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Accurate assessment of cable insulation conditions can be achieved by implementing advanced diagnostic and simulation techniques that assist the measurement and monitoring of the properties related to aging and failure of the insulation system. It is well recognized that the electric field distribution is the dominant factor in the initiation of degradation process in the insulation system. In such a system, and due to the presence of pollutants such as water or moisture, local field enhancement occurs resulting in field stress values enough to cause local breakdown of the insulation. The finite element simulation technique is used to evaluate the electric field inside the power cable. A model that illustrates the water-dielectric interface within the cable insulation system is proposed. The difficulties associated with the building of such a model, which contains elliptically shaped water particles and unusually configured insulation areas, are illustrated. Finally, the link between the local field concentration in the vicinity of water particles and the possibility of insulation failure, which can be developed to a complete breakdown, is discussed.