Getting Life Insurance When You Have Dementia or Alzheimer’s

Difference between Dementia and Alzheimer’s

Getting Life Insurance When You Have Dementia or Alzheimer’s

Published: March 14, 2018

Finding the right life insurance for dementia patients can help protect your finances and might prove helpful in paying for regular supervision, especially when diagnosed with Alzheimer's, the most common form of Dementia.

If you or a loved one has been diagnosed with Dementia, finding life insurance can be a frustrating task.

Life insurance companies in Australia understand your concerns and recognise Dementia as a serious illness, which is why select insurers offer life insurance policies. However, each instance of Dementia will be reviewed on a case-by-case basis.

Can you get life insurance if you have Dementia?

Yes, generally, most individuals with Dementia will be able to qualify for life insurance. However, the insurer will generally require a medical exam and details concerning your initial diagnosis, recent dementia-related episodes, medications and visits to the GP/neurologist.  Every life insurance company follows different underwriting guidelines. So, even if you’ve been turned down in the past, you might still find coverage from another insurer.

Your best chance is to apply to a retail life insurance company accustomed to impaired risk cases. They will offer you the services of a specialist to help you find the best option suited to your circumstances.

Take note. You will have to serve a waiting period because Dementia is classified as a pre-existing medical condition. Waiting periods will vary from insurer to insurer. It's best to read the company's product disclosure statement (PDS), for precise guidance.

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How much will life insurance coverage for Dementia cost?

The premium you’ll pay for Dementia life insurance will depend on a variety of factors, including the type and amount of coverage you want, the life insurance company you're applying to and of course the kind of Dementia you've been diagnosed with.

If the underwriter determines you to be in excellent health, you might be able to obtain a fully underwritten life insurance policy. However, you will likely pay a higher premium than someone without Dementia, all other things being in equal.

The life insurance company will usually want to know about your:

  • Age and gender
  • Height and weight
  • Smoking status
  • Medical history
  • Family history

And you can expect some more in-depth questions, including:

  • The date you were initially diagnosed.
  • The presence of any other illnesses.
  • How the disease is impacting your ability to go about daily life.
  • The symptoms you've experienced in the last 6 to 12 months.
  • List of medications you're taking now and in the past.
  • Do you regularly meet with your health professional/neurologist?
insurance for dementia

If you do not have Dementia but have a family history of the disease, you might want to think about getting insurance against Dementia.

Trauma insurance for Dementia and Alzheimer’s

Trauma insurance, also referred to as critical illness cover, usually pays a lump sum benefit when you are diagnosed with one of the illnesses listed in the insurer’s PDS, and Dementia and Alzheimer’s are typically listed. Alzheimer's disease or Dementia results in significant cognitive impairment. A life insurance company will typically explain significant cognitive impairment as deterioration in the life insured's mental state.

The condition is significantly debilitating, leaving severe sufferers unable to care for themselves.

According to Dementia Australia (2018), there are over 400,000 Australians living with Dementia, of which 45% are male and 55% female. Without a medical breakthrough, the number is expected to rise by another 100,000 by 2025.

Difference between Dementia and Alzheimer’s

Which life insurance companies provide trauma insurance for Dementia?

Most life insurance companies in Australia provide trauma cover for Alzheimer's disease in their trauma insurance policies. Dementia or Alzheimer’s must be diagnosed by an appropriate medical specialist and will usually be categorised as a deterioration of your Mini-Mental State Examination score to 24 or less, depending on the life insurance company you apply to.

Please note: It’s important that you fully disclose if symptoms of Dementia existed that would cause a reasonable person to seek diagnosis, care or treatment from a medical professional when applying for a policy.

Generally, a 90-day qualification period exists. During this period, you would not be able to claim benefits when diagnosed with Dementia. However, some insurers might reduce this period. Carefully read through their PDS before deciding.

Trauma insurance for Alzheimer’s patients in Australia

Source: lifeinsurancedirect.com.au (March 2018)
Life Insurer Policy Expiry Age Mini-Mental State Examination score
Insurance with On Track – CI Plus 75 24 or less
Priority Protection Vitality – Crisis Recovery 99 Scores to
20 or less
Accelerated Protection – Critical Illness Standard 69 (99 when linked with Life Insurance) -
Protection Plans – Living Insurance 75 24 or less
Life Solutions – Trauma 80 24 or less
OneCare – Trauma Comprehensive 100 24 or less
Complete - Trauma 74 -

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What is Dementia?

The brain is a complex signalling system much like a computer. Information comes in, gets processed and turned into memories. All of this is done by billions of nerve cells, each branching out and connecting with other nerve cells.

Dementia is a general term used to describe a group of conditions categorised by a decline in a person’s mental ability, severe enough to interfere with daily life. Symptoms include memory loss, impairment in communication, and limited social skills and thinking abilities. There are many different types of Dementia, with Alzheimer’s being the most common.

What is the difference between Dementia and Alzheimer’s?

Dementia describes a collection of neurological disorders that affect the functioning of your brain. Alzheimer's disease is the most common type of dementia. About two-thirds of the total number of Dementia cases are considered Alzheimer’s. Memory loss, disorientation, lapses of judgement and anxiety are all underlying symptoms of Alzheimer’s and most other types of dementia.

