Why creditors cannot lay claim on proceeds from term policy under MWPA

By: | Updated: October 17, 2018 12:12 AM

Take a term policy on your life such that in case of any unfortunate occurrence, your daughter does not have to struggle financially.

Creditors cannot lay claim on proceeds from term policy under MWPA

I am a 48-year old businessman and planning to take a home loan of Rs 1 crore lakh for 20 years. Should I take a term plan to cover the loan amount?
– C K Bhaskar
Yes, opt for a term insurance before you take a loan. Also, purchase the term policy under Married Woman Property Act (MWPA). This is useful in the sense that in case of any unfortunate event, the benefit of the term policy will be paid to your wife. No creditor can lay any claim on the proceeds that your family receives through a policy registered under MWPA.

I have two money back life insurance policies for sum assured of `20 lakh. Since I plan to get married next year, should I take some more cover and also a policy for my would-be-wife?
—D Kashyap
You should opt for a term policy with adequate sum assured. Term policies offer life coverage at the lowest cost and also offer riders. Speak to your financial advisor to evaluate the coverage required for you and your would-be wife. You may also refer to online calculators to evaluate the same.

I bought a Ulip six years back. I want to sell it as it is performing badly. Should I reinvest the amount in another Ulip or deposit it in my PPF and NPS accounts.
—Kanav Duggal
Ups and downs are a characteristic of equities. However, over long run, equities have the potential to offer superior returns. In your case, as six years have passed, there will be no surrender charges. However, charges in Ulip tend to decrease as policy term increases. Therefore staying invested for the long term and making disciplined investments offers the best chance to create wealth. Review your policy with your financial advisor and discuss the financial goal for which you had bought the product and then take a decision.

I am a single mother and my daughter is going abroad for post-graduation studies. Should I take a life insurance for her?
—Advik Duhan
As a single mother, there is a huge responsibility on you with respect to your daughter. Take a term policy on your life such that in case of any unfortunate occurrence, your daughter does not have to struggle financially.Also, review the riders which are offered with life insurance policies for comprehensive coverage.

By- Anjali Malhotra. The writer is chief customer, digital and marketing officer, Aviva Life Insurance.
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