The neutral wire used with the Main Panel overhead service feed from the electrical utility company is most always un insulated as you and your father observed. If the Main Service feed was underground then the neutral wire would be required to be insulated.

Why is neutral wire insulated?

It is used as a safety measure to ensure that any leakage of current to a metallic body does not give any severe shock to a user.

Can neutral wire be exposed?

The neutral is NOT safe to touch. When everything is working correctly, it should be at most a few volts from ground. However, and this is the big gotcha, if there is a break in the neutral line between where you are and where it is connected back to ground, it can be driven to the full line voltage.