Any amount of insulation helps.
There are 3 main areas of heat loss. Head, sides of chest, and groin area.
Any form of fabric will work. Yes, even cotton. (Cotton's problem is when it's in the air.)
As an exercise try this:
While wearing a life jacket in the water, remove your belt, then put it under your knees and around your neck so that your your knees are held close to your chest. Do this in a way that allows you to duck out of it without having to fumble with the buckle. Clamp your arms to your sides. This doesn't work well if you have short belt (small waist) compared to your height.
Float like this for several minutes.
Undo the belt and move. You will notice a rush of cold, as you dissipate the warm water near your body.
Note: I did this experiment using a horse collar type life jacket, not the more modern vest type. Initial experiments should start with just hugging your knees to your chest to see that you float stably in that position.
If you find your self on a Titanic replay, look for a garbage bag. Dress as warmly as you can, then bite holes in the two bottom corners and the middle of the bottom, and pull it over your head over the top of your life jacket.
The holes will stretch open, but will be snug. Use your belt to fasten the bottom edge of the bag close to you, or tuck into your pants. If you can, tie the corners between your legs. Ideally drop your pants, tie between your legs, and pull your pants up.
This slows the water exchange between your clothes and the sea. The water warms up some, and your survival time lengthens.
A woollen hat with a bread bag over it also helps.
A garbage bag is a good piece of survival gear if you are in the mountains for the same reason. Test: On a winter day go outside with a bucket of water, dressed in a t-shirt. Get someone to pour the bucket over you. In a very short time you will be quite cold.
Put on your garbage bag. Instantly you feel warmer:
- You've blocked the evaporation that was taking place from your wet clothing.
- You've blocked the chimney effect of warm air next to your body rising away.
- You've blocked the breeze.
Now this is not a panacea: A dry parka is certainly a better bet. But you can put a spare garbage bag in the bottom of every daypack you own.