Envelope insulation is a well-known strategy to improve buildings’ energy efficiency. This paper considers two archetypes of an apartment block typology largely diffused in the Italian building stock and evaluates the energy savings resulting from the application of three insulation materials: polyurethane foam, rock wool, and resin bonded fibre-board. The energy requirements for winter heating and summer cooling are assessed with EnergyPlus and then compared to the embodied energy of the insulation materials. Hence, the energy and carbon paybacks are calculated, and a cost analysis is proposed to provide an insight into the market impact for the retrofit materials’ choice. The apartment block model is analyzed in three main cities (Rome, Milan, and Palermo) allowing to assess the impact of the climatic condition in terms of minimization of primary energy consumption and environmental emissions. Simulations showed that thermal insulation has a higher impact on winter heating and slightly affects the summer cooling requirement. In Milan, the refurbishment gains relevance as the energy and carbon payback periods are shorter than those of the city of Palermo characterized by warmer weather. Considering the embodied energy impact, this method allows us to estimate the maximum potential for energy savings in existing buildings and provides an estimation of achievable results in a short-medium period.