Category Life Insurance

Alzheimer’s disease: Understanding the financial impact and how to protect yourself

21 September 2023 Clyde Parsons, Chief Innovation Officer at BrightRock
Clyde Parsons

Clyde Parsons

Every year, on 21 September, the world observes World Alzheimer’s Day to raise awareness of the disease, its effects, and how to prevent it.

While it is important to raise awareness of the disease, its causes, and available treatments, it is also important to help people understand its financial costs and how they can protect themselves and their families financially. Clyde Parsons, Chief Innovation Officer at needs-matched life insurer BrightRock answers key questions and provides useful tips.

What is Alzheimer’s disease?
Alzheimer’s disease is a type of dementia that affects a person’s cognitive functioning, including their memory, thinking, and behaviour. It is a progressive disease, which means its effects worsen over time. There is no cure for Alzheimer’s, and eventually, a person with Alzheimer’s will no longer be able to care for themselves or perform the daily tasks of normal life.

Who is at risk of Alzheimer’s disease?
Age is the biggest risk factor for Alzheimer’s, as most people are diagnosed with it after the age of 65. However, people younger than 65 can also develop the disease, which is known as early-onset Alzheimer’s. Age does not cause Alzheimer’s disease, and not everyone who lives to an old age will develop it. But the world’s population is ageing, and with that comes an ever-growing population of people living with this debilitating disease.

People most at risk are those with a family history of the disease. Genetic research has shown that there is a strong genetic involvement with Alzheimer’s disease. But there are other risk factors too, such as a history of brain injury and cardiovascular disease. Research has shown a strong link between heart and brain health, so people who maintain a healthy lifestyle are able to lower their risk by eating healthy foods, exercising, limiting their alcohol intake, and not smoking.

What treatments are available?
While there is no cure or effective treatment for Alzheimer’s disease, there are medications that can help to reduce the cognitive decline that people experience as a result of the disease. Researchers are constantly working on better therapies to improve the quality of life for sufferers of this disease.

What are the financial costs of Alzheimer’s disease?
The costs of a disease like Alzheimer’s are substantial and extend far beyond medical treatment to the costs of caring for a person with the disease. Most people with Alzheimer’s will eventually need a full-time caregiver or will have to be admitted to a specialist care facility where they can be cared for on a full-time basis. People can live for many years with Alzheimer’s, which means that these costs may exist and continue to increase for an indefinite period of time.

What financial products are available to help afford the costs of Alzheimer’s disease?
It is important to plan for the future and make sure you have the right financial products in place to ensure that you and your family will be able to afford the medical and lifestyle costs that come with an illness like Alzheimer’s.

It is often too late when you have already become ill to start thinking about these costs. Fortunately, there are products available that can help to cover these costs.

Medical aid coverage can fund healthcare costs, while disability cover can protect your income if you’re unable to work because of Alzheimer’s disease. However, disability products only cover you until retirement age, and their purpose is to replace your income, not to afford extra costs that may arise because of the disease. That’s why critical illness cover is of the utmost importance. This cover exists to fund extra costs that are not covered by your medical aid or disability cover, and you can get cover that you can keep for the whole of your life. With a critical illness pay-out, you can fund some of the costs of hiring a caregiver, of making adjustments to your living space to accommodate your changing needs due to the disabling condition, or the costs of moving from your home to an assisted living facility.

What should you look for when signing up for critical illness cover?
When selecting critical illness cover, it is important to choose a product that covers a comprehensive set of conditions. Some critical illness products in the market only cover certain illnesses, like cancer, strokes, and heart attack, but do not include other life-altering diseases like Alzheimer’s. So, you need to carefully check with your financial adviser what’s covered before signing up for cover.

Other things to check is what claims criteria are used when assessing claims, and what the level of pay-out is. With progressive diseases like Alzheimer’s disease and Parkinson’s disease, some products in the market will only pay out a portion on diagnosis and will only pay out the full insured amount when you have reached a very severe level of disability.

New-generation providers take a more comprehensive approach. BrightRock’s additional expense needs cover provides for over 300 conditions, and pays out 100% of the insured sum on diagnosis for conditions like Alzheimer’s and Parkinson’s. This is because we understand that you may face significant extra expenses long before the reaches the point where you are no longer able to do basic daily tasks by yourself.

A recent BrightRock case study:
A 66-year-old male client was diagnosed with Alzheimer’s disease. BrightRock paid him 126% of his additional expense needs cover amount when we received confirmation that of his diagnosis of by a neurologist. The majority of insurers in South Africa don’t pay out on diagnosis, but rather wait until a client’s condition has deteriorated significantly. Because the client received a pay-out on diagnosis, he was able to better plan for the future and pay for the immediate extra costs he faced. As there are no treatments that can stop or reverse his condition’s progression, although some treatments can improve his symptoms, a delay in paying his claim would not have met his needs.

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