Ben Nguyen 
Alzheimer’s Disease is a devastating illness impacting close to 600,000 Canadians, with projections of that number rising to 937,000 by 2031, according to the Alzheimer Society of Canada. Coping with an Alzheimer’s diagnosis poses immense emotional, medical, and financial challenges for both patients and families. Obtaining adequate life insurance coverage after a diagnosis is incredibly difficult but also extremely important.
This comprehensive expert guide examines all aspects of getting life insurance with Alzheimer’s in Canada. We’ll cover statistics, challenges, available policy options, approval odds, application tips, using benefits, and more.
In this article, Dementia and Alzheimer’s will fall into this same category. This is because most life insurance companies will lump them together and treat them identically.
Compare Dementia vs. Alzheimer’s Disease: What is the Difference?
Before diving into the specifics of life insurance, it’s helpful to understand Alzheimer’s Disease and the broader subject of dementia.
What is Dementia?
Dementia is an umbrella term referring to a group of brain disorders characterized by impairment of mental capabilities like memory, judgement, and reasoning. There are many types of dementia with a variety of causes. The most common is Alzheimer’s Disease.
According to Alzheimer’s Disease International, dementia can be categorized into several main types:
- Alzheimer’s Disease – 60-70% of cases
- Vascular Dementia – Roughly 20%
- Dementia with Lewy Bodies – 15%
- Frontotemporal Dementia – Less than 5%
- Mixed Dementia – 10% (mix of 2+ types)
Dementia is not a normal part of aging, but age is the biggest risk factor.
What is Alzheimer’s Disease?
Alzheimer’s Disease is the most common cause of dementia, accounting for an estimated 60-80% of cases. It is a progressive brain disorder caused by the accumulation of abnormal protein deposits in the brain. This damages and kills brain cells, leading to a steady decline in cognitive abilities.
Hallmark symptoms include memory loss, impaired judgement, disorientation, personality changes, and difficulty with daily living activities. As Alzheimer’s advances, patients require increasing levels of caregiving and medical support.
While age is the predominant risk factor, Alzheimer’s can also occur in a rarer, early-onset form, beginning when people are in their 30s, 40s or 50s. Heredity also plays a role, with genetic links identified. Overall, Alzheimer’s usually develops slowly and gradually worsens over multiple years.
Alzheimer’s Statistics in Canada
Some key statistics on Alzheimer’s Disease and dementia in Canada:
- Over 564,000 Canadians are currently living with diagnosed Alzheimer’s or another dementia as of 2022 (Alzheimer Society)
- Almost 75% of cases are women (CMAJ)
- Projected to increase to 937,000 diagnosed cases by 2031, up 66% (Alzheimer Society)
- 8.6% of Canadians 45+ reported Subjective Cognitive Impairment (Statistics Canada)
- Alzheimer’s was the 4th leading cause of death in Canada in 2020 (Statistics Canada)
- Dementia deaths increased by 66% from 2000 to 2020 (Statistics Canada)
This data highlights the growing prevalence of Alzheimer’s in Canada and emphasizes the need for financial readiness. Life insurance plays a vital role in that preparation.
Challenges Getting Life Insurance with Alzheimer’s and Dementia patients
Unfortunately, successfully obtaining new life insurance after an Alzheimer’s diagnosis is extremely difficult:
- Most life insurance companies in Canada will automatically decline applicants who already have an established Alzheimer’s diagnosis when applying for a new policy.
- At best, only guaranteed issue life insurance may be an option, but this comes with strict limitations:
- Maximum $25,000 to $50,000 in coverage
- Premiums are around 4-6 times higher than standard rates
- A two-year waiting period before the full death benefit would pay out
- Trying to increase or change coverage on an existing life insurance policy after an Alzheimer’s diagnosis is highly unlikely to be approved.
- Any exclusions specifically for Alzheimer’s or dementia that were present on existing policies will still apply.
