Nominee
A nominee has no rights over the money or assets unless that is specified under the will. So he or she is a mere custodian of the assets (except shares).
The role of nominee in various financial instruments.
Life insurance
The role of a nominee in life insurance is that of a custodian to receive the claim amount from the insurance company and distribute it to the legal heirs. In case, there is a Will, then the nominee has to settle the amount, as per the Will. A minor can be a nominee provided a guardian is specified.
Shares
The role of nominee is different in the case of shares. In this case, the nominee will get the right of the shares, in case of death of the party even though he is not the legal heir. A minor can be a nominee provided a guardian is specified.
As per the Companies Act, nomination supersedes Will.
Mutual Funds
You can make nomination while investing in mutual funds by writing the relevant details in the application form itself at folio level. Nomination can be made for maximum of 3 nominees. In case of multiple nominees, the percentage of allocation / share in favors of each of the nominees should be indicated against their name and such allocation / share should be in whole numbers without any decimals making a total of 100 percent. A minor can be a nominee provided a guardian is specified. Every new nomination in an existing folio will over write the existing nomination.