Can silicone sealant be used to insulate and waterproof LED Strips ?

Yes. silicone sealant or "Silicone Rubber" or silicon glue is a much more preferred filler than epoxies and can be used to seal LED strip connections and wiring. It is safe and non-conducting, meaning that it will not cause a short circuit between led strip connection points (+ / - or RGBW).

Although grades of silicone sealant varies, and as such costs as well, the most important thing to factor when selecting an appropriate sealer for your LED Strips is A: how well the sealant adheres to surfaces and B: whether or not it accelerates the corrosive process.

At Hi-Line Lighting, we recommend that "Neutral Cure" silicone rubber should always be chosen over the commonly used "Acetoxy" (or "Acid Cure") variety, for the reason being that the latter will cause problems later down the line, due to the way in which it releases acetic acids over time. Although Acetoxy silicone sealant provides a quicker installation solution, you may find that it becomes problematic later down the line when trying to stick to plastics, glass and aluminium. 

Neutral silicone sealants, however, are better known for their improved adhesion to most surfaces. These come scent-free (while Acetoxy has a strong vinegar smell) and use alcohol for the curing procedure. The main caveat when using Neutral silicone sealant is down to how much longer it takes to cure, which can be over a period of several days, but the end result is worth the additional time spent.