People invest for various reasons, such as preserving capital, growing it, or even having their children live a better life. While investment might be essential, there is a thing in it that many people ignore, and that is assigning a nominee. Assigning a nominee is truly essential as it keeps your investments safe.

Life can be unpredictable, and despite our best efforts, life can throw completely unexpected surprises our way. Think about it! What would happen to your hard-earned money and your investments if something happens to you?

If you go by logic, then these will pass on to your children or spouse. However, the chances of this happening, in reality, get bleak if you don't have a nominee in place.

Let's dive in and see what a nominee is and the importance of a nominee.

Who Is A Nominee?

If an investor dies, the individual or individuals who will receive the proceeds are called a nominee or nominees. The nominee is a beneficiary or the recipient of the assets, funds, and investments.

Looking at the severity, delicacy, and nature of the position, a nominee ideally is a family member that is very close to you may be a spouse, children, parents, or someone who is close to you outside your family.

What Is Nomination?

The process wherein you appoint a beneficiary for receiving the proceeds from the investments or assets is called Nomination. Upon the investor's demise, these proceeds are passed on to the nominee. You can make any of the following your nominee, and it depends on which type of investment you are making:

1. Parents
2. Spouse
3. Another family member
4. Sibling
5. Children
6. A friend

If you decide to make a minor your nominee, then you will have to provide details of their guardian acting as an Appointee.

Importance of Nomination

There is a key reason behind nominations and assigning nominees. If a person dies, their investments can be transferred to their nominee. In case there is no nominee assigned, the family or legal heirs will have to go through a long and tedious process to receive the investments and assets of the demised person.

There could be a long wait and delay in receiving the process in case there is no nomination. They would have to produce a will, certificate, or other documents proving their position. Such a situation can cause delays and strain situations for the unassigned nominee or next of kin.

If a nominee is assigned, they would just need to provide their address proof, bank details, and ID at the time of claim to have the investments transferred to their name.

Therefore, the investment transfer becomes very smooth and seamless.

Can You Change Your Nominee? 

You can change your nominee at any point of time. You can easily change your nominee online-or go to your investment branch physically and submit the documents necessary for the changes.

Is Nomination Essential?

It is essential to nominate a family member or a loved one as it will save the nominee from unwanted problems if the person in question dies. There are thousands of crores of unclaimed money lying across banks in our country. These accounts are those where the bank holder has deposited money and subsequently died, and the money is lying with the bank since no nominee had been filed against his account/investment.

These instances prove the issues one can face by not nominating someone as a nominee. You can appoint a nominee online or simply visit your investment branch.

Points To Remember While Appointing A Nominee

• Provide relevant details of the nominee including the relationship of the nominee with the investor
• Mention specific names and details of your nominee instead of generically writing "wife" or "children"
• Give details of a legal guardian or appointee if you are having a minor as your nominee
• Also, in case you wish to appoint more than 1 nominee, you need to disclose the % nomination assigned to each of the nominees (totaling 100%)

For instance, if you are a married man with 2 kids, you may decide to nominate your wife for 60% of your proceedings while nominating your children for 20% each, in case of any unfortunate event. Your kids, if minor, can have your father/mother acting as an appointee, till such time they turn major.

Conclusion

We advise you to reach out to the concerned authority and complete your nomination formalities as you will save your loved ones from a lot of hassles if something unexpected were to happen to you. This will be a great help to your loved ones in case of any unfortunate incident.

Now you know the importance of choosing a nominee and how simple it is to appoint a nominee for all your investments.