Preliminary Findings on Challenges
Stemming from Dementia

November 2020

Executive Summary Japan is progressing as a super-ageing society, which has led to acontinuous increase in the number of people with dementia.
 Life insurance is characterised by the involvement of many parties. In
order to avoid unnecessary conflicts/disputes among family members,
only the policyholder has the right to perform claim procedures. In
cases where the policyholder develops dementia, such a strict control
sometimes causes inconvenience to the relevant policyholders as wellas those who support the dementia patients.
 The LIAJ will present solutions to address these challenges, which
would include: Building a life insurance policy inquiry system which enables
relevant people to access the details of life insurance policies whena policyholder/insured gets dementia (*);
 Publishing a booklet for consumers to present the ways to address
the issues caused by dementia; and Sharing Japanese life insurers’ various initiatives to utilise digitaltechnology.
(*) The Adult Guardianship System established by the Government allows a selected individual toperform tasks related to property management on behalf of the person requiring assistance.

1

Contents

1. Recognition of the Surrounding Environment(1) Progression of the Super-Ageing Society∙∙∙ P. 3(2) The Increasing Number of Elderly People with
Dementia∙∙∙ P. 4(1) Initiatives for the Elderly∙∙∙ P. 8(2) Initiatives Related to Dementia∙∙∙ P. 11∙∙∙ P. 12

2. Past Measures of the Life Insurance Industry in
Dealing with the Super-Ageing Society

3. Challenges Stemming from Dementia in theLife Insurance Industry

21. Recognition of the Surrounding Environment (1) Progression of theSuper-Ageing Society○ Japan’s elderly population (those aged 65 and over) was around 35.89 million as of October 2019, making
up around 28% of the entire population. The super-ageing society expects to expand even further.
○ The population aged 75 and over continues to rise, and is already greater than the number of people
between the ages of 65 and 74. By 2065, 1 out of every 3.9 citizens is expected to be 75 years old or over.

<Population Estimates and Future Projections>(million)
140

1965
98.28 million

120

ActualPeak - total population

128.06 million in 2010

Aged 19 or under100
36.02 million(36.6%)

Estimates2019
125.77 million

2065
88.08 million

121.01 million(16.7%)

Population ageing rate (percentageof the population aged 65 or over)
28.6% in 2019 (35.92 million)

12.37 million(14.0%)

80
Aged 20-64

68.84 million(54.7%)

41.89 million(47.6%)

60
40

56.08 million(57.1%)
Aged 65-74

20

4.31 million(4.4%)

17.4 million(13.8%)

1.87 million(1.9%)

Aged 75-

18.52 million(14.7%)

11.33 million(12.9%)
Peak - 39.35 million
aged 65- in 2042

22.48 million(25.5%)

Peak - 24.49 million
aged 75- in 2054

(Source) Prepared by the LIAJ based on the “Population Estimates” by the Ministry of Internal Affairs and Communications, and the results of themedium variant projection of the “Population Projections for Japan (2017)” by the National Institute of Population and Social Security Research31. Recognition of the Surrounding Environment (2) The Increasing
Number of Elderly People with Dementia○ The number of people with dementia continues to rise in line with progression of the super-ageing society.
In particular, the prevalence of dementia rises rapidly after the age of 75.

<Future Projection of Elderly People with Dementia>(million)14

1 out of 7
withdementia

1 out of 3
withdementia

1 out of 4
withdementia

Men

12
10

<Prevalence of Dementia by Age Group>

Percentage of the population
with dementia aged 65 and over

Women

8
6
8.30

4

9.53

10.16

11.54

6.31
4.62

2

Aged 65-69 Aged 70-74 Aged 75-79 Aged 80-84 Aged 85-89 Aged 90-94(Source) Prepared by the LIAJ based on the preliminary results from
“Research on the Future Estimation of the Elderly Population with
Dementia in Japan” (Special Research Project for the MHLW Health andLabour Sciences Research Grants of FY2014 by Professor Ninomiya of
Kyushu University) and projected number of people/(rate) with dementia
on the assumption that the prevalence of dementia for each age groupincreases

Aged 95
and over(Source) Prepared by the LIAJ based on the FY2011 summary/sharedresearch report “Incidence Rate of Dementia in the Urban Area, andResponse to Living Functional Disability Caused by Dementia” of theComprehensive Research Project on Measures against Dementia for
the MHLW Health and Labour Sciences Research Grants (Takashi
Asada et al.)4

1. Recognition of the Surrounding Environment (2) The Increasing
Number of Elderly People with Dementia○ The government proposed a basic concept and specific measures regarding dementia with the formulationof the Framework for Promoting Dementia Care.
○ The FSA has considered ways to support customers suffering from deteriorating cognitive abilities.
Challenges stemming from dementia have become widely recognised and interest by society has grown.

