Insurance payment has been declined

I took a loan at Capitec Bank in Witbank, Mpumalanga in 2014. I was then retrenched in March 2015. I then went to submit the required documents at the Capitec branch in Witbank. I then made an arrangement to pay R200 for the next coming three months until the insurance has paid. For all these three months the bank was debiting the full amount of R1990.00. I always had to go back to the bank to reverse the money. Finally, I went back after three months and was told the insurance payout was declined due to the fact the code on my UI19 form proved that my contract had ended. Now I am being told that the insurance will not cover me and that I have to continue paying the bank for the loan. In my knowledge I was retrenched at work and was given a letter to show that, which I also submitted to the bank. I feel this insurance just wants to play word games and in turn not pay out. I have resorted to taking this matter further. Please help.