The bank is confused.

I would like to understand what the purpose of the insurance from the bank is. I submitted retrenchment claims for my personal loan and credit card so the insurance has paid out lump sums of money on both but now the monthly payment is still due every month? The bank is supposed to cover the premiums for a set amount of time so that the monthly payments are met. With the lump sum that was paid, the bank has viewed as a single payment and is still requesting monthly installments. This makes no sense! I am still unable to make the payments as before so the 1 large payment from the bank's insurance seems to be ineffective. The bank is now handling me over due to non payment after the 1 month since the lump sum was paid. Please can someone clear this up for me.