Life insurance after a death
Updated 20 August 2026 · 5 minute read
Life insurance is one of the faster-moving pieces of an estate — if you know where the policy is and who it names. Policies held directly (not through super) pay either a nominated beneficiary or the estate, and the two routes behave very differently.
Two routes, two speeds
- Valid nominated beneficiary — the insurer pays that person directly. No probate, no estate involvement; the money never becomes an estate asset and creditors generally can't touch it
- No nomination (or 'the estate' nominated) — the payout joins the estate, waits for the grant like everything else, and distributes under the will
Making the claim
Find the policies
Bank statements (premium debits), the deceased's email, insurance brokers, and employer group cover. Don't forget loan-protection and credit-card insurance — small policies hide everywhere.
Lodge the claim
Claim form, death certificate (or medical cause-of-death report), policy number, claimant ID. Insurers may seek medical records for recent policies.
The insurer decides
The Life Insurance Code of Practice requires a decision within six months of notification for death claims — straightforward nominated-beneficiary claims commonly pay within weeks.
If it stalls or declines
Ask for written reasons, then complain internally, then AFCA — free, and effective on process failures.
Most Australians' main life cover sits INSIDE super, where different rules apply — trustee discretion, dependants, tax on adult children. That's covered in super death benefits; check both.
Deaths within the first 13 months of a policy trigger non-disclosure reviews almost automatically. Answer the insurer's questions precisely and get advice before accepting any reduced offer.
Insurance plus an estate to run?
The claim and the grant can run in parallel — fixed-fee firms keep both moving.
Get fixed-fee probate quotesIs the payout taxed?
Direct life insurance to any beneficiary is generally tax-free outside super. Inside super, tax depends on dependency — a genuinely different regime.
The nomination is the ex-spouse — can that stand?
Direct-policy nominations usually survive divorce unless changed, and courts rarely disturb them. The estate route via family provision is the usual (hard) challenge path.
Funeral insurance too?
Funeral policies pay fast on minimal documents — usually within days — precisely to fund the funeral. Claim those first.
Sources
- Moneysmart — making a life insurance claim (Code of Practice six-month rule)
- AFCA — life insurance complaints