The insurance benefit shall be paid upon death of an insured member of this system to the beneficiary entitled to receive the basic or special death benefit if all of the following conditions occur:

1. (a) Death occurs during any of the following:

   1. (1) While in state service.
   2. (2) While absent from state service on military service or on approved leave of absence.
   3. (3) Within four months of discontinuance of state service.
   4. (4) While physically or mentally incapacitated for performance of duty continuously from discontinuance of state service.

2. (b) If either of the following exists:

   1. (1) Death occurs while a member and before the effective date of retirement.
   2. (2) If the optional settlement in Section 21456, 21457, 21459, 21475, 21475.5, 21476, 21476.5, or 21477, or an optional settlement in Section 21458, involving payment of an allowance throughout the life of the beneficiary, has not been elected and if an allowance under Section 21624, 21627, 21629, or 21630 is not payable, and death occurs on or after the effective date of retirement and before the mailing of a retirement allowance warrant.
3. (c) Death occurs during a period of insurance.

4. (d) Death occurs under circumstances other than those described in subparagraph (F) of paragraph (1) of subdivision (a) of Section 21530.

   If this section is in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that, if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.