Lesson 7 of 8 · Married Women's Property Act

MWP vs Regular Life Insurance — Comparative Analysis

A point-by-point description of how an ordinary policy on a man's own life differs from one held under section 6 of the Married Women's Property Act, 1874: ownership and control, nomination, who receives the money, creditors and the estate.

Fact-checked 8 October 20263 practice questions in the game

Same cover, different legal position

The insurance under the two policies can be identical: the same life assured, the same sum assured, the same premium-payer. The difference lies in who the policy belongs to in law. This lesson sets the two side by side as a description, not as a ranking; each has consequences that may or may not fit a particular family.

The ordinary policy

An ordinary policy on a man's own life is his property. He can deal with it himself, on his own authority, for example by surrendering it under the insurer's procedure or by assigning it, which under section 38 of the Insurance Act, 1938 needs a signed and witnessed endorsement or instrument and notice to the insurer.

He names a nominee under section 39 of the Insurance Act, 1938. In Sarbati Devi v. Usha Devi (1984) the Supreme Court held that a nominee only receives the policy money, on behalf of the legal heirs. Since the 2015 amendment, effective 26 December 2014, section 39 makes parents, spouse and children nominated by a policyholder on his own life beneficial nominees, entitled to the money; the 1984 position now applies to other nominees.

The section 6 policy

A policy expressed on its face to be for the benefit of the wife, or the wife and children, is a trust for them under section 6. So long as any object of the trust remains, it is not subject to the husband's control or to his creditors and does not form part of his estate.

Three practical differences follow. First, the husband cannot deal with the policy alone as if it were his own property; a surrender or similar request is handled under the insurer's MWP terms, which set whose signatures are needed. He still pays the premiums and remains the life assured. Second, section 39 does not apply: section 39(12) of the Insurance Act excludes a policy to which section 6 applies, so there is no nominee, and the money goes to the trustee, or to the Official Trustee if there is none. Third, the policy is outside the estate and so does not pass under his will.

What stays the same, and the limit

The claim itself runs on the same rules: a death claim is to be settled within 15 days of intimation, or 45 days where investigation is needed, under IRDAI's Master Circular of 5 September 2024.

The protection of section 6 is not unconditional. If the policy was effected with intent to defraud creditors, they may still be paid out of the proceeds. And the price of the trust is flexibility: what the husband gains for his wife and children in separation from his affairs, he gives up in control over the policy.

Rules at a glance

OwnershipOrdinary policy: the policyholder's property. Section 6 policy: a trust for the wife and childrenMarried Women's Property Act, 1874, section 6

Surrender or assignmentOrdinary policy: on his own authority. Section 6 policy: under the insurer's MWP terms, which set whose signatures are neededSection 6: policy not subject to the husband's control

NominationOrdinary policy: section 39 applies. Section 6 policy: section 39 does not applyInsurance Act, 1938, section 39(12)

Who is paid on deathOrdinary policy: the nominee. Section 6 policy: the trustee, or the Official Trustee of the StateInsurance Act, 1938, section 39; MWP Act, section 6

Creditors and estateSection 6 policy: outside both, except where effected with intent to defraud creditorsSection 6; so long as any object of the trust remains

Death claim timelineSame for both: 15 days from intimation; 45 days where investigation is neededIRDAI Master Circular on Protection of Policyholders' Interests, 5 September 2024

Illustration

The same request on two policies

Illustration: Sanjay holds two policies on his own life, one ordinary and one under section 6 for his wife and son. Short of money, he writes to the insurer asking to surrender both.

The ordinary policy is his property, and the insurer acts on his signature alone. The section 6 policy is not subject to his control, so his signature alone is not enough: the request is dealt with under the insurer's MWP terms, which state whose signatures are needed and whether the request can be met at all.

Years later Sanjay dies. On the ordinary policy the insurer pays the nominee, his wife, who as a spouse is a beneficial nominee. On the section 6 policy there is no nominee; the insurer pays the trustee, who holds the money for his wife and son.

Key points

An ordinary policy on a man's own life is his property; he can surrender or assign it himself.
On an ordinary policy he names a nominee under section 39 of the Insurance Act, 1938.
A parent, spouse or child so nominated is a beneficial nominee; any other nominee receives the money on behalf of the legal heirs, as held in Sarbati Devi v. Usha Devi (1984).
A section 6 policy is a trust for the wife and children, outside the husband's control, his creditors and his estate so long as any object of the trust remains.
Section 39 does not apply to a section 6 policy; the money goes to the trustee or the Official Trustee.
Creditors may still be paid out of the proceeds of a section 6 policy effected with intent to defraud them.

Common misunderstandings

A nominee on an ordinary policy is not the same as a beneficiary under section 6: nomination is governed by section 39, which does not apply to a section 6 policy.
Sarbati Devi does not mean that every nominee holds for the heirs today: since the 2015 amendment, a nominated parent, spouse or child is a beneficial nominee.
A husband cannot surrender a section 6 policy on his own signature: it is not subject to his control so long as any object of the trust remains.
Placing a policy under section 6 does not end the husband's role: he still pays the premiums and remains the life assured.
A section 6 policy is not beyond creditors in every case: one effected with intent to defraud them remains open to them.

Questions people ask

What did the Supreme Court hold in Sarbati Devi v. Usha Devi?

That a nominee under section 39 only receives the policy money, on behalf of the legal heirs. Since the 2015 amendment that position applies to nominees other than parents, spouse and children.

Why is there no nominee on a section 6 policy?

Because section 39(12) of the Insurance Act says the nomination provisions do not apply to a policy to which section 6 applies. The trust decides who benefits.

Does a section 6 policy settle faster or slower on death?

Neither. The same claim timelines apply to both kinds of policy.

Is one of the two the better choice?

That cannot be said in general. They are different legal positions: one keeps the policy under the policyholder's control, the other sets it apart as a trust for the wife and children.

What this lesson relies on

Married Women's Property Act, 1874 — section 6
Insurance Act, 1938 — section 39, including section 39(12), as amended in 2015
Sarbati Devi v. Usha Devi (Supreme Court, 1984)
IRDAI Master Circular on Protection of Policyholders' Interests (5 September 2024)

This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.