Life insurance — including the kind you didn’t know about

Many Australians have default life insurance attached to their super account without realising it. It’s quietly deducted from their balance each month. If the person you’re helping had a super account, ring each fund and specifically ask: “Did this member have any insurance attached to their super?”

Some people also hold life insurance policies directly with an insurer — separate from super. Check email, bank statements, and the filing cabinet for signs of a life insurance provider. A direct debit labelled with the insurer’s name is often the first clue.

If the person had a mortgage, check with the lender whether there was any life insurance, income protection, or mortgage protection insurance attached to the loan. These policies can sometimes pay off the remaining balance.

Most super-based life insurance also includes terminal illness cover, which can be claimed while the person is still alive if two doctors certify a life expectancy of 24 months or less (varies by policy). The payout goes to the person, not the estate, and can make the final months easier. Ask the super fund about this specifically.

Total and Permanent Disability (TPD) insurance is a separate type — for people who can no longer work due to illness or injury. Also worth checking.

Each insurer has their own claim process. The super fund will coordinate super-based policies for you. For standalone policies, call the insurer’s bereavement line.

If a claim is rejected and you think it shouldn’t have been, you can escalate for free to the Australian Financial Complaints Authority (AFCA) at afca.org.au — they handle disputes about life insurance, super and financial services.