GeneralFinancial Glossary
Nomination
Definition
The act of designating a person (nominee) to receive the proceeds of an insurance policy, bank account, mutual fund, or provident fund upon the account holder's death. A nominee acts as a custodian of the assets and is legally obligated to distribute them to the legal heirs as per the will or succession law.
Why It Matters
Nomination is not the same as a will. A nominee receives the assets for safekeeping but is not necessarily the legal owner. Always have both a nomination (for quick access) and a will (for legal ownership). Outdated nominations — listing ex-spouses or deceased parents — cause serious settlement delays.