Tax on a life insurance payout?

She's likely to be right, not because it is a 'one off' payment but because it was (almost certainly) paid under something known as a 'discretionary trust' (usually a pension scheme, albeit in some cases one which only pays out death in service lump sums).

Put your mind at rest by checking with the company.

Life assurance (alas) can be taxed - be clear it is a potentially taxable transaction. As the money is passing to a spouse then there can be no tax as transfers spouse to spouse ar not taxable.

There will be an R27 along in the post and possibly a tax return if your father was in Self Assessment. The notes with the R27 are (very) comprehensive. Either she or the executor or the administrator completes the paperwork.

Was there a will? Has an executor been appointed? Is she going to pay a solicitor to do the paperwork?

The devil is in the detail

p.s. please accept my condolences

There's no tax to pay on life insurance payments relating to a death claim in the UK.