It is a sad fact that insurers do not always pay a claim, and particularly so when the claim is made for life insurance by a family member of someone who has passed.
An article regarding this has just been published by ABC: http://www.abc.net.au/news/2018-09-06/insurance-company-metlife-in-battle-with-widow-over-claims/10203502
A legal challenge to the decision of the insurance company in this case would be based on the fact that the insured should not have been sold a policy that did not suit their needs. While the insured did sign the policy documents, the contract may be held to be unconscionable because current product disclosure statements can run up to 100 pages. It is a timely reminder that it is best to have any contract reviewed by a qualified person and seek legal advice at the earliest opportunity.