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Cold wallets are not continuously connected to the internet, which means they are safe from internet-related hacks. One would only connect their cold wallet to the internet in order to transfer crypto into it or transfer crypto out of it.
In most cases, this type of wallet is used by those who have purchased large amounts of crypto and need to securely store it. Anyone owning a significant amount of any type of cryptocurrency would be doing themselves a disservice in not owning a cold wallet and putting it to use.
There are two types of cold wallet, one is a hardware wallet and the other is a paper wallet. They both technically work in the same way but, have obvious differences.