13.—(1) Where a contributor who is paying regular contributions to provide a lump sum death benefit dies when no election under regulation 5(2) has effect, the lump sum secured by those contributions shall become payable.
(2) Where on the death of a contributor an election under regulation 5(2) has effect—
(a)the Secretary of State shall apply the pension element by purchasing a pension policy from the authorised provider determined in accordance with paragraph (3) or (4) to provide the pension or pensions specified in the notice of election; and
(b)any balance of lump sum secured shall become payable.
(3) Any dependant for whom a pension is to be provided pursuant to paragraph (2) who has attained the age of 18 years at the date of death of the contributor may within six months of the date of death of the contributor make an election specifying the authorised provider by whom the pension is to be provided and where such an election is made the pension policy shall be purchased from that authorised provider.
(4) Where no election has been made pursuant to paragraph (3) the pension policy shall be purchased from the insurance company referred to in regulation 9.
(5) If at the time of the death of the contributor any person specified in a notice of election given under regulation 5(3) had died or ceased to be a dependant, the proportion of the lump sum death benefit that was to have been applied to the purchase of a pension for that person shall not be applied for that purpose, but shall be added to the balance becoming payable under paragraph (2)(b).