What is the ruling on a benevolent loan if it is stipulated that 1.5% of its value be deducted in exchange for subscribing to a system that exempts the deceased from repaying loan balances?

Insurance on a loan is permissible if it is a Takaful (cooperative) insurance, regulated by Sharia principles. This means it should be based on the intention of donation and cooperation, not exchange, and the company should not profit from this money. Rather, it should be held or invested for the benefit of the subscribers to cover what is necessary upon the death of one of them. However, if it is commercial insurance, participation in it is not permissible.