My son who passed away had 4 different superannuation funds and I have just been informed that he had death benefits on two of them, but someone else told me that you can only claim death benefits from one fund otherwise everyone would just have super and death benefit policies all over the place to maximise payouts. I can't seem to find any information online regarding this.
I believe the information you have been given is incorrect. If he had several death benefit policies it is no different to having several life insurance policies, and you should make a claim on the respective funds.
The only restriction as far as any form of insurance goes is policies for material loss, for example fire insurance policies. It is illegal to claim more than the value of the loss, so if multiple fire policies were held, you can only claim on one or partially claim on them all but for no more than the value of the loss.
Life insurance and superannuation are different.
I am NOT a lawyer. Anything said is NOT legal advice.
Please post your legal questions in a forum rather than sending a PM. Thanks.
Many superannuation funds have life insurance policies attached to them and the premiums for these are taken from the superannuation fund to which they attach. This means that even if a person stops contributing to the fund (say where a new employer uses a different superannuation fund) the premiums may still be paid out of the accumulated funds. For this reason people who change employment regularly and who never get around to rolling over their funds, may in fact have multiple life insurance policies attaching to their various funds.
Contrary to what your friend suggested, as the premiums for all these policies are being paid, there is nothing unfair about all the death benefits being triggered in the event that the subject dies.
Be aware (and I have personally encountered this), some fund managers will try to assert that the policies were only meant to be active whilst the person was contributing to the fund, and that therefore no benefit is payable. Do not accept this without strong legal advice. A life insurer which accepts a premium will likely be estopped (prevented on equitable grounds) from denying a benefit is payable in such circumstances, and will likely back down from this position if pressed.
In short, if the premiums have been paid, then the death benefit should be paid.
For the above reasons it is important for the executors/beneficiaries of even modest estates to throughly investigate the deceased's superannuation arrangements, as very considerable death benefits may be available in addition to the modest accumulations which may be apparent from a deceased persons records.
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