The potential of nanocomposites have been drawing the intention of the researchers from energy storage to electrical insulation applications. Nanocomposites are known to improve dielectric properties, such as the increase in dielectric breakdown strength, suppressing the partial discharge (PD) as well as space charge, and prolonging the treeing, etc. In this review, different theories have been established to explain the reactions at the interaction zone of polymer matrix and nanofiller; the characterization methods of nanocomposites are also presented. Furthermore, the remarkable findings in the fields of epoxy, cross-linked polyethylene (XLPE), polypropylene and polyvinyl chloride (PVC) nanocomposites are reviewed. In this study, it was observed that there is lack of comparison between results of lab scale specimens and actual field aged cables. Also, non-standardization of the preparation methods and processing parameters lead to changes in the polymer structure and its surface degradation. However, on the positive side, recent attempt of 250 kV XLPE nanocomposite HVDC cables in service may deliver a promising performance in the coming years. Moreover, materials such as self-healing polymer nanocomposites may emerge as substitutes to traditional insulations.