What is the insulation in this hot water jacket?
It's very likely fiberglass since that's what's been used in water heaters for many years.  You didn't specify how old it is and if it's "ancient" there does exist that possibility.  If in doubt, get it tested and properly disposed of by a licensed abatement contractor.

I suspect, however, that old is 10-15 years which is "forever" in water heater years and in that case there will be no asbestos.