Superannuation – what happens on death?

As a member of the Zurich Master Superannuation Fund (the "Zurich Fund"), you can choose whether or not to make a Binding Death Benefit Nomination. Where the Trustee has consented to your Binding Death Benefit Nomination and, your benefit will be paid as a lump sum or pension (as applicable) to the person that you have nominated as long as your nomination remains valid and has been made in the required manner and the person is a dependant or a legal personal representative.

The main reason for making a Binding Death Benefit Nomination is for a greater level of certainty.  It enables you to nominate who gets what as long as it is valid on your death.  This can result in more efficient estate planning and can prevent disputes over your death benefits.

Who can you nominate?

For your Binding Death Benefit Nomination to be valid, each nominated beneficiary must be your Dependant or your Legal Personal Representative (generally the executor of your will or the administrator of your estate) as defined in our “Definitions” section.

Important: A Dependant must be alive and meet the definition of Dependant when you die. If a nominated beneficiary is not your Dependant, or your Legal Personal Representative, the portion of the benefit to be paid to that nominated beneficiary will be paid as if there is no valid Binding Death Benefit Nomination.

What happens if you don’t have a valid Binding Death Benefit Nomination?

You are under no obligation to make a Binding Death Benefit Nomination.

Where there is no valid Binding Death Benefit Nomination, the Trustee must pay the death benefit (or applicable proportion) in accordance with the trust deed provisions in force at the time of your death. Currently, this generally means that the benefit will be paid to your Legal Personal Representative, unless the Trustee:

• is unable to identify your Legal Personal Representative within 6 months of the Trustee being notified of your death; or
• has reason to believe your estate is insolvent

If the above apply, benefits are instead paid to your spouse or, if none, children in equal shares (where there are more than one). For example, if you have no spouse and two children, both children would receive 50%.

Note that a person is only a ‘spouse’ or a ‘child’ if the Trustee is aware of the person’s existence and is satisfied of their status as such. If there is no spouse or child, then the Trustee must pay the death benefit to your Legal Personal Representative (even if the estate is insolvent) or deal with the death benefit under applicable laws relating to unclaimed super.

What about your will?

Your will relates to the distribution of any assets that form part of your estate. Therefore, only that portion (if any) that is payable to your Legal Personal Representative (either as a nominated beneficiary or in the circumstances stated above where there is no valid Binding Death Benefit Nomination, or valid reversionary pension nomination) will fall under the direction of your will. If you have validly nominated individual beneficiaries such as your spouse or children to receive part, or all, of your superannuation monies, then this money will be paid to the individuals directly and will not form part of your estate.

This means that if you wish to change the manner in which your superannuation money will be distributed you may need to change or cancel your existing nomination by completing a new Binding Death Benefit Nomination form. It may not be sufficient to include alternate instructions in your will as this money may not form part of your estate.  You cannot change a reversionary beneficiary nomination for a pension product (which is made when you apply for that product).

How to set up a valid Binding Death Benefit Nomination?

To set up a Binding Death Benefit Nomination you must:

• be a member of the Zurich Fund;
• complete the Binding Death Benefit Nomination – Zurich Master Superannuation Fund form available by clicking here
• and send the original to the address shown on the form or email a scanned copy to client.services@zurich.com.au.  

For a valid nomination to be set up:

• the proportion of your death benefit to be paid to each beneficiary must be clearly set out (and total 100 per cent);
• the nomination must be signed and dated by you in the presence of two witnesses, both of whom are over 18 years of age and are not nominated to receive a benefit;
• each beneficiary you nominate must be your dependant or your legal personal representative; and
• the Trustee must receive and consent to your nomination prior to the date of death.

Note: A nomination only applies to the death benefit payable under each particular policy you hold in the Zurich Fund. Therefore, if you hold multiple interests in the Zurich Fund, each with respect to a different policy, any subsequent nomination in respect of an interest revokes a prior nomination in respect of that interest only - which will mean you need to complete a nomination form for each policy.

Where the Trustee has consented to your Binding Death Benefit Nomination, your benefit will be paid as a lump sum to the person(s) that you have nominated as long as your nomination remains valid and effective and has been made in the prescribed manner.

For a nomination to be valid:

• it clearly identifies the proportions in which the death benefit is to be allocated between nominated beneficiaries, if more than one (and total 100 per cent);
• the nomination is made in writing and signed and dated by you in the presence of two witnesses, both of whom are over 18 years of age and are not named as beneficiaries in your nomination (the Trustee does not accept a nomination signed by your Power of Attorney);
• the nomination must have been made, or confirmed within the 3 years before your death;
• it complies with any other form and content requirements of the Trustee from time to time; and
• you must not have revoked your nomination.

