I don't think there is a law against people who are out of status buying life insurance and making their citizen child a beneficiary. However, I would suggest that you discuss all the insurance policy at length with the insurance agent, and choose the one that is appropriate in this case.
As far as I know there is not a law that will prohibit this, especially with a TIN number.
Please be advised my answers to questions does not constitute legal advise and you should not rely on it, due to the fact that we have never met, I have not been aprised of the facts in you case nor have I reviewed any documents.
I don't know of any reason she could not.
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