Has anyone ever made an up front payment for insurance on a loan?

My mother has bad credit and is looking for a personal loan. She has spoken with three companies that have offered to help her. They each advised her that she would have to pay to insure the loan. She is attempting to borrow $15,000 and the three companies are asking for around $1,300 dollars to insure the loan. I have heard of companies requesting insurance on a loan, however I have never heard of making such a payment up front. The three companies that she is speaking with are:
American Investments
First National Credit Corporation
Mitchell Brokers, EZ Loan Institution
Has anyone ever heard of these companies? Are they legit? Has anyone ever paid insurance for a loan up front, and if so are the amounts they are asking for reasonable?

Sometimes home lenders require that you pay mortgage insurance as part of your payment. I would certainly want to know the interest rate and also if the loan needs to be secured. If your mother's credit is horrible because of some reason I would consider it if she is desparate

I have never heard of that sort of policy. I recently borrowed 5000 from American General Bank and they asked for no such thing, And i have bad credit.

The only time I ever had to pay up front was when I got my home loan and that was FHA insurance, I would tell your mom to keep looking....