An Alzheimer’s disease diagnosis does not always prevent you from getting life insurance
As more and more Baby Boomer’s continue the inevitable march toward senior citizen status, the number of cases of age-related diseases also continues a steady climb as well.
One of the more well-recognized of these is Alzheimer’s disease, a progressive condition that destroys a person’s memories and slowly erodes important mental functions. In clinical terms, cells in the brains of people with Alzheimer’s disease degenerate and die, creating the mental decline. Alzheimer’s is also closely linked to the onset of dementia, which is a series of brain disorders that diminish social and intellectual skills.
While a diagnosis of Alzheimer’s is certainly a cause for concern, one piece of good news for an Alzheimer’s patient is that despite their condition, they will still be able to take care of their loved ones if they are seeking to purchase a term life insurance policy.
Understanding Alzheimer’s disease
Alzheimer’s disease develops slowly. Symptoms increase over a span of several years, ultimately affecting most parts of a person’s brain. At first, someone with Alzheimer’s may notice only a few minor lapses, such as difficulty remembering things or being confused from time to time.
As the disease progresses, these bouts become more frequent, and the degree of memory loss and confusion escalate. Eventually, people with Alzheimer’s may forget names, places, people, dates and simple information, resulting in a high degree of frustration and a significant change in their personality.
On average, a person diagnosed with Alzheimer’s can expect to live 8 to 10 years, but some people live as long as 20 years after being diagnosed.
Alzheimer’s can be broken down into five stages, and the characteristics of each stage are important to know so that you know what to expect when trying to obtain a life insurance policy.
Preclinical Alzheimer’s disease – Modern medicine has developed a series of tests to help spot Alzheimer’s disease long before any symptoms appear. The preclinical stage can last for many years. Genetic tests can identify if a person is at a higher risk for developing Alzheimer’s disease. Biomarkers, which are measures that can also indicate an increased risk for developing Alzheimer’s, can also be used to determine an increased risk of Alzheimer’s as well as confirming an early stage diagnosis. Technologies have also been developed that can spot deposits of a protein called amyloid beta, which is one of the key indicators that Alzheimer’s is present.
Mild cognitive impairment – This is the first tangible evidence that Alzheimer’s exists and is characterized by small changes in a person’s thinking and ability to remember things. There is a tendency to forget some appointments, conversations or other recent events as well as problems in making sound judgments when it comes to completing certain tasks.
Mild dementia – A person moves into this stage when there is a noticeable decrease with memory and thoughts that impacts day to day living. A person will have a hard time remembering recently learned information or have problems solving complex tasks. This stage is also characterized by a change in personality, resulting in bouts of being withdrawn or anger as well as misplacing things or finding the right words to express ideas.
Moderate dementia – In this stage, mild dementia progresses as people become much more confused and need help with their daily activities and care. Memory loss increases, lack of sound judgment increases and there is a major change in behavior and personality, sometimes resulting in angry and aggressive outbursts.
Severe dementia – Mental capacity declines and affects a person’s ability to move and complete even simple physical tasks. A person’s ability to speak becomes severely impaired and they will require assistance with most all of their daily living tasks including eating, bathing, and using the bathroom, among others. Eventually a person is not able to swallow or have any control over bladder and bowel movements. Death often takes place due to malnutrition, dehydration, or pneumonia.
How to get life insurance after a diagnosis
Depending on what stage you are with Alzheimer’s disease will determine how challenging getting a life insurance policy can be. While many companies do not write insurance for people with Alzheimer’s there are many that do.
The qualifier for people with Alzheimer’s is the type of policy a person can qualify for. Generally, those companies that do underwrite policies will be able to offer a guaranteed issue life insurance policy.
A guaranteed issue life insurance policy will generally have a minimum age requirement of 50 years old, but there are a few exceptions where policies are issued for people as young as 40 years old.
The key provision of this kind of policy is that it may include a three-year “Graded Death Benefit”. This means if a person passes away during the first three years of policy coverage due to Alzheimer’s disease, dementia or consequences from their memory loss, only a part of the death benefit is paid to beneficiaries of the policy. Some policies will only pay back what was paid in premiums during the period the policy was in effect, along with a small additional percentage.
When the three-year grading period is over, the policy would pay 100 percent of the death benefit. The notable exception is that graded policies generally do not pay any death benefit for accidental deaths. The good news is that even with the onset of some Alzheimer’s symptoms, many people will live a long time past the initial grading period.
Another key provision is that while a guaranteed issue life insurance policy will have higher premiums, no medical exam will be required and no medical records will be examined. For people who want to keep their condition private or who already have issues answering difficult or complicated medical questions, this can be a great relief.
Guaranteed issue life insurance is most times a term life insurance policy, with a specific termination date. When a person turns 80 years old, many policies will terminate coverage.
Also, these types of policies are generally written for smaller amounts, in many cases $25,000 or so, which is not designed to create a windfall for heirs or replace lost income if a person passes away. These policies often are used to pay for final medical and burial expenses.
Because policy terms and limitations will vary from company to company, it’s best to competitive shop a guaranteed issue life insurance policy before executing the one that’s best for your situation.