Paying for the insurance is seperate from the loan, as the insurance itself covers the loan (if that makes sense)...ie: they are not going to lend you money to cover a loan which they are issuing.
the logical order of things is (assuming you need the loan):
1) Medical (cos if you dont get it, you'll never be flying anyway!)
2) Loan
3) Insurance (cos it covers the loan, and is only worth getting if you can afford to go! It also means you have the correct cover to apply for....
4) Visa (cos you need to have paid your foundation course fee via your loan and you also need the right insurance).
I got my insurance the other week and it was £1112.
thats the long and short of it anyway...