Essentially, applicants with Alzheimer’s have little chance of obtaining affordable coverage with substantial death benefits. But there are still some limited options, which we’ll explore shortly.
Why Life Insurance with Alzheimer’s Matters for The Canadian Patients
Despite the difficulties in obtaining coverage, life insurance remains extremely important for those with Alzheimer’s for several reasons:
Covering Long-Term Care Costs
As Alzheimer’s progresses, round-the-clock caregiving and supervision frequently become necessary. The annual costs of this type of long-term care can average over $33,000, according to The Globe and Mail. Life insurance benefits payouts upon death can help cover these expensive care expenses.
Replacing Lost Income
Alzheimer’s often leads to reduced working capacity or complete inability to work. Life insurance proceeds can help replace that lost income for families after their loved one’s death. This income replacement is especially important if the patient is the main breadwinner.
Supporting Family Caregivers
Caring for someone with Alzheimer’s requires an immense commitment. Family members often become full-time caregivers, having to take time off work or quit their jobs. Life insurance death benefits can provide needed financial support to these family caregivers.
Covering Funeral Costs
With average funeral costs in Canada ranging from $12,000 to $15,000, life insurance payouts can fully cover final funeral arrangements and additional end-of-life costs.
Given these significant expenses that Alzheimer’s patients and families face, obtaining some life insurance coverage remains a wise financial step.
Available Types of Life Insurance with Alzheimer’s or Dementia patients in Canada
For those diagnosed with Alzheimer’s Disease, traditional underwritten life insurance policies are difficult or impossible to obtain. However, these alternative options may provide some coverage:
Guaranteed Issue Life Insurance with Alzheimer’s
- Guaranteed approval regardless of health history
- No medical exam or health questions required
- Maximum death benefit is typically $25,000 to $50,000
- Annual premiums average 4-6 times higher than rates for healthy individuals
- Policy terms are limited, usually 10-25 years only
- There is a waiting period of 2 years before the full death benefit will be paid
- May have some coverage exclusions depending on product and carrier
- Often used to cover final expenses and funeral costs
Simplified Issue Life Insurance with Alzheimer’s
- Requires answering a limited number of medical questions
- No full medical exam required
- Face amounts up to $500,000 available depending on age
- Approval is not guaranteed and will depend on answers and Life Insurance with Pre-Existing Conditions in Canada.
- May require HIV testing before approval
- Best chance for early-stage Alzheimer’s diagnosis with mild symptoms
- Premiums cost about 50-100% more than fully underwritten policies
Graded Death Benefit Life Insurance with Alzheimer’s
- Provides guaranteed approval like guaranteed issue products
- Has an increasing payout schedule over the first three policy years
- Starts with the return of premium, then 30%, then 60%, then 100% payout
- After the 3-year graded period, the full death benefit is paid
- Annual premiums are lower than comparable guaranteed issue policies
Final Expense Insurance with Alzheimer’s
- Uses simplified underwriting without a medical exam
- The maximum death benefit is typically capped at $25,000
- Primarily designed to cover immediate funeral and final medical costs
- Approval is not guaranteed, and health factors are considered
- The best chance is early-stage diagnosis before major symptoms appear
- Premiums less expensive than guaranteed issue life insurance
Prepaid Funeral Plans with Alzheimer’s
- Not considered life insurance but can cover funeral costs
- Involve entering into a contract with a funeral home
- Payments are made over time, which locks in set funeral services
- Guarantees services at an agreed preset price
- Total coverage depends on specific services selected
- Can be funded by life insurance or annuity to pay costs
Accelerated Death Benefit Riders with Alzheimer’s
- Attached to permanent life insurance policies as a rider
- Allow for a partial accelerated payout of the death benefit
- Typically contingent on terminal illness diagnosis
- Alzheimer’s and dementia are usually not eligible illnesses
- Without a terminal diagnosis, rider payout will not apply
In addition to life insurance, long-term care insurance and critical illness coverage should be explored prior to diagnosis. While not life insurance, these policies can provide valuable benefits to those still living with Alzheimer’s.
