What will be the effect on the capacitance between the two live parts and ground if the insulation value increases or decreases?

 

Capacitance is proportional to the overlapping area of the conductors involved and the distance between them. Decreasing the insulation or gap between them increases the capacitance.

 

OK, I agree. But should I check resistance of a capacitor or capacitance? Because when we talk about the insulation resistance we check it with meggar. We never talk about insulation capacitance.

 

You would check capacitance with a capacitance meter, or DMM that has that setting. You have to check capacitance on two wires running parallel that are not shorted together at any point.