The Trustee can only consent to a nomination in respect of one or more of your dependants (as defined in superannuation law) or a legal personal representative. To remain a valid and effective nomination, a nominated beneficiary must still be a dependant or a legal personal representative at the time of death. If the Trustee has consented to your nomination and that nomination, or a part of it, is no longer valid and effective at the time of payment, the Trustee will not pay the death benefit in accordance with the nomination, or that part of it that is not valid and effective and will, instead, apply treat it as if no nomination has been made.  The process is set out in the section ‘No Nomination’.

If a nominated beneficiary is not your dependant or your legal personal representative at the date of your death, the portion of the benefit to be paid to that nominated beneficiary will be paid as if there is no valid Binding Death Benefit Nomination.

The nomination will cease to be valid and effective if you revoke it, it lapses in prescribed circumstances, or you make a new valid and effective nomination.

Details of any nomination that the Trustee has consented to will be included in your annual statement, however the validity and effectiveness of any nomination is finally determined by the Trustee at the date of death.

If you wish to make a Binding Death Benefit Nomination complete the Binding Death Benefit Nomination – Zurich Master Superannuation Fund form, available at https://www.zurich.com.au/content/dam/au-documents/personal/life-insurance/forms/binding-death-benefit-nomination-form.pdf. Or call the Zurich Customer Care team on 131 551 for a hard copy and return it to Zurich at Locked Bag 994, North Sydney 2059.   Making a Binding Death Benefit Nomination is an important part of your estate planning strategy and there could be social security or taxation implications for your potential beneficiaries. Therefore, we strongly recommend that you discuss your Binding Death Benefit Nomination with your tax adviser and financial adviser.

You must confirm your nomination every 3 years in order for it to remain valid. You can do this by:

• giving the Trustee a written notice, signed and dated by you, to that effect before it expire;
• completing a new Binding Death Benefit Nomination form at https://www.zurich.com.au/content/dam/au-documents/personal/life-insurance/forms/binding-death-benefit-nomination-form.pdf; or
• simply complete the confirmation form we send to you.

It is your responsibility to ensure your Binding Death Benefit Nomination is confirmed before it expires.

If you wish to amend your Binding Death Benefit Nomination, you need to complete and submit a new Binding Death Benefit Nomination form which will then completely replace your previous nomination.

One restriction on Binding Death Benefit Nominations is that they are only valid for three years because of restrictions under superannuation law.  This is to ensure that your nominations stay up to date with your current circumstances. 

You must confirm your nomination every three years in order for it to remain valid. You can do this by giving us a written notice, signed and dated by you, to that effect before it expires, or simply complete the confirmation form we send to you. It is your responsibility to ensure your Binding Death Benefit Nomination is confirmed before it expires.

Important:   If, after three years, you do not make another Binding Death Benefit Nomination, or reconfirm your nomination, your original instructions will no longer be binding, and the trustee will distribute as though there is no valid Binding Death Benefit Nomination in place.

Over time your individual situation may change (e.g. you may marry, enter a de-facto relationship, have a child or someone you have nominated has died) so it’s important you ensure your Binding Death Benefit Nomination remains current at all times.

You may revoke or change your nomination at any time by completing a new Binding Death Benefit Nomination form. It will come into effect once the Trustee has consented to it and will then completely replace your previous nomination.

Where there is no Binding Death Benefit Nomination or reversionary beneficiary nomination, or a binding death nomination has been made but it is ineffective in whole or in part, , the Trustee must pay the death benefit (or applicable proportion) in accordance with the trust deed. This generally means that the benefit will be paid to your legal personal representative (which may include an executor named in your will without a grant of probate where the death benefit is less than $100,000 or such other probate limit determined by the Trustee from time to time), unless the Trustee:

• has not identified your legal personal representative or a person who has filed an application for grant of probate or letters of administration within 6 months of the Trustee being notified of your death; or
• is notified, by a person that the Trustee considers reasonably qualified to form the view, that your estate (excluding, for this purpose, the death benefit) is insolvent because the estate’s assets (excluding, for this purpose, the death benefit payable from the Fund) will be exhausted in meeting the estate’s liabilities.

If either of the above apply, the benefit is instead paid to your spouse or, if none, your children (including an unborn child) in equal shares (where there are more than one). Note that a person is only a ‘spouse’ or a ‘child’ if the Trustee is aware of the person’s existence and is satisfied of their status as such.

If you have no spouse or children, the benefit is paid to your legal personal representative (even if your estate is insolvent) or, if the benefit is not paid to your legal personal representative, it must be dealt with as unclaimed money under government legislation.

