Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The following paragraphs have effect in relation to a contract of life insurance to the extent that the contract is expressed to be for the benefit of a third party beneficiary (who may be the life insured):
(a) the third party beneficiary has a right to recover from the insurer any money that becomes payable under the contract even though the third party beneficiary is not a party to the contract;
(b) if the third party beneficiary is not the life insured, any money paid to the third party beneficiary under the contract does not form part of the estate of the life insured.
(1A) Paragraph (1)(a) has effect in relation to a contract of life insurance that is maintained for the purposes of a superannuation or retirement scheme, subject to:
(a) the terms of the contract and the scheme; and
(b) any other law;
relating to the payment of money under the contract or the scheme.
(2) Subject to the contract, the third party beneficiary:
(a) has, in relation to the third party beneficiary's claim, the same obligations to the insurer as the third party beneficiary would have if the third party beneficiary were the insured; and
(b) may discharge the insured's obligations in relation to the payment of any money to the third party beneficiary under the contract.
(3) Nothing in this section restricts the capacity of a person to exercise any right or power under a contract of life insurance to which the person is a party. In particular, nothing in this section restricts the capacity of a person:
(a) to surrender a contract of life insurance to which the person is a party; or
(b) to borrow money on the security of a contract of life insurance; or
(c) to obtain a variation of a contract of life insurance, including a variation having the result that the contract ceases to be a contract to which this section applies.