Legal Question in Wills and Trusts in North Carolina

No. The beneficiary on a policy can use that money for whatever the beneficiary wants.

The only way that the policy proceeds would go to estate expenses are if the estate/trust of the deceased person was made the beneficiary of the policy, or if no beneficiary was designated. In either case, the proceeds then are paid into the probate or trust estate and then dispersed as per probate or the trust.