Page 40 - Life Insurance underwriting Ebook IC 22

5. Understand the provisions of insurance under the Married Women Property
Act.

5.1 Provisions of the Married Women Property (MWP) Act

In 1874 the Indian Government passed the Married Women's Property Act, which allows
a married man to name an insurance policy in the benefit of his wife and children, and
thus protect it from creditors. Even if a man is a widower or divorced, he can still take
out an insurance policy under this Act and name it in the benefit of his children.

Section 6 of the MWP Act

Section 6 of the MWP Act provides that a policy effected by any married man on his
own office for the benefit of his wife or children shall 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 interest so
expressed, and shall not be subject to the control of the life assured (husband), or to his
creditors. Such policy shall also not form a part of the estate of the life assured.

5.2 Beneficiary under the Act

Under the MWP Act, the beneficiary can be:

 the wife alone; or
 one or more children (both natural and adopted); or
 the wife and one or more children jointly

5.3 Protection under the Act

The beneficiaries of the plan once declared cannot be changed at any time by the
proposer. It is to be noted that policies taken under the MWP Act can neither be claimed
by the other legal heirs nor by the husband's creditors. Even the husband cannot claim
any benefit. Therefore, an absolute estate is created in favor of the wife, or children, or
wife and children together.

As the policy issued under the MWP Act covers the life of an individual with
beneficiaries as mentioned above, it needs to be treated as personal insurance cover
for the purpose of financial underwriting. An income multiple approach or a need
analysis method can be used to arrive at the cover amount.

6. Describe the various sources of financial data

6.1 Sources of financial data

Like medical underwriting, the starting point of financial underwriting is the application
form. Based on the information provided in an individual's profile regarding age,

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