Foam insulation sleeves are recommended. The foam simply slips onto the pipe through a slit in the sleeve. While you could also use foil faced fiberglass installed in strips and tied to the pipe with wire or tape every six to eight inches, this is cumbersome. The foam sleeves are generally more effective and much easier to install. Before purchasing the foam sleeves at your local hardware store, measure the diameter of your pipe.
Sleeves come in varying sizes to accommodate the different diameters of pipes.
For maximum energy savings, you will want to ensure a snug fit. Before you insulate water pipes, check for and repair any leaks. Wet insulation is rendered useless. Generally speaking, the first fifteen feet of pipe should be insulated, if accessible, because this is where the most energy is lost. It is also a good idea to insulate the first four to six feet of cold pipe where it enters the tank.