I faced the same issue using xubuntu 16.04 (clean installation) after I 
installed NVIDIA binary driver - version 340.96 from nvidia-340 
(proprietary-tested) instead of X.Org X server - Nouveau (under which no issue 
appeared). NVidia driver is more stable so I have to hold it. I edited 
/etc/default/grub to have a fully text boot instead of plymouth boot but I 
still want to be advised if there is any solution for this issue.
Under Xubuntu 14.04 no issue appeared.

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https://bugs.launchpad.net/bugs/1359689

Title:
  cryptsetup password prompt not shown

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