As global fossil fuel resources continue to deplete and population growth drives increasing energy demand, the efficient use of energy has become a critical focus in sustainable development. In the building sector, thermal insulation plays a crucial role in carbon emissions and energy consumption reduction while minimizing reliance on natural resources. Moreover, thermal insulation can significantly impact life cycle costs (LCC) that account for all expenses incurred throughout the life of a building. Therefore, this study presents a comparative LCC analysis of two widely used thermal insulation materials: expanded polystyrene (EPS) and mineral wool (MW). For both materials, purchase prices, installation costs, maintenance requirements, and end-of-life costs, including removal, transport, and disposal are evaluated. Calculated costs were adjusted to net present value using discount rates recommended by the European Commission, allowing for an accurate comparison over the operational life of 35 years. Results indicate that the total life cycle cost for EPS is 107.30 €/m2, with approximately 70% attributed to installation costs. Similarly, the results for MW show that installation costs account for more than 70% of a total life cycle cost of 127.85 €/m2. Key distinctions in material properties, including thermal conductivity, durability, and ease of installation, are also discussed, providing insight into the trade-offs between these insulation options. This comparative analysis underscores the importance of incorporating LCC assessments into material selection processes for energy-efficient building design. By providing a comprehensive understanding of economic and environmental impacts, the study aids stakeholders in making informed decisions to optimize energy savings and sustainability outcomes.