I don't know that there's any rule barring sale of beneficiary rights in a life insurance policy, nor do I think there should be any such rule, but I'm still a bit surprised that this is allowed.
Update: A former student and current solicitor tells me [this doesn't constitute legal advice, should not be interpreted as legal advice, etc] Section 43 of the Life Insurance Act 1908 allows such transfers; here's the form for assigning policy benefits to someone else. Again, this provision makes a ton of sense. But given that life insurance was illegal for a really long time because folks viewed it as betting on someone's death, that the 1908 legislation let somebody buy out your policy is a bit surprising. I'd have thought we'd have had policy failure due to voters viewing such markets as repugnant.