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Difference Between Nominee and Appointee Under A Life Insurance Policy?

Published On Oct 18, 2021 9:00 AM By InsuranceDekho

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Nomination is a facility that enables a deposit account holder, investor in mutual fund/other financial instruments or safe deposit locker holder to nominate an individual, who can claim the proceeds of the deposit account, investment or contents of the safe deposit locker, post the demise of the original depositor, investor or locker holder. A Nominee is a person whom you can list in your investment or bank application as the person who can receive the proceeds of your account in case of your unexpected death.

The nominee can be anyone you deem to be your first relative - your parents, spouse, kids, siblings etc. Some investments also allow you to have multiple nominees where you can assign percentages of your money to each one of them. If you don’t specify percentages, it is shared equally.

If someone makes a nomination in favour of a minor in that case he needs to appoint an appointee who can be any near relation who is dependable and he can receive claim on behalf of the minor in case insured dies during the minority of the child. In case the nominee is a minor an appointee is to be named in writing for dealing with policy proceeds if anything happens and policy money needs to be paid. The appointee has the legal right to give valid discharge but the proceed must be for the welfare of the child. 

Why Nominate Someone?

In case of the unfortunate event of one’s demise, one’s family/ near ones go through a very painful and difficult time of coping up with the loss. To add to this, whether we like it or not, financial security and means is necessary for the surviving partner or your close ones. All banks and financial institutions have standard and simpler processes for settling death claims, where nomination is clearly mentioned in the account or folio.

However, in absence of nomination, the process of settling a death claim may require a host of documents, including death, succession certificates, a will or a court order. Although it may sound simple on paper, it ends up being a long drawn process in real life and it is not a situation which you would want to put your loved ones at a time, which would anyways be an already emotionally painful situation for them.


Given the real purpose of life insurance, one cannot overstate the importance of appointing the right nominee. Therefore, ensure that you have the right person as your nominee. This will ensure that possible future disputes are avoided and the money is paid only to those whom you want.

Also read: What are Life Insurance Riders?

How Life Insurance Can Help You with Your Child's Dream

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.         

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