Is it legal for my wifes grandmother to have a life insurance policy out on her? Even though I have it for her through the army?

Im in the army i have term life inssurance on myself and my wife. My wife just found out that her grandmother has a $20,000.00 life insurrance policy on her. Her grandmother told her she didnt have life insurance on my wife when we got married. Under isurrable intrest or some other stipulation wouldn't this life insurrance be not allowed being there is no real reason for having a policy on my wife being that i have life insurence on my wife through the army? If this is legal, why? and if it is ilegal, why? - Is this your question? Add additional information