It is my understanding that if the policy wording states payment 'up to' a policy limit, in this case SDR100,000, then the insurers may ascertain the financial status of the deceased and make a payment accordingly.
If the policy is written as I have suggested then possibly, from a legal point of view, your father entered into a legal agreement when he accepted the flight, the Ts & Cs either being printed on the ticket or pointed out by the owner/operator, a responsibility they may or may not have fulfilled.
Strongly suggest you take legal advice as you will only get anecdotal and unqualified opinion here on PPRuNe.
Insurers aren't scum, they run a business and it is the insureds responsibility to make certain they know exactly what they are buying when they enter into an insurance agreement with an underwriter, 99.9% of people who buy insurance don't read the policy wording, too much trouble.