Fake, scam, bad. No legitimate insurance company will order you to use a specific pre-paid card. You shouldn't be using credit card insurance, anyway, because many of those companies have such strict terms that they will NOT pay the bills if you can't. On the other hand, you could get disability/death mortgage insurance through your mortgage lender and credit card insurance through the credit card company - you at least known they are legitimate companies.
In short, NO, don't use a vanilla visa and give them that information in the vain hope they'll only use it to pay your bills. They'll probably drain the account and never provide additional coverage.
If you're concerned you can't pay the bills, take the couple hundred they demand to be on the card and put it in a savings account instead to cover any bills when you're short on cash.