Termination of life insurance - bank refuses consent

Hello everyone.

I am interested in the professional assessment of the following matter:

A borrower has a real estate financing with the bank.

Remaining term = 3 years. He only pays the accrued interest.

The repayment is made through 2 life insurance policies – also due in 3 years.

Outstanding claim = 45,000 €

Already accumulated insurance sum, or current surrender value if the life insurance is cancelled:

Insurance 1 = 55,000 €

Insurance 2 = 30,000 €

The borrower has to pay 500 € per month for both insurances.

The return on the insurances is constantly decreasing due to the situation in the capital market.

Now the borrower wants to cancel Insurance 1 in order to reduce the monthly burden and repay the loan early.

Alternatively, if an early repayment including prepayment penalty is not possible (fixed interest rate until 02/2018), it would be possible to deposit the sum into a blocked account / overnight money account of the bank so that the bank has access to it when the loan is due.

The bank has rejected these proposals and insists on fulfillment of the contract.

Thus, the borrower would still have to bear the monthly burden of 500 € in order to maintain both insurances.

Question: Does the borrower really have to accept that the bank does not release an insurance policy, even though the loan is already secured with both insurances at 188 %?

And there is also the counter value of the property.

Shouldn't 100 % coverage be sufficient?

Thank you for your answers.

Why should the bank reject something like that? There are factual components here that are missing in your description. Also, in such requests, there is never a response that says: "We insist on contract compliance," but in almost all cases, a reason for the rejection follows (which must not be denied maliciously). In the end, it is always fiduciary collateral, i.e., trustee provisions.

So the complete facts would already be appropriate here.

This is the complete factual situation after a telephone consultation with the responsible caseworker at the bank. Nothing has been done in writing yet because the bank first wanted to explain the general procedure. According to the statement, which I did not expect either, since the bank actually has no risk, I wanted to get advice here on how to proceed. I can first write a polite letter. I would just like to know if, in the event of a renewed, this time written rejection, I have any legal basis to move the bank in the direction I want? And I wouldn’t really benefit from withholding any facts. After all, I want advice, don’t I? That is why I apologize for my imprecise description / formulation. That is exactly why I am here. Because I am not the professional.

I do not understand the bank! However, there is no right of termination for the borrower, so the contract must be fully fulfilled. I do, however, also think that there is a reason why the bank decides this way. We do not know the reason, though.

I don't either. The caseworker just said that we signed a contract years ago and that it must be fulfilled. That was already clear to me. But if the bank doesn't have any financial loss and no risk, since the life insurance pays out directly to the bank and the insurance is already sufficient to fully cover the remaining debt? I don't understand it. I will probably just put everything into a nice written form. Maybe they will justify in writing somehow why they don't want to do it.

The question for me is: Is the bank allowed to continue blocking both insurances, when one already covers more than 100%? Do I not somehow also have a right of disposal for my accumulated capital? At least the part that exceeds the outstanding claim? This is just harassment.