Insulin is a hormone (a chemical that circulates in the blood and affects many cells in many parts of the body). It is made by special cells in our pancreas called beta cells, which are located in clumps of cells called islets. After manufacture and release by the beta cell, insulin circulates in the blood, going to all cells and acting where it is needed.
Insulin acts with a mechanism that has been compared to a lock and key. On each cell is a "door" that can allow glucose to enter. However, this door stays locked until insulin comes around. Insulin is the key that opens the door. When insulin is present, and the "door is unlocked", glucose can enter the cell and be used as fuel. As glucose leaves the blood to enter the cell, the amount remaining in the blood goes down. Therefore, the main effect that we see from insulin is to lower the blood glucose.
Insulin is necessary for life. Cells cannot function without glucose, and many cells cannot get glucose without insulin. Furthermore, insulin controls other aspects of metabolism, and without it, acids build up in the blood, causing death.