Insurance

If your loved one lives alone, you’ll need to help them manage their paperwork and take charge of it eventually as their condition progresses. This includes insurance documentation.

Key things to think about:

House insurance
Make sure you know where the person’s home contents and buildings cover insurance documentation is kept. Ask your loved one if it’s OK for you to have copies or even look after the original policy documents. Make a note of the renewal dates so that you can speak to the person’s insurer and arrange for the policies to be renewed. Although many insurers automatically renew policies these days, it’s still worth making a note of the renewal dates so that you can ensure that this is the case or shop around on the person’s behalf in good time.

Motor insurance
If your loved one is still driving, again ensure you know when the person’s car insurance is due to renew. Make sure you have plenty of time to shop around on the person’s behalf. You may also want to make a note of the date their MOT expires and the date their vehicle will be due for an annual service. Incidentally, your loved one will need to let the DVLA know about their dementia diagnosis. They have a legal obligation to do so. They may not need to stop driving but must make the DVLA aware of their situation, or they could face a fine of up to £1,000.

Health-related insurance policies

Other types of insurance may benefit your loved one. If the person took out health insurance or other types of cover to protect them in the event of illness, they may be able to make a claim. 

• Critical illness insurance pays out a tax-free lump sum if the policyholder is diagnosed with a serious illness such as cancer, heart attack, stroke, Parkinson’s disease, or multiple sclerosis. However, some policies also cover dementia and Alzheimer’s disease. The insurer will usually want to see evidence of a definitive diagnosis of dementia or Alzheimer’s disease from a neurologist, psychiatrist, or geriatrician.

If your loved one took out a critical illness policy before they were diagnosed with dementia, they may be entitled to a lump sum payout. Many people don’t realise that critical illness can cover dementia.

While terms can vary depending on the insurer, Legal & General states that the diagnosis must have ‘permanent symptoms’, which is, of course, the case with dementia, and demonstrate the person’s loss of the ability to remember, reason, understand, and perceive.

Many insurers offering critical illness cover will insure a diagnosis of dementia or Alzheimer’s disease.

• Life insurance – your loved one may also have life insurance. While this is a morbid topic, it’s helpful to understand how life cover works. While terms will vary from one insurer to another, life insurance usually pays out a lump sum if a person dies due to dementia. It typically covers a person for between 10 to 25 years.

However, if a person already has dementia, they usually won’t be able to take out a new life policy.

• Health insurance – some health insurers are now offering tailored options for those living with dementia. Vitality has created Later Life Options insurance, designed to help support people with the financial impact of later life.
When you buy Vitality’s Serious Illness cover – which offers a tax-free payout on diagnosis of a serious illness – you automatically get dementia and FrailCare Cover as standard.

If a person is diagnosed with dementia or Alzheimer's, Vitality will pay out a lump sum. The amount paid is based on the severity of your loved one’s condition. 

You may consider taking out health insurance for your loved one, but be aware of limitations. Health insurance doesn’t typically cover dementia treatment, although it may cover the cost of tests and scans that result in a diagnosis. Dementia is generally excluded from health cover as it’s regarded as a chronic condition.

• Income protection – if your loved one was of working age when diagnosed and had income protection cover, they may be able to claim. Income protection typically pays out a monthly sum of 50 to 70 per cent of the person’s salary if they can’t work due to illness or injury. The policy payments will continue until they return to work or retire. Provided your loved one continues to pay the monthly premiums, they should receive a monthly sum when diagnosed with dementia.

If in doubt, seek advice from your loved one’s financial adviser or broker or speak to their insurer.