No insulation in mine. I did add carpet foam between the boot and the rubber seal in an attempt to lessen the noise from that area. It helped some.
However the big improvement icame when I made a huge cover out of black material and two layers of carpet foam. I fashoned a large shifter boot and placed it over the stock shifter boot. Now you can see about 4" of the transfer case shifter.
This really helped with my sound mitigation project.
RJR