneficiary:

A Non- Mohammedan Proposer can take a policy and the policy should be for the benefit of his named wife if she should survive him but in the event of her prior death, the benefit should pass on to his sons, daughters, sons & daughters named and /or  unnamed.

Can specific share be mentioned for each beneficiary?

The Life Assured can also describe the extent of the benefit of the beneficiaries, i.e. by equal shares or by way of fixed percentage.

Joint tenancy and tenants-in-common:

Where appointment of more than one beneficiary is to be made, it may be made either as joint tenants or tenants-in-common, i.e. should the benefit of the policy devolve on the surviving beneficiary instead of the legal heirs of the deceased beneficiary that is known as joint tenancy and should the benefit devolve on the death of the beneficiary to his legal heirs that is known as tenants –in-common.

  1. Who can appoint the Trustee?

Only the life assured can appoint the Trustee.

  1. Who Can be a Trustee?

Trustees can be any person other than the life assured which may include one of the beneficiaries, a person who may or may not be related to the beneficiaries or to the life assured.

Appointment of Trustee: The Trustee can be appointed at the time of proposal by filling the form of Addendum or it can be done later by a deed poll of appointment. The deed will have to be stamped since it forms  a separate contract.

  1. Can Banks act as Trustees?

The following Banks are official Trustees who have agreed to act as a Special Trustee: state Bank of India, Bank of India, Canara Bank, United Commercial Bank, Bank of Baroda And Syndicate Bank.

  1. Can the Trust be revoked?

If all the beneficiaries who are named are major and competent to contract and are of one mind, with their consent, the trust can be revoked.

Can the beneficiaries be changed?

  1. Change can be affected provided:

A] Beneficiaries are named

B] Beneficiaries are not mentioned as a class

C] All the beneficiaries are major and

d] Beneficiaries agree for such change

  1. In case of death of beneficiary to whom the benefits are payable?

On death of the beneficiary benefits will pass on to either the surviving beneficiary/ies or to the legal heirs of deceased beneficiary depending whether the beneficiaries are joint tenants or tenants-in-common.

  1. Whether loan can be raised under MWP Policy?

Loan can bee raised on the policy provided the Truste is given the express power in the original addendum or through a deed poll. The loan or the surrender value should be for the benefit of the beneficiary/ies.

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