Yes, health insurance is absolutely essential for your stay in Germany with the Opportunity Card (Chancenkarte). Without valid proof of insurance, you will not receive a residence permit.
As you are not yet entitled to join public health insurance without an employment contract, you need incoming insurance. This incoming insurance must meet the legal requirements, which means it must offer benefits comparable to those of public health insurance. It must also be valid throughout the Schengen area and for the duration of your stay (usually 12 months from the issue of the Opportunity Card).
By the way: Our WORK & PROFESSION Insurance is perfect for starting out in Germany with the Opportunity Card.