I recall reading an article on HN the other day which revealed there's even an insurance policy against ransom kidnappings, and that there are companies specializing in dealing with them - particularly, in business settings, they'd pay off the kidnappers and then bill your company for "consulting" (this is so that your company doesn't look like it's supporting organized crime by paying ransom).

And this also exists with insurance and consultants for dealing with ransomware

The difference is that ransomware gangs often come through with the decryption keys, while these two examples make it seem like it is common for kidnapping gangs to just keep the ransom and bury the hostage in a shallow grave. Ignoring the enormous moral issues, I wonder what the business incentives are here.

I'm not sure how you spin it that the bank or insurance company is the bad guy here. How would you rather it be handled?

What alternative would you prefer? Not giving any loan at all for people in such circuimstances? Or give out money for free to anyone who pretends to be in this situation?