Basically the bank will want a copy of the letter showing cover was turned down (to make sure the customer isn't just pulling a fast one) and will then ask the applicant to sign a waiver warning of the danger of going ahead without life cover. They're not obliged to do this, and the loan amount might come into play. but it might be an option. Best of luck.
PS the lender will know if you don't have life cover. They will want a copy of the policy document for a start. Even if you forged one, they will find out when they write to the insurer to get the policy assigned to them. Not suggesting you would do this of course!