Does a Mercenary run's Life Insurance pay back money that is in town before a run?
I just tested this myself given no reliable sources online. I beat the game as a mercenary, then, with my 300 Ore and 70,000 gold, bought life insurance and purposefully died to the first creature at the start of my NG+ run.
I can now say, beyond a shadow of a doubt, that you will get none of it.
The gold and ore provided by life insurance comes exclusively from that which you make in that New Game+ iteration ONLY.