What situation allows a group life insurer to pay benefits without a designated beneficiary?

A group life insurer can pay benefits without a designated beneficiary under the facility of payment clause. This clause allows the insurer discretion in the benefit distribution process, which is particularly important in circumstances where the original beneficiary designation is unclear, outdated, or non-existent.

In practice, if a policyholder does not have a designated beneficiary at the time of their death, the insurer can utilize this clause to determine how to distribute the benefits, potentially paying them to a relative or another party deemed appropriate, thus preventing delays in benefit distribution. This facilitates a smoother process for beneficiaries who might otherwise find themselves in a complex situation regarding benefit claims.

The other options present various scenarios but do not provide the same clarity or authority as the facility of payment clause, which specifically addresses circumstances related to the absence of a designated beneficiary in a manner recognized by the insurance policy.