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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 suffering 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 there’s no cure, but there are steps you can take that can make a difference for both sufferers, and their carers.
Can you get life insurance when you already have a family history of dementia or Alzheimer’s?
Yes, it’s possible. Having a family history of dementia, doesn't stop you from taking out a life insurance policy.
Here are the options for getting life insurance cover:
Direct from your insurer: getting your policy direct from an insurer may sound simpler than if you bought your policy via a broker, but these policies are usually not fully underwritten, and often have hidden exclusions and restriction clauses. It’s important to know what to look out for when you’re comparing life insurance policies.
Purchased through a life insurance broker: also known as retail insurance, a broker will set up 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’re likely to 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 not affordable for you, and you’re concerned about a dementia diagnosis later on.
Consulting a broker can streamline getting your life insurance in place. Brokers can get pre-assessments for any health conditions you’re concerned about, including via any family history. Then your broker researches insurers on your behalf, improving your chance of finding quality cover, without having to pay through the nose.
Once you’re approved for life insurance, there’s no waiting period before you can make any claims connected to a dementia diagnosis, though it’s worth noting that you’ll only receive your life cover payout for Alzheimer’s once you have only 24 months to live. Always refer to your product disclosure statement (PDS) for details.
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 Australians 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 will inquire about your family history. You will need to disclose any relevant family medical history to ensure you’ll receive comprehensive cover, even if you may have to pay an additional premium loading. And it’s worth noting, a family history doesn’t necessarily mean your insurer will not cover you for dementia.
What does this mean?
Well, you’re not responsible for your genetics.
If you are not diagnosed as having dementia at the time of applying for your cover, dementia won’t be considered as a pre-existing condition for you. Your policy can go ahead with no genetic test required.
Be aware: if you have parents who are already diagnosed, you may need a genetic test as part of applying for your cover. They are likely to ask questions as to the age your parents were diagnosed and the type of dementia.
How a family history of dementia affects your life insurance costs
Life insurance underwriting processes typically involve assessments that factor in your:
age
Body Mass Index (BMI)
diagnosis
medical history
current medications
family history.
If you have a family member who has been diagnosed with dementia, you may be able to still take out Trauma and TPD (total and permanent disablement) cover without having an exclusion or having to pay a loading. Dementia is an insured Trauma event and you can claim your TPD cover if you're diagnosed with dementia and get to a stage where you can no longer work.
Best practice for getting life insurance with a family history of dementia or Alzheimer’s
Look for insurers that conduct medical underwriting, and disclose your family history transparently.
Policies that offer no medical underwriting may 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.
Yes, your premium may be lower but non-disclosure of family medical history may void your contract. There’s no peace of mind in knowing you’ve paid a lower premium, but you’re unlikely to see any benefit payments.
Bottom line
Navigating life insurance with a family history of dementia or Alzheimer's can be complex.
Working with knowledgeable professionals and being transparent about your family’s history 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.
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Financial disclaimer The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
