I have never used an insulated jacket or wrapped the exposed hot water pipes in my basement. How long do you think it would be before I would recover the $ spent on insulating materials? I haven't priced them yet, but I'm estimating at least $50 in materials... maybe double that? The water heaters are 20 years old model 21V40-7 and have a manufacture date of 1991 on them. The house was built in 1993 and has 6 bedrooms. Only two of us living here full-time, though... plenty of hot water for us! I have no frame of reference for how efficient a water heater is, or how much it costs in gas to keep water hot. I'd say it usually takes about ten seconds or so after turning on the hot water valve on a faucet anywhere in the house to start feeling the temperature change to hot from cold.

Only two of you using the hot water from two heaters hooked together? Would they be hooked in series, one after another, or are they hooked together for volume? And why two?
Want to save money? Forget the insulation and shut one of the heaters down. That is unless each heater is supplying a section of your house. Is that the case here? I think it will be a very long time to recover your expense. Good luck, Tom

I agree with Tom, you have overkill with 2 units, shut off the first one or even bypass and disconnect. If your basement is part of a heated area skip the insulation, it will never pass for itself since heat from your heater is warming the air inside your home. However, if you live in a hot location the same is true in the summer, unit is heating the inside of your home.