(a) Unless a member has directed otherwise on a form prescribed by the board of trustees and filed with the retirement system:
(1) an optional group term life benefit under Section 844.503 is payable to the person entitled to receive the decedent's accumulated contributions, unless the decedent was an eligible member under Section 844.407, in which case the benefit is payable to the beneficiary designated by the decedent or, if no designation was made, to the person entitled under that section to receive a survivor annuity; and
(2) an optional group term life benefit under Section 844.504 is payable to a person entitled to receive any remaining payments of the decedent's annuity.
(b) If a person entitled under this section to receive an optional group term life benefit does not survive the member or retiree covered by the optional group term life program, the benefit is payable to the person to whom a benefit under Subchapter B or D is payable, or if no benefit is payable under those subchapters, to the person to whom a benefit under Subchapter E is or would be payable.