"Finished" basement insulation

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laharned

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We have a 1959 house in MN with a 1960-1970s finished walk out basement complete with cheap faux wood paneling and asbestos floor. This has become our children's play area this fall, but we now need to consider insulating the walls. They have some framing to hold the paneling (obviously) but I do no know the best way to insulate the walls. We have no means of upgrading the paneling and it does not bother me right now with small kids playing down there so this will be put back down on what ever is put in place. Also, we have a drop tile ceiling and I am not sure if there is a good way to get insulation up to the wall that extends into the ceiling area.

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Questions
Do I have someone come and blow in insulation (not a DIY) or do we put up some kind of roll insulation?
If we do a DYI, what prep would we need and what else would we have to do in addition to putting insulation between the framing?


Most of the exterior facing walls have a radiator running under the bottom edge of the paneling so I am not sure if there is a closure inside the wall at the base of the paneling before the radiators (I believe not).

We have an occasional leak in one corner when the extension to the gutter spout is not put back on (after mowing) or falls off and we have a heavy rain so this is another concern if we putt something in the wall.
 
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