In the era of Industry 4.0, digital transformation has spurred the swift advancement of technologies, including intelligent predictive maintenance scheduling, prognostics and health management. The accurate prediction of remaining useful life plays a crucial role in these technologies as it extends power equipment's safe operational duration and decreases the maintenance costs associated with unforeseen shutdowns. Also, the increased accessibility of data for monitoring system conditions has paved the way for the more immense adoption of machine learning models in prognostics and health management for power transformers. At the moment, with the ever-increasing demand for electricity, there is a corresponding increase in the degradation processes of power transformers. Transformers insulation system and more importantly, the paper insulation happens to be the principal part where the degradation is prominent. Therefore, an accurate prediction of the insulating paper condition through its degree of polymerization is required to guarantee the reliability of power transformers. In this regard, the predictions, reliability, and health monitoring of this power equipment can be actualized by modeling the degradation of transformer insulation paper through several machine learning frameworks. In this view, this review paper has been drafted not only to serve as a guide for researchers interested in the fields of transformer insulation system fault prognosis but also to offer insights into potential research directions as existing literature in modeling and evaluating transformer paper insulation is presented.INDEX TERMS Insulating paper, ageing, degree of polymerization, prognostics and health management, machine learning model.