Hi there. Most insurance policies involve a lump sum payout in the event of the policyholder’s death. The person to whom the money is paid will depend on the type of policy and whether the policyholder has nominated a beneficiary to receive the money.

If the policyholder has nominated a beneficiary, then the insurer must pay the money to this person in the event of the policyholder’s death. If the nomination was validly made, then a third party is not ordinarily able to challenge the payout. Note that, if the life insurance is held through a superannuation fund, generally a payout can only be made to a nominated ‘dependent’, which is defined to include a spouse, amongst other things.

If the policyholder has not nominated a beneficiary, then the money will ordinarily be paid out to the policyholder’s estate in the event of their death. This means that the money will be pooled together with all the other assets of the deceased person and be distributed in accordance with their will.

If you are not named in the will or believe you are entitled to a greater share of the deceased person’s estate, you can challenge or contest the will. In Victoria, a spouse or domestic partner (including a former partner eligible to apply for a property settlement) can claim a ‘testator’s family maintenance’ in the Supreme Court of Victoria. The claimant will be entitled to a share of the deceased person’s estate if they can prove that the deceased person had a moral duty to provide for them. An application must be made within 6 months of the grant of probate being made.

Suggested way forward

You would benefit from speaking to a lawyer who can assess the exact nature of the insurance policy and advise you of your legal rights. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.