Yes, INSULATION is a Scrabble word!

Letter values in Scrabble US: I 1, N 1, S 1, U 1, L 1, A 1, T 1, I 1, O 1, N 1.

Is it a valid word?

INSULATION is a valid word in the official Scrabble dictionary (US), the UK Scrabble Dictionary and Words with Friends (ENABLE).

the state of being isolated or detached
a material that reduces or prevents the transmission of heat or sound or electricity
the act of protecting something by surrounding it with material that reduces or prevents the transmission of sound or heat or electricity

Also: insulating material.