Diabetes in the elderly is associated with numerous complications, among which hypoglycemia is particularly dangerous. In this population, episodes of glucose drops often present atypically, bypassing the autonomic phase and presenting with hypoglycemia unawareness. The aim of this paper is to present the current state of knowledge regarding the impact of hypoglycemia on cognitive function in geriatric patients treated with insulin. This study is a narrative review of the literature spanning the years 1997–2025. The PRISMA framework and rigid inclusion/exclusion criteria were not applied during the selection process. Literature searches, focusing primarily on type 2 diabetes with auxiliary consideration of type 1 diabetes data, were conducted using the PubMed and Google Scholar databases. The analysis included current publications, including observational and retrospective studies, concerning the pathophysiology, prevalence, diagnosis, monitoring, as well as preventive and therapeutic strategies of the investigated phenomenon. Research confirms a strong link between frequent hypoglycemia and cognitive decline in seniors. Recurrent episodes trigger neuroinflammation and microvascular damage, leading to atrophy in brain structures responsible for memory. Furthermore, impaired counterregulatory responses in the elderly delay danger recognition, accelerating dementia and memory loss. Diabetes therapy in the geriatric population requires strict individualization. A key element in the prevention of hypoglycemia is the implementation of continuous glucose monitoring systems. Furthermore, educating caregivers on the rapid recognition and elimination of hypoglycemic episodes is essential to protect the patients’ cognitive functions.