This retrospective cross-sectional study assessed older adults (age 40–80 years) who were registered in the Korean National Health Insurance Service database from 2002 to 2019 for investigating the association between vestibular loss and the risk of dementia, the population was divided into three groups (general, vestibular loss, and hearing loss). Hazard ratio of dementia in vestibular loss and hearing loss groups was calculated using the national population data. A total of 2,347,610 individuals were identified (general: 2,145,609, vestibular loss: 60,525, hearing loss: 141,476). Mean ages were 53.29 years, 58.26 years, and 58.52 years, respectively. Dementia occurred in 127,081 (IR = 4.91 per 1,000 person-years), 7,705 (IR = 10.79 per 1,000 person-years), and 16,116 (IR = 9.63 per 1,000 person-years) patients, respectively. The vestibular loss and hearing loss groups had hazard ratios for dementia of 1.078 (95% CI, 1.053–1.103) and 1.064 (95% CI, 1.047–1.082), respectively, when compared with the general group. The current study suggests that vestibular loss increases the risk of dementia. Similar to hearing loss, vestibular loss should be considered a risk factor for dementia, and treatment such as adequate vestibular rehabilitation may reduce this risk.