(a) The designated beneficiary of a service or disability retiree who dies while receiving a service or disability retirement benefit may elect to receive:
(1) a lump-sum payment of $2,500, plus an applicable monthly benefit under Section 824.404; or
(2) a lump-sum benefit of $10,000.
(b) An eligible person may receive benefits under this section, Section 824.204, and Section 824.308.