Short answer: NO.
Although it is a common argument presented by bank managers to expats in the Malaga Sunny Coast when they try to open a bank account, it is not mandatory, it is an abuse and a banking malpractice.
Imagine how wide spread the situation is, having clients contract insurance to be given any other product, that the recent ICO regulations for the loans to companies backed by the Government specifically forbid the banks to include additional products or make the approval dependant to the contracting of insurance.
Should you be forced to contract any life insurance and do not want to argue, you can always outsmart the bank by agreeing to sign the policy and in the following 30 days communicate the bank, under Art. 83.a.1 of Law 50/1980 of Insurance Contract your intention to desist and cancel the policy and be refunded the premium paid, deducting the proportional part of the days the insurance has been valid. They can only pay back your money.