The nursing home said Mom had too much money in her account and it was standard practice that they buy a burial policy to take care of the excess amount. Is this normal procedure in a nursing home?

I just found a life insurance/burial policy that was taken out in my mother's name about a month before she passed away. The beneficiary was listed as one of the nursing home employees. I contacted the insurance company and they wouldn't dicuss the policy with me as I was not the beneficiary and referred me to the funeral home. I explained that my mother had dementia when the policy was taken out and no one had notified me about it and that she and my father both had pre-paid burial plans with another funeral home. The funeral home said she had too much money in her account and it was standard practice by the nursing home to buy a burial policy to take care of the excess amount in her account or DHS would take it. The policy was for an initial payment of $700 and 10 remaining payments of $700...and it doesn't appear that the signature is anywhere close to my mother's. Something just doesn't seem to be on the up and up to me. Is this a normal procedure in a nursing home?