"Life insurance can also play a tremendous role while the insured is still living," says Michele Frey, Vice President of Product and Solutions Marketing for Prudential’s Individual Life Insurance business. (Photo: iStock)

Great financial professionals provide their clients with solutions to meet their needs. They are committed to helping their clients in other ways, too.

“As financial professionals, you are in a unique position to profoundly affect people throughout the course of their lives,” said Robert Pokorski, M.D., Vice President and Medical Director for Prudential’s Individual Life Insurance Division, and a longevity expert. “From the time [clients] are younger and healthier through retirement and senior years, the guidance you provide helps them make informed decisions to see them through.”

And your clients, as they age, will likely experience various chronic illnesses — one of the most common being Alzheimer’s disease.

Here are a few topics to help you guide clients through the financial, mental, and physical effects of Alzheimer’s.

1: The Truth About Chronic Illness

Five in ten people who are age 65 will need chronic illness care later in life, according to the Department of Health and Human Services. And four out of five chronically ill people live at home — not in nursing homes — where family members provide most of their primary care. According to the 2016 Alzheimer’s Association Alzheimer’s Fact and Figures report, caregivers provided nearly 18 billion hours of unpaid assistance in 2015.

2: The Devastation of Alzheimer’s

The numbers on Alzheimer’s specifically are alarming. The Alzheimer’s Association report shows that:

  • 5.1 million Americans 65 or older have been diagnosed with Alzheimer’s.
  • Two-thirds of these are women.
  • Alzheimer’s is the sixth-leading cause of death in the U.S.
  • One in three seniors will die while suffering from Alzheimer’s or some other form of dementia.

3: Would you know if your client has Alzheimer’s?

Alzheimer’s disease is the most common form of dementia. It is characterized by declining memory, language, problem-solving, and other cognitive skills that affect a person’s ability to perform everyday activities.

Clients with Alzheimer’s will likely realize that something is wrong, but they may try to conceal the problem from you. For example, they might answer one of your questions with a question of their own — an attempt to conceal poor memory. In other instances, they may be willing to share their concerns with you and ask for your assistance.

Other signs might include:

  • Forgetting an aspect of their investments that they once knew well.
  • No longer recognizing one of your long-term employees.
  • Problems speaking or writing.
  • Uncharacteristic emails or phone calls.
  • Sudden, out-of-character anger or suspicion.

Dr. Pokorski says the mnemonic ABBCCCJ can help you spot signs of reduced mental or financial capacity in your clients. This stands for difficulties with:

  • Asset and investments
  • Bank statements
  • Bill payments
  • Currency values (confusion while looking at bills and coins)
  • Checkbook management
  • Cash transactions
  • Judgment

It’s important to realize that financial skills are different from financial judgment. For example, if your client is very good with math but says, “The nicest person called me yesterday and wanted me to contribute to their organization, so I gave him my credit card number,” this would show uncharacteristically poor judgment for that client.

4: The Financial Burdens of Alzheimer’s

Besides the mental and physical impact of Alzheimer’s, the disease affects a client’s financial capacity and situation — and that of their loved ones.

The Alzheimer’s Disease Facts and Figures report showed that:

  • The estimated total annual cost for people with Alzheimer’s and other forms of dementia is $226 billion, with roughly $44 billion in out-of-pocket costs.
  • 48 percent of caregivers reported that the expense of caring for a friend or family member with dementia led to spending cutbacks over the previous 12 months.
  • 23 percent reported taking money from their own retirement savings to help pay for dementia-related expenses.
  • Caregivers were 28 percent more likely than non-care contributors to report they ate less or went hungry because they didn’t have enough money to afford proper meals.
  • Within the last five years of life, people with dementia spend an average of 32 percent of their household wealth.
  • Twenty-five percent of care contributors spent more than 10 percent of their annual household income on dementia-related expenses. One in 30 spent more than 90 percent.

5: Use This Checklist to Help Your Clients and Their Families Prepare

“People with mild cognitive impairment or mild Alzheimer’s disease may retain the capacity to designate a trusted person as their financial agent,” said Pokorski. As a financial professional, it is important to have conversations with your clients and obtain their permission to speak with their families if you have concerns about the client’s cognitive abilities.

You can also talk to your clients about creating a document listing the following:

  • Family members
  • Financial professionals
  • Accountant
  • Attorney
  • Physicians
  • Assets
  • Income
  • Bank and investment accounts
  • IRAs
  • Insurance policies
  • Wills
  • Trusts
  • Credit cards
  • Safety deposit boxes
  • Retirement benefits
  • Recurring bills
  • User names and passwords for online accounts

Furthermore, realize that people with diminished mental and financial capacities can be easily taken advantage of financially. Look out for such red flags as claims of missing funds, new people coming in to “help” with finances, or beneficiary changes.

6: Consider how the living benefits of life insurance can help your clients prepare for the possibility of an Alzheimer’s diagnosis

In addition to providing a death benefit, some life insurance products offer riders that can ease future financial burdens for clients who later develop Alzheimer’s, as well as aiding family members.

“It is clear to most people that life insurance offers, first and foremost, a death benefit,” said Michele Frey, Vice President of Product and Solutions Marketing for Prudential’s Individual Life Insurance business. “But what some may not know is that life insurance can also play a tremendous role while the insured is still living. It’s the living benefits that can help your clients be better prepared to deal with life’s challenges that may occur later in life, some of them entirely unexpected.” These can include financial hardships that can come along with a chronic illness like Alzheimer’s.

“Adding a chronic illness rider to a life insurance policy provides clients with an added layer of protection,” said Frey. “The rider provides your clients additional choice and flexibility, particularly at a time when they may not feel as though they have complete control.”

This is where the conversation about life insurance riders comes into play. These can allow your clients to accelerate their policy’s death benefit should they become chronically or terminally ill and meet the terms and conditions of the rider.

This strategy is compelling because the death benefit is there for the client’s beneficiaries. The chronic illness rider also offers the peace of mind that comes with knowing that, should they need financial help due to a chronic illness such as Alzheimer’s, they can accelerate the payout.

Alzheimer’s is a particularly devastating chronic illness that affects not only the patient — your client — but their loved ones, as well. Working closely with your clients and their families can help you determine if life insurance with a chronic illness rider is suitable for them, spot the initial signs of dementia, and prepare clients for possible future financial challenges.

Life insurance is issued by The Prudential Insurance Company of America, Newark, NJ and its affiliates.

Created Exclusively for Financial Professionals. Not for Use with Consumers.