Does a family history of dementia stop you getting life insurance?

The Australian Institute of Health and Welfare estimates that we have around 420,000 Australians living with dementia. According to Dementia Australia, it’s also the leading cause of death for women in Australia, and the second leading cause of death for all of us, nationwide. 

Not only that, it’s estimated that around 1.6 million Australians are involved in caring for one or more loved ones with dementia.

It’s fair to say then, that dementia is a condition with a big impact on our nation, our communities, and our families and, while there’s no cure, there are steps you can take that can make a difference for those with dementia and their carers. 

Can you get life insurance when you already have dementia or Alzheimer’s?

Yes, it’s possible. Having dementia, or a family history of dementia, doesn’t preclude you from taking out a life insurance policy. 

In fact, you have several options for getting your cover:

  • Direct from your insurer: Getting your policy direct from your insurer may require medical underwriting. The application process may be simpler than if you bought it via a broker, but the catch is that you can also face higher premiums and/or exclusions for other conditions.
  • Purchase through a life insurance broker: A broker can assist you in finding a suitable life insurance policy that covers you for dementia. While your policy can cost more this way, the cover you’ll get typically offers comprehensive benefits you’ll likely need later on.
  • Life insurance through your superannuation: Super accounts sometimes include life insurance policies. While your payout benefit may be lower than if you had a standalone policy, this is definitely an option if direct or retail cover is prohibitively expensive for you, and you’re concerned about a dementia diagnosis.

Consulting a broker can streamline getting your life insurance in place. Brokers assess your needs, conduct searches of possible insurers on your behalf, and improve your chances of finding quality cover, while keeping overall costs low.

Keep in mind that once you’re approved for life insurance, there may be a waiting period outlined in your product disclosure statement (PDS) before you can make any claims connected to your dementia diagnosis.

Alzheimer’s is a form of dementia by the way, so when it comes to life insurance policies, the two conditions are treated pretty much the same. Around three-quarters of people diagnosed with dementia have Alzheimer’s.

Is dementia considered pre-existing if you’ve never been tested for it?

This is one of the most commonly asked questions about dementia and life insurance – especially by Australians who have a family history of dementia.

The short answer is that insurers may inquire about your family history but they typically prioritise age-related risks over genetic predispositions. 

That said, it’s wise to disclose any relevant family medical history to ensure you’ll receive comprehensive coverage, even if you may have to pay an additional premium loading. Not all family histories automatically mean your insurer will decide dementia is a pre-existing condition for you.

What does that mean?

Well, you’re not responsible for your genetics. 

If you have no pre-existing diagnosis or medication for dementia at the time of applying for your cover, dementia won’t be considered as a pre-existing condition for you – unless you have more than one close relative who is already diagnosed. 

Having only one relative diagnosed with any form of dementia, and not being diagnosed yourself, means your insurer won’t consider your chance of developing dementia as a pre-existing condition. Your policy can go ahead with no genetic test required.

If you have two or more relatives who have been diagnosed with any form of the illness, you’ll need a genetic test as part of applying for your cover.

How a dementia diagnosis affects your life insurance costs

Life insurance underwriting processes typically involve assessments of various factors, including your: 

  • age
  • Body Mass Index (BMI)
  • diagnosis timing
  • medical history
  • current medications

If you’ve already been diagnosed with dementia, or dementia is a pre-existing condition for you (see above), you can still take out your life insurance policy. You will likely face a premium loading.

Best practice for getting life insurance with dementia or Alzheimer’s

Look for insurers that conduct medical underwriting, and disclose your condition transparently. 

Policies that offer no medical underwriting will have lower premiums, though this kind of cover may have more limitations and greater exclusions. You’ll need to weigh up whether your potential payout is worth the cheaper premium you’ll be paying.

I don’t recommend not disclosing your history of dementia. Yes, your premium may be lower but non-disclosure of pre-existing conditions voids your cover. There’s no peace of mind in knowing you’ve paid a lower premium, but you’re unlikely to see any benefit payments.

The bottom line

Navigating life insurance with dementia or Alzheimer’s can be complex.

Working with knowledgeable professionals and being transparent about your condition can help you secure suitable cover.

A good insurance broker can help you know when, and what, to disclose during your life insurance application. 

Non-disclosure of any pre-existing condition can void your cover and is not recommended.

Is there a history of dementia in your family? Have you tried getting life insurance before? Let us know in the comments section below.

Also read: Common mistakes over 50s make on their health insurance

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