The motive of taking insurance is to provide financial support to the dependents in the absence of the policy holder. However, in many circumstances, the nominee may fail to get the death claim money after the demise of the life insured. There are several rules and regulations that govern the rights and eligibility of nominees, which even differs from investments to investments. The following are the important concepts about nomination in insurance. Who can be a nominee Ideally a person who has insurable interest on the life of the insured person, should be a nominee. That means A may be a nominee in B's insurance policy, if A's financial well being depends upon the survival of B. In other words, in case B's demise causes financial loss to A, then A may be a nominee in B's insurance policy. Based on this principle, nominees in life insurance are categorised into different classes. For example, mother, wife and children come in the first category of nominees; father and husband come in the second category; siblings in the third category etc, depending upon the degree of financial dependency. If you nominate a person who doesn't fall in such categories, he or she may not get the benefit in case of any eventuality. Role of a nominee According to the law, a nominee is not the owner of the assets, but a trustee who is legally bound to transfer the money or asset to the legal heirs of the insured person on his or her demise. In other words, a nominee is only a caretaker of your assets and will only hold your money\/asset as a trustee. So, if a nominee is not a legal heir, he or she can't use the nomination money or asset. Hence, the nominee does not get any other benefit except to receive the policy moneys on the death of the life assured, unless he or she is also a legal heir. So, be careful when you nominate a person in your life insurance policy. Why to nominate You may wonder, why to nominate a person if the legal heir is the beneficiary? It is nothing but to ensure that in case of the demise, the insurance money gets out of the insurance company and goes to someone you trust, and who can further help, in the process of passing it to your legal heirs. In case a nominee is not mentioned in a policy, it can turn out to be a disaster for the dependents to get a claim, as apart from producing all the papers needed to get the death claims, they have to first prove that they are the legal heirs. What if you don't have any legal heir or want to benefit any other person If you don't have any legal heir, better not to take a life insurance policy. In case you take one or a pension policy with the option of getting back the investment money, it is advisable that either you make a Will declaring the nominated person a legal heir or assign the policy to the person.