If you or a loved one has been diagnosed with a form of dementia like Alzheimer's, you might have wondered if it is possible to get 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.
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.
A far less frustrating and time-consuming option to getting life insurance, 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).
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:
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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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.
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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