[josephlord]

Then it would also be pretty cheap for the lender to insure against borrower's death or to bear the low (amortised) cost.

There is no reason a guarantor couldn't be responsible only for wilful failure to pay but not for after death.

I'm not saying these things apply in the agreement under discussion or under the relevant laws but just that different structures are possible.

[ars]

> Then it would also be pretty cheap for the lender to insure against borrower's death

It would. It would be so cheap for them that they might as well just cut out the middleman and self insure.

AKA just forgive the debt and that's all. Which apparently everyone else does, except NJ.