Payment of claims.

(1) The contract shall include the following provision: “Payment of Claims: Benefits will be paid to the insured. Loss-of-life benefits are payable in accordance with the beneficiary designation in effect at the time of payment. If none is then in effect, the benefits will be paid to the insured’s estate. Any other benefits unpaid at death may be paid, at the insurer’s option, either to the insured’s beneficiary or estate.”

(2) The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer:

(a) “If benefits are payable to the insured’s estate or a beneficiary who cannot execute a valid release, the insurer can pay benefits up to $3,000 to someone related to the insured or beneficiary by blood or marriage whom the insurer considers to be entitled to the benefits. The insurer will be discharged to the extent of any such payment made in good faith.”

(b) “The insurer may pay all or a portion of any indemnities provided for health care services to the provider, unless the insured directs otherwise in writing by the time proofs of loss are filed. The insurer cannot require that the services be rendered by a particular provider.”