Each group life insurance policy shall contain a provision that any sum payable because of the death of the person insured shall be payable to the beneficiary or beneficiaries designated by the person insured, subject to:

1. The provisions of the policy as to all or any part of such sum if there is no designated beneficiary living at the time of death of the person insured; and

2. Any right reserved by the insurer in the policy and set forth in the certificate to pay a part of the sum, not exceeding $2,000, to any person appearing to the insurer to be equitably entitled thereto because of having incurred funeral or other expenses incident to the death or last illness of the person insured.