Life insurance relies on the principle of insurable interest. This means that she can only have a policy on you if there is a financial reliance on you. She can however pay for a policy that you take out on yourself.
you can take out policies on virtually anyone. i know peeps that do this for a living. in anticipation of the payoff... i just couldnt do it myself (has to be agreed upon by the insured; usually done with incentive)