Question

An Electromagnet is made up of insulated wire. Explain the reason for this

Answer 1

Because otherwise the turns would short out.

The whole point of an electromagnet is to create a magnetic field by passing a current through a conductor. You could have just one turn of wire passing a large current, or you could have multiple turns each passing a smaller current. If you have multiple turns, you could connect them all in series and pass the same current through all of them. Which is what is normally done, otherwise you would get resistive losses and large magnetic fields between your power source and the electromagnet. Since each turn of the windings has some resistance, points on adjacent turns will be at a different voltage and need to be insulated from each other.

Magnets are not always wound with wire - most of our big ones are wound with copper pipe with cooling water flowing through (unless they are superconducting). But the turns still have to be insulated, so the pipe is wrapped in insulating tape.