Your beneficiary should be able to use your life insurance policy to pay for a funeral in another state unless the insurer has placed an exception for some reason in the terms of the policy. It's important to remember that an insurer's willingness to pay depends on a variety of factors. Also, if the company merges with another one, the new insurer might change the terms. If the company goes bankrupt, the policy might also become partially or entirely worthless. In regards to state laws, you don't name your previous and current home states, which makes it difficult to say whether any rules in those states factor into your situation at all.
If you want to pre-pay for your funeral with your policy, for example, the rules in your current state might require that you make the funeral home director your beneficiary. Pre-paying can cause problems though for your loved ones. Some funeral home directors refuse to guarantee the total price for funeral arrangements since prices for funerals increase over the years with inflation. As a result, your policy might not cover the full cost of your funeral by the time you pass away. Worse yet, your loved ones might face difficulties if the funeral home goes out of business or if you decide suddenly to have your funeral somewhere else. The only way to find out the answers to these questions is by speaking with the director of the funeral home you've chosen, if applicable.
Again, since the policy is paid in full, your beneficiary or beneficiaries should be able to use it to pay for your funeral expenses. That said, the best way to know where you stand is by first reading your policy, especially the fine print, so that you can re-familiarize yourself with the terms that you read originally when you took out the policy. After you've read the entire document, call your life insurance agent for clarification and more details.