People make investments or take insurance covers to ensure a better future or to maintain the same standard of living after retirement or to ensure that the dreams of financially dependent family members don’t get ruined in case of unfortunate demise of the earning member of the family.
While there are many financial instruments available in the market, some are intended to transfer the risks (like insurances), some are to earn a risk-free returns (like Bonds, FDs and other small saving instruments) and some are for generating higher long-term returns (like equities, equity-oriented Mutual Fund (MF), etc).
However, after the demise of the investor, the family members can benefit from the investments, once the accumulated amount is transferred to the person(s) nominated by the investor (the nominee(s)) or to the legal heir(s). The process of such transfer is called transmission.
During the time lag between the date of death of an investor, till the death intimation is given or the death claim is made, different rules are applicable on different instruments regarding the rate of return or survival benefits payable during the period.
Kommentare