An experienced life insurance broker can explain all the options and maximize the chances of approval.
Cost of Life Insurance with Alzheimer’s or Dementia patients
Because guaranteed issue life insurance is the only viable option, premiums will be much higher than typical rates for healthy individuals:
- Average annual premium costs range from 4-6 times higher than common rates for healthy policyholders
- For a $25,000 guaranteed issue policy, annual premiums often exceed $1,000
- Factors like smoking and other health problems will increase premiums further
- Taking out multiple smaller policies from different carriers can multiply total insurance costs
While certainly expensive, guaranteed issue insurance remains far more affordable than having no coverage at all after an Alzheimer’s diagnosis. Having at least some protection in place can provide real peace of mind and make the costs worthwhile for many families.
Here are some sample annual guaranteed issue premiums at various coverage amounts:
| Coverage Amount | Annual Premium |
|---|---|
| $10,000 | $240 |
| $25,000 | $600 |
| $50,000 | $1,200 |
| $75,000 | $1,800 |
| $100,000 | $2,400 |
And estimated annual premiums for a $25,000 policy based on health factors:
| Health Profile | Annual Premium |
|---|---|
| Non-smoker, No Other Conditions | $600 |
| Non-smoker, Other Health Issues | $900 |
| Smoker, No Other Conditions | $1,000 |
| Smoker, Other Health Issues | $1,500 |
While not inexpensive, guaranteed issue life insurance remains critically important for Alzheimer’s patients and their families. The premium costs bring peace of mind, knowing loved ones will receive some financial support after death.
Approval Odds of Life Insurance with Alzheimer’s
According to aggregated industry data, applicants with an established Alzheimer’s diagnosis face the following approval odds:
- 0% approval for regular, fully underwritten life insurance
- 10% approval for simplified issue life insurance
- 75% approval for guaranteed issue life insurance
This data clearly indicates that guaranteed issue life insurance realistically offers the only viable path to gaining any coverage after an Alzheimer’s diagnosis.
Applying for Life Insurance with Alzheimer’s and dementia
Because options are so limited, applicants need to take certain steps when seeking life insurance with Alzheimer’s:
- Work with an experienced independent broker who can access multiple insurance providers.
- Get quotes from several guaranteed issue insurance carriers – at least 5-10 are recommended.
- Apply for coverage immediately after early diagnosis for best potential results.
- Seek the maximum amount of guaranteed issue coverage you may qualify for.
- Be prepared to apply for and manage multiple smaller policies to add up to needed coverage.
- Accept that premium costs will be 4-6 times higher than common rates.
- Understand waiting period limitations before the full death benefit is paid.
An expert broker can advise you on strategies to maximize your chances of getting approved and piecing together adequate coverage.
Making the Most of Limited Benefits of Life Insurance with Alzheimer’s
If able to secure even modest guaranteed issue life insurance, you can optimize the value of those benefits by:
- Saving a portion of the lump-sum payout to help cover expensive late-stage care.
- Investing part of the proceeds in low-risk securities to generate ongoing income.
- Using a small amount specifically for final funeral and burial costs.
- Withdrawing or borrowing against cash value minimally during the waiting period.
- Drawing down payments gradually as needed rather than rapidly spending.
- Consider putting a trusted third party in charge of managing proceeds.
With Alzheimer’s, every dollar matters. Proper planning around even small policy benefits can extend their usefulness.
Added Value of Critical Illness and Long-Term Care Insurance
Beyond just life insurance, those with Alzheimer’s may also benefit from these supplementary types of coverage:
Critical Illness Insurance
Critical illness insurance provides a tax-free cash payment if diagnosed with major specified diseases like Alzheimer’s. However, applicants must obtain the coverage before showing any symptoms or getting tested.
Long-Term Care Insurance
This funds home care, assisted living, and nursing home expenses. However, applicants must also get coverage prior to diagnosis. Those already exhibiting cognitive issues will be declined.
