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You may have strived hard towards creating a substantial saving for your family making the most of each investment option available be it shares, mutual funds, bank deposits, bonds or insurance.
But given a thought? What if God forbid something happened to you and your family is left clueless about who should receive how much of the total investment amount? What if these issues were reasons for major disputes in your family? To avoid such a situation it is in your interest to nominate the beneficiary before hand.
What is nomination: Nomination has legal standing. It is stating in writing who will receive the amount in question after your death. Though it is not compulsory it is in your interest to nominate to avoid future family disputes.
For that matter even your bank savings account, should have a nomination especially if the account is in a single name. If it is a joint account, with an either or survivor option the survivor of the two will receive the proceeds if anything unfortunate were to happen to the first account holder. In case of mutual funds, bonds etc through nomination you can be sure the desired individual will receive the money. Note that nomination is not a will in itself.
By nominating an individual you state that after your death the person nominated stands to receive the proceeds of be it mutual funds, bonds or any other investment avenue. In the absence of a nomination there will be more than one claimant and the legal hassles are many not to mention the time it could take after making you run from pillar to post and after all this the one who rightfully deserves may not receive the amount.
How to nominate: You can nominate another if you are over 18 years of age. Also you can change your nomination at any time. But you can nominate only one individual. If you have nominated more than one it is considered invalid.
How to claim the amount: To claim the proceeds you need to fill up the claim form and produce the death certificate of the individual.