Xylitol is safe for diabetics. It is an alternative to sugar so is not actually sugar. Xylitol does not require insulin for it to be metabolized therefore making it a great alternative to sugar for diabetics.
The reason Xylitol is safe for diabetics is it has a smaller effect on blood sugar levels and is absorbed more slowly. Xylitol has a Low GI level of 7 while sugar has a GI level of almost 100. It is suggested that replacing sugar with Xylitol can also help prevent type two diabetes.