These policies can provide vital financial resources to patients still living with Alzheimer’s. Life insurance helps families after someone’s death, but critical illness and long-term care benefits support the living.
Pros of Life Insurance with Alzheimer’s
- Provides at least some life insurance coverage when options are limited
- Guaranteed approval is available regardless of health history through guaranteed issue policies
- Gives families quick access to a lump-sum payout to help cover expenses
- Can cover final funeral and medical costs even if limited amounts
- Peace of mind knowing family will have at least some financial support after death
- Proceeds can be used flexibly for costs like long-term care, income replacement, etc.
- Locks in insurability before disease advancement make approval impossible
- Potential to provide critical income tax-free to support family caregivers
- Avoid burdening family with the entirety of end-of-life costs
Cons of Life Insurance with Alzheimer’s
- Premium costs are much higher, often 4-6 times rates for healthy individuals
- Maximum death benefit amounts are low, usually only up to $25,000 to $50,000
- Policies have strict two-year waiting periods before paying full death benefits
- Limited policy terms available, typically a maximum of 10-25 years
- Still leaves potential coverage gaps even with multiple policies
- Requires financial discipline to avoid misusing or squandering funds
- Paying high premiums for years without knowing if benefits will be needed
- The application process can be complicated and time-consuming
- Managing multiple policies and payments can be burdensome
- Beneficiaries may not use funds in line with intentions or needs
While not a perfect solution, life insurance still remains critically important for those with Alzheimer’s and their families. The pros generally outweigh the cons when facing such a financially devastating illness.
Where to Buy Life Insurance with Alzheimer’s or dementia
There are a few options for where to purchase life insurance coverage after an Alzheimer’s diagnosis:
Licensed Life Insurance Brokers
Given the myriad challenges of getting life insurance with Alzheimer’s, working with a top brokerage is highly recommended. Reasons to get professional assistance include:
- Expertise with High-Risk Cases – They specialize specifically in difficult situations like Alzheimer’s.
- Access to Numerous Providers – They can access many guaranteed issue carriers to compare.
- Policy Optimization – They can help structure multiple policies for maximum value.
- Guidance on Alternatives – They advise on supplementary options beyond just life insurance in Canada.
- Application Support – They assist in submitting and following up on applications.
- Ongoing Policy Management – They help manage the policies going forward.
- A broker well-versed in underwriting, impairments, and guaranteed issue insurance can offer tremendous value. They make the process much smoother and maximize your chances of success.
Directly from Carriers
Some leading guaranteed issue carriers include:
- Industrial Alliance (iA Financial Group)
- Foresters Financial
- Wawanesa Life
- Sun Life Financial
- Manulife
Purchasing directly from select carriers can sometimes offer convenience. However, the choice is limited and impartial advice is lacking.
Online Insurance Platforms
Websites like Life buzz allow you to compare quotes digitally from multiple insurers. This can be fast and convenient but lacks personalized service.
Key Tips
When purchasing Alzheimer’s life insurance coverage, you should:
- Speak with at least 5-10 brokers and carriers for thorough market access
- Leverage broker expertise but also directly contact companies
- Get quotes from top guaranteed issue insurance providers
- Prioritize highly rated, established insurers
- Avoid policies with excessive fees or long waiting periods
Taking time to explore all options maximizes your chances of securing the best guaranteed issue life insurance for your specific situation.
Lifebuzz also has other valuable articles covering securing life insurance policies with various pre-existing health conditions, including:
- Life Insurance with Cancer
- Life Insurance with Alzheimer’s or Dementia
- Life Insurance with Autism Spectrum Disorder
- Life Insurance with Parkinson’s Disease
Take Control of Your Financial Future by Life Insurance with Alzheimer’s
Without question, coping with Alzheimer’s is massively difficult, both emotionally and practically, for all involved. However, financial preparation through life insurance and other coverage can help both patients and families weather the storm.
