Does Life Insurance Have To Be Used To Pay For A Funeral? 
The death benefit proceeds from a life insurance policy can be used however the beneficiary wishes . Similarly , if the owner of the policy takes cash value distributions via withdrawals and/or loans , use of the cash distributions from the policy is at the owner 's discretion . Just as an editorial comment -- people who purchase `` final expense '' life insurance policies DO intend the proceeds to be used for their burial ... 