Yes, the money received from the insurance policy will help your living relatives to pay for your burial expenses. This would help to relieve the financial burdens of a funeral, the cost of a grave, etc. It is a part of providing for your family. 1 Timothy 5:8 (RSV), “If any one does not provide for his relatives, and especially for his own family, he has disowned the faith and is worse than an unbeliever.”
In the New Testament, a wealthy man named Joseph of Arimathea had planned for his death by preparing a tomb. Joseph was honored for his preparations. After our Lord died, Joseph had the privilege of offering his new tomb as the place to bury our Lord. Matthew 27:57-60 (RSV), 57 “When it was evening, there came a rich man from Arimathea, named Joseph, who also was a disciple of Jesus. 58 He went to Pilate and asked for the body of Jesus. Then Pilate ordered it to be given to him. 59 And Joseph took the body and wrapped it in a clean linen shroud, 60 and laid it in his own new tomb, which he had hewn in the rock; and he rolled a great stone to the door of the tomb and departed.”
Death is a sad and solemn occasion. Preparations should permit people to remember and to grieve the loss of that departed person. Death is an enemy (1 Corinthians 15:26).
Additional Resource:
Christian Questions Podcast: Relief from Grief
(Blog with audio and video links)