Joseph Meehan is right about solving any outside water entry problems
first. If outside water isn't allowed to drain away from the footings
to lower ground, it will find its way into any crack and force its way
past any covering on the inner wall of the concrete.
You haven't said how you would apply insulation to the inside. A common
way is to mount studs and put insulation batts between, then the vapor
barrier and drywall. Structurally that's fine, but if you don't provide
a very tight seal around the edges of the wall, humidity will diffuse
into the air spaces of the insulation and, in humid summer days,
condense on the cold concrete surface. That could give you a musty
smelling cellar or mold. This is another reason for building new houses
with extruded polystyrene boards on the outside of the foundation
walls, from footing up to the sill (protected above grade, of course).
This puts the concrete mass on the warm side of the insulation, helps
keep out water from passing through the walls from the ground, and
prevents condensation on those humid summer days. Retrofits to do it
this way aren't easy, so applying the insulation inside must be done so
as to keep the air from contacting the cold concrete.