Naming the beneficiaries is totally up to you and you can choose to name anyone you wish to be a beneficiary, regardless of whether or not the would-be beneficiaries are related to you or not; however, the application requires that your beneficiary or beneficiaries have an “insurable interest” in the insured. This means that there has to be some reason you want that person, relative or not, to be the beneficiary.
Commonly, the beneficiary or beneficiaries are spouses or children or other dependents. These people need the benefits of a life insurance policy, because these are the people who would suffer a loss if the insured was to die.
You can choose to either directly name your beneficiaries or have your “estate” named as the beneficiary. It is recommended that you name specific people unless you have a very specific reason for having the benefits go to your estate. It is also recommended that should you choose to have the benefits go to your estate, that you have a legal professional to dispense the benefits according to whatever manner you had intended for them to be dispensed.
Overall, however, the beneficiary or beneficiaries need to have a reason to receive the benefits and do not have to be related to the insured. It is also recommended to name a specific beneficiary or beneficiaries.