What is accidental death insurance?

Published 26 May 2015

Many people have heard of accidental death insurance, but how much do you actually understand about it?

The reality is that accidents happen and by their very nature, are unexpected and often difficult to cope with. While accidental death insurance can't prevent these events from happening, it can prove effective at giving your family members better peace of mind.

As with any insurance policy, payments are made into a fund and if the policyholder passes away, their named beneficiaries will receive pay-outs to help cope with day to day living costs.

There are instances when death benefit claims might need to be made. The majority of superannuation funds offer death payments on top of any other insurance benefits, which are designed to support the surviving spouse and their dependents.

However, in some situations, people who believe they are entitled to the money you've paid into the policy won't receive funds. This is where the services of experienced superannuation lawyers can really come into their own.

Lodging a death benefit claim

There are certain people who can submit a death benefit claim on the deceased's estate. De facto partners and spouses are entitled to make a claim, as are children and anyone else who is financially dependent on your estate.

An appointed trustee will be responsible for dividing up the estate and deciding who will receive super payments in the event of your accidental death. Stating a claim to the money is therefore advisable sooner rather than later, as this gives the trustee an opportunity to determine whether it should be factored into their deliberations.

In some instances, you might need to provide documentation showing your relationship to the deceased. This will put you in much better legal stead if the death benefit case is eventually pursued through the courts.

Appealing decisions on accidental death insurance claims

It is possible that the ruling won't be what you'd hoped for, in which case, you can launch an appeal against the decision. This must be lodged within 28 days and there is also the opportunity to file an appeal with the Superannuation Complaints Tribunal a further 28 days down the line.

Several factors will be taken into consideration, including the level of your financial dependency on the deceased and how closely related you were. The actions of the trustee will likewise be analysed to ensure they were in line with the law.

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