Just to play devil's advocate...
If they player was/is insured, but the insurance company won't pay out because in their view, he wasn't correctly registered with Cardiff and therefore not yet a player, would it not be down to his old club to claim on their insurance?
Whatever the reasons are for this payment being disputed, no one is going to come away from this situation with any credit. It really shouldn't be played out in public, not when two families are grieving.