The lender that you want to finance the car's purchase can legitimately require that you place a disability insurance policy as a condition for the loan where it would be the beneficiary if you become disabled and cannot make the car's monthly payments.The lender has a legitimate interest in making sure that its payments you owe to it over time for the car will be paid on time. The requested disability insurance policy is a reasonable request of you and such policies placed in car loan situations as yours are customary.You can try and negotiate around the requirement of the disability insurance policy. However, the dealership can remain firm in its demand. If so, it is up to you to make the final decision o the required policy.