There are so many variations on dementia that there is, unfortunately, no way for us to give you a blanket “probably this health class” statement like other pre-existing conditions. So we will go over the different scenarios for finding life insurance for dementia patients. Yet at the end of the day, you will probably need to find an agent to pre-screen with several companies.
How to Save Money on Life Insurance for Dementia Patients
This part is particularly important. For many people with dementia, guaranteed issue can be the only option. That narrows down your choices as well as ways to save money. Use the following tips to help yourself or a loved one find insurance without paying a king’s ransom.
Normally we recommend using a Life Insurance Needs Calculator. You punch in all the numbers and you have a good idea of the face amount you should buy. Because dementia is so tricky to get coverage for, we strongly recommend running a few different scenarios.
- What would be the ideal amount of life insurance if you could get as much as you wanted?
- What is the absolute minimum amount you can work with?
- Will a $25,000 or $50,000 benefit be enough for your family?
Use an Independent Agent
An independent agent will save you a ton of time here. It will be a huge hassle to call every captive agent in your city. Most of them will take your info then call you back after speaking to one of their underwriters.
An independent agent can do that all for you. One phone call. Then they come back with the top 3 or 5 companies that will cover you.
Research Your Guaranteed Issue Options
The industry term for life insurance that will cover virtually everyone is “guaranteed issue”. The key is virtually anything. The problem starts when each company’s guaranteed issue product differs from the next.
For example, the benefit payments might look like the following for a few different companies.
|Policy Duration||Company 1||Company 2||Company 3|
|1-2 Years||120% returned premiums||20% of face amount||40% of face amount|
|3-4 Years||60% of face amount||60% of face amount||70% of face amount|
|5 Years||100% of face amount||100% of face amount||100% of face amount|
The Difference Between Mild Cognitive Impairment and Dementia
Doctors will diagnose people with Mild Cognitive Impairment (MCI) when they start showing mild declines in function. This can be anything from small memory problems to a reduced social function. These are small problems beyond what is normal for the person’s age.
Some people will refer to MCI as pre-clinical dementia because it’s normal to develop dementia within 10 years of MCI diagnoses. Some researchers think this is a transition stage into dementia. Similar to how doctors diagnose pre-diabetes before the onset of overt diabetes.
Underwriting Factors That Affect Life Insurance for Dementia Patients
Pinning down a health class for life insurance is difficult because dementia is so complicated. We urge you to consult with several companies for your unique scenario.
Underwriting life insurance for dementia is difficult because there are so many factors involved. We will cover the factors here and indicate whether they will be favorable or not to your application.
Causes of Dementia
Scientists still don’t know exactly what causes dementia. But here is a list of what scientists have linked to dementia. The underlying cause of your dementia will affect your rates.
- Alzheimer’s Disease
- Down’s Syndrome
- Head Trauma
- Huntington’s Disease
- Parkinson’s Disease
- Pick’s Disease
- Vascular Diseases
Some of these factors are beyond anyone’s control. The doubling up of dementia with many of these other conditions results in difficulty finding traditional life insurance.
Fixed vs. Progressive Dementia
There are two primary types of dementia. Fixed dementia is when cognitive impairment does not get any worse. Progressive indicates worsening cognitive function over time. Fixed dementia is the preferred of the two. Fixed dementia is more commonly associated with traumatic injury or stroke.
Rate of Progression
The slower the patient’s progression, the better. Since so little is known about causes, there is less known about effective treatments for dementia. Once it sets it, doctors have a difficult time slowing down the rate of progression.
Duration of Disease
The underwriter will want to know when a doctor diagnosed dementia. This combination of duration and rate of progression will give underwriters guidelines based on how the dementia is likely to progress.
Age of Onset
Older is better. The longer you can stay healthy, the lower your rates will be. Thus if you have a healthy brain well into your 70s, you will have an easier time underwriting dementia than a person diagnosed in their 50s.
How Dementia Affects Life Insurance
There are a ton of factors for underwriters to take into account. For the most part, life insurance for dementia patients is individual consideration only. This means that the insurance company will look at dementia patients on a case by case basis. This also applies to mild cognitive impairment.
Individual consideration means that any quote you get is unlikely to hold up in underwriting. Before you get a realistic idea of the numbers, you will have to submit an application. Once you submit an application, then the underwriter will request all the medical records.
This isn’t to say that applying for life insurance for dementia patients is random. Sometimes individual consideration can feel like bowling in a lane that is mostly gutters. But there is one thing an insurance agent can do to help out the process.
Pre-screening is when you send the relevant information (like what we talked about above) to your insurance agent. He or she will email the pertinent medical information (without any info identifying you) to the underwriters at several potential companies.
The underwriters usually take a few days to review the information before they reply. But after a week, your agent should have several emails. While these emails will not be offers, they indicate what the rating will probably be.
What The Underwriter Wants To Know
Most agents will do a pre-screen before applying for life insurance for dementia patients. Make sure you have the following information handy when you first start the search:
- Date of diagnoses
- Recent Symptoms
- Family history of dementia
- What medications, how much, how often
- Other health conditions, like depression
That should give the underwriter enough to go on. He/she will determine whether you qualify for traditional life insurance or have to consider other options. If you do qualify, at what rating.
What You Should Know About Guaranteed Issue Products
Individual consideration only makes choosing life insurance hard. In cases like this, you might have to opt for a guaranteed issue product.
Guaranteed issue is a good option to consider when you have a case of advanced dementia. The face amounts are typically lower so talk with your financial planner about the amount of life insurance you need.
Guaranteed issue policies are exactly what they sound like. The insurance company will take anyone. There are some exceptions, so make sure to still ask your agent about which company will be best for you.
The downside of guaranteed issue products is they frequently charge more for lower benefit amounts. The companies assume that if you are buying guaranteed issue, you have a health problem. Which is why, in addition to lower benefits, you often see graded benefits.
Each company sets up their graded benefits differently. They usually go over the course of 5 years. The first year might be 100% refunded premiums. The 2nd and 3rd years might see 60% of the benefits. Years 4 and 5, 80%. After the 5th year, it works like normal life insurance. Everything gets paid out.
How Abrams Insurance Solutions Can Help
At Abrams Insurance Solutions, we specialize in helping people with pre-existing conditions find life insurance. We have spent years developing relationships with underwriters at over 70 top-rated companies. That way, we can go to bat for our clients and find them great coverage. Great coverage at great rates.
If an offer comes back that we don’t think is fair, we will negotiate on your behalf. We will shop the market for you to make sure we can’t get a better offer somewhere else.
The Bottom Line
As independent agents, we work for you and not the life insurance companies. If you have any questions at any point in the process, you can reach us at 858-703-6178. All calls are 100% confidential and there is never any obligation to buy.