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We evaluated the effect of the National Health Insurance (NHI) policy including dental sealant on changes in the prevalence of sealant and caries, and examined how NHI affected sealant utilization and untreated caries in children from diverse income groups in South Korea. We used a multivariate logistic regression analysis to explore the effects of three stages of dental sealant policy (pre-policy: 2007–2009, first post-policy: 2010–2012, and second post-policy: 2013–2015) on the prevalence of dental sealant and untreated caries. Participant data (N = 8161, aged 6–14 years) were derived from the Korea National Health and Nutrition Examination Survey (2007–2015). We also conducted subgroup analysis to determine the effects of the NHI policy on dental sealant and untreated caries by income level. Implementation of dental insurance coverage was associated with higher likelihood of using dental sealant (odds ratio (OR) = 1.39 (95% confidence interval (CI): 1.18–1.63) for the first period and OR = 1.58 (95% CI: 1.33–1.87) for the second period) and lower odds of having untreated caries (OR = 0.79 (95% CI: 0.64–0.98) for the first period and OR = 0.65 (95% CI: 0.51–0.83) for the second period) after controlling for covariates. Results revealed that there was a greater prevalence of dental sealant and a lower prevalence of untreated caries in both middle- and low-income households compared to high-income households. The higher prevalence of dental sealant and lower untreated caries after the policy implementation. Moreover, we demonstrated children from low-or middle-income households were more associated with increasing dental sealant use and a declining prevalence of caries.