I thought that it would be essential business practice for the lender. It seems unnecessary to me that the State should have a law insisting on it. Maybe the policy is a legacy of the mess that many people ended up in, in often tragic circumstances, a decade or two ago, before this rule was introduced.
Remember also that you don't have to have dependents to leave a financial mess after you. If you die without dependents but with negative equity in your home, or a mortgaged property that turns out to be slow or difficult to sell, somebody has to pick up the tab.