Superannuation fund life insurance proceeds in dispute
Millions of dollars in life insurance proceeds have been given away as a result of superannuation fund trustees ignoring the wishes of deceased policy holders.
As reported by The Australian on 2 July 2011, written instructions in wills and binding beneficiary death nominations are being contested by people who claim they are entitled to the death benefits of loved ones held inside super.
Over the years the issue has significantly escalated, now comprising of a third of all complaints made to the Superannuation Complaints Tribunal (SCT).
With the deterioration of family relationships in Australia, fights over life insurance proceeds inside super are becoming more complicated. Those involved in such disputes, including current and former spouses or defacto partners, and their respective children, are angered at the decisions being made.
Disputes have been further inflamed with people recruiting lawyers to fight their cases before the SCT.
Even more money is being spent in Federal Court appeals by infuriated people who don't get their own way.
Mr Russell Cain, CEO of xLife said that people should take the necessary precautions to ensure their proceeds go to the right people, irrespective of whether they have insurance in superannuation or not.
Mr Cain further stated that structuring your life insurance policy outside of superannuation may reduce the risk of your proceeds being contested or overturned.
"Your life insurance policy is potentially worth millions of dollars, so choose carefully as you will want the proceeds to end up in the right hands".