Life insurance for people with dementia or Alzheimer’s
How to get life insurance if you are diagnosed with dementia or Alzheimer's in Australia.
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If you or a loved one has been diagnosed with a form of dementia like Alzheimer's, it's likely you have faced a lot of difficulties in your everyday life. One of those difficulties you might have wondered about, is whether you or your loved one can obtain life insurance. Fortunately, having dementia should not hold you back from getting a life insurance policy.
To make the process simple and stress-free, we’ve broken down your options as clearly as possible.
Can dementia or Alzheimer’s patients get life insurance?
Yes, but because dementia is considered a pre-existing medical condition, it may be difficult to get a traditional direct life insurance policy where you simply do the research yourself and speak to the insurer directly. These are the options you can take when getting life insurance if you have dementia or Alzheimer's disease.
- Direct life insurance. These types of policies are available to customers without needing to go through a broker. Some still require medical underwriting, while other's may not. While these types of polices can have simpler application processes, they may be more likely to add a premium loading or exclusion for existing conditions, or refuse cover altogether.
- Retail life insurance. This is when you get advice from a broker and they find a suitable life insurance policy for you. It’s most likely that they will go to an insurer that specialises in high-risk individuals. You might end up paying a bit more for a policy due to the risks linked to your condition, but the process is far less stressful than looking yourself. Brokers can also advocate for you to get better premiums or conditions attached to your existing condition. These types of policies are usually very comprehensive and come with a lot of benefits that direct or super policies might not have as well.
- Life insurance through super. When you open a super account, sometimes you might automatically have a life insurance policy included. If you’re not sure if you have a policy, reach out to your super fund directly and they’ll let you know. While the payout isn’t usually as much as a life insurance policy outside of super – it’s usually in the region of $100,000 to $200,000 – it can be a viable option if you’re struggling to find cover but might have exclusions related to pre-existing conditions.
How to get life insurance if you have been diagnosed with dementia or Alzheimer's
Just because you’ve been diagnosed with dementia doesn’t mean you can’t get life insurance. Depending on your individual circumstances, you may want to shop around and see if any providers will cover you.
However, a far less frustrating and time-consuming option is to speak to a broker. They’ll assess your needs and do the searching for you, plus their chances of finding a policy for you are much higher than if you were to look for yourself.
Keep in mind that once you’ve been accepted for cover, you will have to serve a waiting period. This is the time you need to wait before you’re covered for issues related to your dementia and will be outlined in the product disclosure statement (PDS).
Speak to a broker about taking out life insurance
Does having dementia make insurance more expensive?
It can. Depending on whether you go through a broker or a direct insurance brand, the insurer can add loadings to your premiums to cover the risk of your condition. However, some brands may offer you insurance with an exclusion for that condition instead of increasing your premium. This means that while your insurance premium is cheaper, you won't be covered if your claim is related to your dementia. Other factors that can affect your premiums include your age, occupation, smoking status, gender and where you live.
One of the main reasons life insurance can be expensive is that when you buy a life insurance policy outside of super, the insurer needs to ascertain the degree of risk you present. In insurance terms, this is called underwriting and generally involves you undergoing a medical and answering questions about yourself. Every insurer’s underwriting process is different but you’ll most likely be asked questions about the following:
- Height and weight to determine your BMI
- When you were diagnosed and your current condition
- Any other conditions you may have
- Family’s medical history
- Current medications
What’s the best way to get life insurance if you have dementia or Alzheimer's?
If you have a pre-existing condition like Alzhiemer's, it's usually best to find an insurance brand that will conduct medical underwriting. It is always best to be upfront about your condition and work with insurers to get the best and most comprehensive cover, even if this means your premiums may be a bit higher.
The other option is to take out no medical life insurance. While these types of policies are very easy to take out, they are generally not as comprehensive, and generally have a clause that any conditions that existed before the cover was taken out will be excluded. This can also be true for life insurance through superannuation.
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Does a family history of dementia impact life insurance?
Insurers may want to know about your family's medical history to decide if you will have any increased risks in the future. Dementia and Alzheimer's are conditions mostly related to age rather than genetics and so if you have a history of the condition in your family, this shouldn't impact your ability to take out life insurance. If you're concerned, speak to a professional insurance adviser or one that has expertise in special risk insurance. They will be able to give you a good idea of what you can and can't get when it comes to life insurance.
Do I have to disclose a family history of dementia or Alzheimer's?
You should let your insurer know if you have a family history of dementia that is considered hereditary. If you’re not sure, it’s best to inform them to be on the safe side. They’ll be able to look into the matter further for you. It’s also recommended that you let them know if a close family member has developed dementia earlier in life.
A dementia diagnosis is a daunting and life-changing experience. While life insurance can’t stop it, it can help pay off all your debts, hospital bills and expenses, making things a little easier for you and your family to cope. Compare your life insurance options here or fill out the form above to speak directly to a broker.
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