The answer to this question is simple: No, naming a funeral home or director as your beneficiary is not in your or your family’s best interest for several reasons. First, and foremost, there will be no discretion to how the funds are spent in taking care of your burial. Your family will not have any say and the funeral home has already been paid, so they are not obligated to your family.
Second, if the funeral home goes out of business, moves or otherwise found unfit to process funerals, you will have wasted your policy. Funeral directors like to push this type of sales pitch on people because it puts more money in their pocket. They are very good at pushing this agenda when one spouse has just died. It is never in your interest to comply with these sales pitches.
You should always name a beneficiary in your will that is close to you and will take care of your affairs. As an additional protection, an alternate beneficiary should be named, in case of an emergency.
Beneficiaries, as well as the policies themselves should be reviewed at least once a year to ensure that all information is correct and that the beneficiaries that are named are still good.