We understand that that when a family member or loved one passes away, it is an emotional and stressful time.  Rest assured, we aim to make the process of applying for your loved one’s superannuation, and insurance benefit (where applicable), as straight-forward as possible for you.

The steps below summarise what is required when applying for a death benefit, and what Zurich will do when assessing the claim.

Step 1:   Notification of death.

The first step is for someone to notify Zurich of the member’s passing.  This can be done either in writing in the form of a letter or email, or a telephone call from the next of kin, another family member, the member’s financial adviser or representative.   When notifying Zurich, we will require the following information:

• The member’s name and date of birth
• The date of their death
• The policy number of their Zurich Master Superannuation Fund account (if known)
• Whether the member had a valid Will (if known)

We will also need to know the notifying person’s full name, relationship to the member, postal address, and the best phone number for Zurich to contact them on. 

Important:  The notifying person will be asked a number of security questions to ensure the protection of the deceased member’s information.

After being notified of the member’s passing, you will be provided with details of your Zurich Claim Specialist, who will manage the claim from start to finish.  They will help you through the claim process and let you know of any additional information that is required.

A couple of other things to note after Zurich have been notified of the member’s death:

• Your Zurich Claims Specialist will also suspend any current direct debit arrangements
• Investments will continue to be invested in the same strategy as the deceased had nominated.  Your Zurich Claims Specialist will assist you with the necessary requirements if the investment strategy is to be changed prior to the claim being approved.

Step 2:    Submit a completed claim form.

Once we are informed of a member’s death, your Zurich Claim Specialist will determine whether there is a current Binding Death Benefit Nomination on file.   This will ensure the appropriate Death Claim form is sent to you for completion.

Your Zurich Claims Specialist will let you know what supporting documents are required in addition to the completed claim form.  This may include the need for certified copies of the following:

About the deceased member:

• Death Certificate
• Proof of identity (e.g. Passport, driver’s license)
• The Will
• Probate (if claim is over $100K)
• Where the Deceased did not leave a Will - Letters of Administration (if estate nominated).

About the nominated beneficiary (as relevant)

• Marriage Certificate where the spouse or stepchild is a nominated beneficiary.
• If a De Facto is a nominated beneficiary, statutory declarations and other supporting documents required by the Dependant Identification Form - Binding Nomination (only if beneficiary is de facto, financial dependant or in an interdependency relationship with you)
• Birth Certificates for each child nominated together with adoption papers for adopted children.
• Proof of Identity for each nominated beneficiary (e.g. Birth Certificate, Passport or Driver’s License). 

Payment to the Estate

For estate payments, we need identification from at least one executor / legal personal representative.

If the claim is for $100,000 or more, we also require certified copies of Probate or Letters of Administration.

In addition to the above certified documents, we will also provide a Payment Information form, that will need to be completed by each valid beneficiary ensuring we have clear instructions where an approved claim is to be paid to.

We know the need to provide this information may be overwhelming during such a difficult time, but rest assured your Zurich Claims Specialist will work with you to ensure the claim can be finalised as smoothly as possible.

Step 3:  Claim assessment.

Once we have received the completed claim form and certified copies of the relevant documents, your Zurich Claims Specialist will assess the claim. 

Any decision about who is eligible to receive a payment will be influenced by whether the member made a Binding Death Benefit Nomination, a reversionary beneficiary nomination or if there was no valid nomination in place.

How long does it take to assess the claim and make a decision?

We aim to complete the assessment of the death benefit claim as quickly as possible once all the required documents have been received.  However, the claim assessment will take longer where:

• There is a delay in receiving the required documents.
• If the Binding Death Benefit Nomination on file is no longer valid.
• If a payment to the Estate is required and the Estate is insolvent or we cannot locate the Legal Personal Representative.
• The Trustee receives an objection to the decision.

Your Zurich Claims Specialist will provide you with regular progress updates.  And of course, you can contact them at any time you have questions or concerns about the claims process.

Step 4:   Death Benefit Payment.

Investment Component

After the death benefit claim has been assessed and the benefit processed, your Zurich Claims Specialist will notify the relevant beneficiaries or Legal Personal Representative. The benefit will then be paid according to the instructions we have received.

Insurance Component

Once the insurance claim has been approved, Zurich will notify the Trustee, who will review the claim and make a decision. Your Zurich Claims Specialist will inform the relevant beneficiaries or Legal Personal Representative via their preferred communication method that the insurance assessment is complete and has been referred to the Trustee.

Zurich will also determine if there had been any insurance premiums paid after the date of death and will include the refund of those premiums in the final payment.

After the Trustee confirms their decision, we will arrange for the insurance benefit to be paid in accordance with the instructions we have received.