Payment of benefits.

A group life insurance policy shall provide that any sum becoming due by reason of the death of the person insured be payable to the beneficiary designated by the person insured, except that, when the policy contains conditions pertaining to family status, the beneficiary may be the family member specified by the policy terms, subject to the provisions of the policy in the event there is no designated beneficiary living at the time of death of the person insured; all or any part of such sum shall be subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of the sum not exceeding $2,000 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured.