To insert an image into a letter template, you may use html code.
In the letter template, on the far right of the formatting bar press the button that looks like <> .
This allows you to access the html source code. Insert the html for the image source in the source code, and click Save when done.
You may use the code <img style="width: px; height: px;" src="" alt=""> where
the size of the pixels of the width and height of the image is inserted before px,
the url location of the hosted image is inserted between the quotes of src,
and the descriptor or title is inserted between the quotes of alt.