The insert point is after the filters (which are mixed down to mono) and before the effects (which is where the signal becomes stereo). So you do not lose the stereo effects.
Apart from that the inserted effect might add add some noise or hum, there's no inherent signal degradation by using the insert. However, beware that the insert signal level is +4dBu, i.e. a very hot signal. This may overdrive the inputs of some pedals and other effects so that they distort. If this happens you can turn down both filter outputs until the signal is cleaned up.