The beneficiary can use the money however he or she wants. Usually it is used to take care of final expenses or another need that the insurance was taken out for but that is at the digression of the beneficiary. For example, a policy may have been taken out to help cover the mortgage with the spouse as beneficiary. Upon death the spouse may go ahead and pay off the mortgage or they may choose to do something else with the money, it is up to them.
Whether you are referring to borrowing from the cash value of a permanent life insurance policy, or spending the death benefit left to you as beneficiary on a policy of someone who passed, the life insurance money is yours to spend as you see fit.
If someone is taking out a lie insurance policy and wants the death benefit to be spent in a certain way, it is a good idea to set up a trust outlining those conditions, and then make the trust as the beneficiary of the policy.
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If someone is taking out a lie insurance policy and wants the death benefit to be spent in a certain way, it is a good idea to set up a trust outlining those conditions, and then make the trust as the beneficiary of the policy.