Working with a compassionate, ethical broker, you can put plans in place to protect assets even in the face of cognitive decline. Life insurance proceeds enable families to cover costs, replace income, support caregiving, and manage this complex illness with greater security.
At LifeBuzz, we strive to secure coverage for all Canadians, even in the toughest of circumstances. Our advisors have decades of experience specifically helping high-risk and impaired-risk applicants across Canada. We’re here to guide you in taking control of your financial future.
To discuss your unique situation and get customized guaranteed issue life insurance quotes, please contact us today!
Frequently Asked Questions (FAQs)
How do you file a life insurance with Alzheimer's claim?
Contact the insurance company promptly after the insured's death. They will provide the required claim forms and instructions on documents needed, such as a death certificate.
What documents do you need for a life insurance with Alzheimer's claim?
Typical required documents are a completed claim form, certified death certificate stating the cause of death, ID for beneficiaries, policy number, and possibly medical records related to the Alzheimer's diagnosis and treatment.
Does a life insurance company require an autopsy for a life insurance with Alzheimer's claim?
In most cases, no. Insurers rely on medical documentation and death certificates. Autopsies are rarely performed for life insurance claims, including those involving Alzheimer's.
Can you dispute a denied life insurance with Alzheimer's claim?
Yes, if you believe the claim was wrongly denied, additional information can be provided to appeal the decision. Legal action may also be an option if the appeal is unsuccessful.
How long does it take to pay a life insurance with Alzheimer's claim?
For an approved claim, payment is usually made within 30 days or less after the insurer has received all required documentation. Applicable waiting periods will also impact timing.
Do you have to pay back a life insurance with Alzheimer's claim if that was the cause of death?
No, the death benefit cannot be reversed if the cause of death is attributed to Alzheimer's. The insurer must honour an approved policy and claim.
Can insurers delay payment of a life insurance with Alzheimer's claim?
Beyond any applicable waiting period, insurers cannot further delay payment on a valid Alzheimer's claim. Prompt submission of forms assists with timely payout.
What could delay a life insurance with Alzheimer's claim payout?
Incomplete forms, missing documents like a death certificate, disputes around the cause of death, or an investigation for potential fraud could potentially delay payment.
What might disqualify a life insurance with Alzheimer's claim?
Reasons could include an incomplete claim, denial of terminal diagnosis if required, death during the suicide exclusion period, or finding the policy was obtained fraudulently.
Do life insurance with Alzheimer's death benefits have to be paid as a lump sum?
Most commonly paid as a lump-sum, but payout options vary. Beneficiaries can choose installment payments if available under the policy.
Do life insurance with Alzheimer's death benefits have to be paid as a lump sum?
Most commonly paid as a lump-sum, but payout options vary. Beneficiaries can choose installment payments if available under the policy.
How soon after an Alzheimer's diagnosis can you apply for life insurance?
It's best to apply life insurance with Alzheimer's immediately after diagnosis for the highest coverage amounts before the disease progresses further.
Can you get life insurance with Alzheimer's if you are over 70?
Yes, but maximum policy amounts decrease with age. Most carriers set age limits between 80-85 for guaranteed issue coverage.
Will life insurance with Alzheimer's cover assisted suicide in Canada?
Most policies contain exclusions for death from assisted suicide within the first two years. Afterward, the claim would be paid.
Does life insurance with Alzheimer's pay for experimental treatments?
Life insurance only pays out a death benefit to your beneficiaries. It does not cover healthcare or treatment costs while living.
Can you be denied life insurance with Alzheimer's after genetic testing?
Insurers do not require genetic testing, so positive markers cannot impact a guaranteed issue policy application later.
Can I convert term life insurance to permanent life insurance with Alzheimer's?
No, term policies cannot be converted after diagnosis. You must apply for a separate guaranteed issue permanent policy.
What if I stop paying premiums on life insurance with Alzheimer's?
The policy will lapse if payments stop, leaving nothing for beneficiaries. Keeping it in force is crucial.
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