As per RBI instructions: Loan Insurance is not mandatory but it's recommended to have.
If it's group loan insurance then it will get cancelled.
Check the Terms and Conditions
My case I didn't opt any loan insurance for my home loan as I already have Term Insurance.
But when I try to transfer loan from HDFC to SBI. SBI forcing me to have loan insurance but I clearly told them give me GR where it's mandatory by RBI. Later they agree and transferred without any loan or life insurance