Alzheimer's disease occurs where there is a permanent, irreversible failure of brain function leading to significant cognitive impairment for which no other recognisable cause has been identified. This may result in a need for continual supervision to protect the sufferer. Eventually, it may be necessary for those with Alzheimer's disease to have full-time care.

The different types of Dementia

  • Alzheimer’s disease: Patients suffer from memory loss, disorientation, lapses of judgement, anxiety and depression. There are two types of Alzheimer’s - Sporadic and Familial.
  • Vascular dementia: Caused by problematic blood circulation to the brain. Depending on the specific type, it can either be brought on by having multiple strokes or by high-blood pressure and the thickening of arteries.
  • Dementia with Lewy Bodies: Lewy bodies develop in the brain's nerve cells, causing them to deteriorate and die. Symptoms include visual hallucinations, tremors and stiffness.
  • Frontotemporal dementia (FTD): Caused by progressive damage to the frontal and/or temporal brain lobes. Patients demonstrate reduced intellectual abilities with changes in personality, emotions and behaviour. They find it difficult to recognise objects and struggle to understand language.
  • Alcohol-related dementia: Key parts of the brain suffer damage through vitamin deficiencies caused by heavy drinking.
Signs of Dementia

What are the signs of Dementia?

Early signs of Dementia vary a great deal. The most common tell-tale symptom seems to be memory loss, especially the loss of short-term memory. Catching possible dementia in the early stages is of utmost importance. Symptoms include:

  • Changes in personality: People can become overly fearful or suspicious, apathetic or uncommunicative. Alternatively, they might become over-familiar, more outgoing and dis-inhibited, depending on their usual behaviour.
  • Changes in mood: Rapid mood swings from calm to anger for no apparent reason.
  • Loss of initiative: Many become incredibly passive, requiring constant prompting to do something.
  • Misplacing things: Repeatedly forgetting where they put things.
  • Recent memory: A person with dementia begins to forget things more often and cannot recall them later. Poor or decreased judgement is usually soon to follow.
  • Difficulty completing day-to-day tasks: A person with dementia might pour a glass of milk, forget they poured it and not know who it was for.
  • Disorientation of time and place: People with dementia can become lost in their own home or street, not recognising where they are or how to find their way.
  • Language problems: May forget simple words and substitute them with incorrect ones.
  • Problems with abstract thinking: Forgetting what numbers mean and how you are meant to use them.

Fortunately, a diagnosis of Dementia does not mean that your life is over. People with dementia are still able to live happy lives, although they are likely to need constant care.

Is Dementia classified as a disability?

Dementia is not seen as a normal part of ageing and thus should be classified as a disability, meaning people with Dementia must be afforded the same disability support as any other person with acquired disabilities. Some people living with Dementia do receive support from the National Disability Insurance Scheme (NDIS). However, many people with younger onset dementia face barriers to entry.

Although Dementia is more common in people over the age of 65, Dementia Australia, previously known as Alzheimer’s Australia, revealed that Dementia had been diagnosed in approximately 25,938 Australians between the ages of 30 and 50 years old.

Dementia Australia remains an advocate for the NDIS to assist younger people with progressive neurodegenerative diseases.

Cost of long-term care for people with Dementia

Dementia in Australia is on the increase. According to the latest report from the Economic Cost of Dementia in Australia (January 2018), it costs about $88,000 per annum to care for a person who has dementia.

93% of these costs are generally used for residential care. Essentially, residential costs are higher for people with dementia than for those without. 52% is generally attributed to pharmaceuticals, 17% for hospitalisation and 24% to pay for attendances.

As Dementia is incurable, this ongoing expense may eventually add up to a crippling amount, placing considerable strain on the funding of the Federal Government. Australia is being forced to look at more sustainable ways of dealing with dementia. Keeping dementia patients at home for as long as possible is one of these options. Which is why you might want to invest in a life insurance policy to help support your loved ones taking care of you or paying outstanding bills when you pass away.

life insurance companies provide trauma insurance for Dementia

Where to get quotes for Dementia insurance coverage

When shopping for life insurance or Trauma cover, it is important that you work with a specialist or at least start comparing policies from Australia's top 10 life insurance companies.

We know finding cover is challenging, especially if you’ve been turned down before. But, when working with a specialist, you have a higher chance of finding the cover that suits your requirements.

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2 Comments

  • john Byrne |

    Is Dementia NOT covered by an Income Protection Insurance Policy?

    • SPECIALIST
      Anneke Van Aswegen |

      Hi John,
      As you probably know, income protection insurance generally pays up to 75% of your monthly income should you be unable to work for an extended period of time due to illness of injury.

      Depending on your choice of insurer, if you lose your ability to work due to dementia, you might be able to claim 75% of your wages.

      However, if you have a family history of dementia or already have the disease when applying for cover, you may not be able to get income protection insurance or be offered an exclusion or loading.
      It is best to discuss your options with a specialist. When you’re ready, please give us a call on 1300 743 253 and a consultant will provide you with all the information you need.