What is Life Insurance?
Life insurance is also referred to as Death Benefits. All Australian super funds have life insurance or death benefits included in their policy. Some government and military super funds pay pensions to surviving partners or children.
When a loved one passes away, the hardship following their death is often compounded if they were a source of income for their dependents.
Who can claim?
All Super Funds in Australia offer benefits in the event of a loved one’s death. If you were a spouse, child, legal personal representative, or other dependent of someone who has passed away, you may be entitled to all or part of their super contributions and connected insurance benefits.
These benefits are designed to ease the burden of financial strife at this difficult time. It is recommended that you act to retrieve these benefits as quickly as possible, with the help of a legal professional, to ensure the Super Fund pays correctly.
Super death benefits are generally paid to the partner, children, dependents or legal personal representative of the deceased. All funds allow the policy holder to provide written binding nominations before their death directing the Super Fund Trustee as to who is to receive the death benefit payout. However without such a nomination the Super Fund Trustee has the discretion to decide this.
Who is entitled to receive
Some things you need to know about Superannuation life insurance / death benefits. Who can claim:
- Any dependant (legally married, de facto partner, children, financial dependants and inter dependant) of the deceased or their estate can claim super death benefits
- Same sex partners also qualify as de facto partners
- Children under MOST (not all) super funds include adult children, step-children and children of same-sex partners
- Financially dependent is defined as someone who is fully or partially reliant on the deceased for financial support
- Legal personal representative includes the executor of the Will or administrator of the estate of a deceased person
Time limits for disputing Death Benefits
There are strict time limits that apply to disputing decisions made about the distribution of death benefits so you should seek urgent advice especially if you have received notification of a claim decision from the super fund.
Binding superannuation nomination
Nominating the person you prefer to receive your superannuation can be done in a binding and non-binding way. A binding nomination must be followed by the super fund provided the nomination remains current and valid at the time of death.
Some binding nominations can be disputed. For example some funds require the nomination to be made to a dependant, and the definition of dependant will potentially change from fund to fund. An ex wife who met the definition at the time of the nomination when married to the member may not meet the definition after a divorce or separation.