<Overview of the Framework for Promoting Dementia Care> (Formulated in June 2019)
Details
Fundamental Concept

Specific Measures

1. Promoting public awareness and efforts
supporting people with dementia by
widely sharing their stories and opinionswith the public

Aiming for a society in which the onset of dementia can be delayed and people can live everyday life with hopeafter developing dementia, and promote measures with inclusion and risk reduction.
-

Promote dementia supporter training among companies and occupational fields and help spread the word ofhope for living with dementia, etc.

2. Risk reduction-

Increase social locations which are easily accessible by the elderly, etc.
Gather and disseminate evidence regarding risk reduction, etc.

3. Medical / care / nursing care services /support for caregivers-

Improve environment for enabling early detection / early response and strengthen cooperative ties.
Promote family support gatherings and peer support activities among families, etc.

4. Promote a barrier-free environment for
dementia / support individuals with earlyonset dementia / support social
interaction-

Create an environment for daily life which is easy to use for individuals with dementia.
Promote various private insurance options related to dementia.
Promote the use of the adult guardianship system, etc.

5. Promoting research and development
conducted by industry and disseminating
their results internationally-

Establish cohorts for swift response to clinical drug trials, etc.

<Overview of the FSA’s “Report by the Working Group on Financial Markets - Toward Progress in Customer-Oriented Business Conduct”>(Released in August 2020)
Ideal way to conduct financial services in a super-ageing society○ Response to customers whose mental capacity have declined.
○ Research ways to tailor services based on given circumstances and determine the mental capacity of individuals using digital technology○ Consider incorporating a system allowing persons other than the individuals themselves to make inquiries regarding financial transactions

5

[Reference] The Adult Guardianship System○ The government established a Master Plan for Promoting the Use of the Adult Guardianship System forlegally supporting people who have lost sufficient mental capacity.
<Outline of the Adult Guardianship System>
Outline of the systems
Legalguardianshipsystem

A system whereby an adult guardian, etc. (adult guardian, curator, assistant) is selected by afamily court to legally support an individual after that person loses the ability to make proper
judgements and decisions

Voluntary
guardianshipsystem

A system in which an individual determines beforehand, while still possessing sufficient mental
capacity, a person to act as his or her voluntary guardian and the details of duties to be
entrusted to that guardian in the future (tasks related to one’s living, property management, etc.)<Master Plan for Promoting the Use of the Adult Guardianship System> (Established in March 2017)
Overview of the master plan
(1) Improvement of systems and their implementation so that users can fully appreciate beneficial results-> Prioritising not only property management but also decision-making support and personal custody-> Medical certificates in which diagnosis details based on the living conditions of the individual can be written(2) Creation of a network for regional cooperation related to support for rights advocacy-> Establishment of functions including (i) publicity for the systems (ii) consultation toward use of the systems(iii) promoting utilisation of the systems (matching) (iv) supporting guardians(3) Balance between prevention of fraudulent use and ease of use-> Consider new measures that provide an alternative to or supplement for legal guardianship support trusts

6[Reference] The Adult Guardianship System<Trend in the number of users of the adult guardianship system>

Adult
guardianship
Curatorship
AssistanceLegal
guardianship

Voluntary
guardianship

Adult
guardianship
Curatorship

2014

2015

2016

2017

2018

2019

December 31

December 31

December 31

December 31

December 31

December 31

December 31,
2014

December 31,
2015

December 31,
2016

December 31,
2017

December 31,
2018

December 31,
2019

149,021

152,681

161,307

165,211

169,583

171,858

25,18927,65530,54932,97035,88438,949Assistance

8,341

8,754

9,234

9,593

10,064

10,983

Voluntary guardianship
Total

2,119
184,670

2,245
191,335

2,461
203,5512,516
210,290

2,611
218,142

2,652
224,442(Source) Compiled by the LIAJ based on the report by the MHLW on the status of implementing measures forpromoting the use of the adult guardianship system (June 2020)7

2. Past Measures of the Life Insurance Industry in Dealing with the SuperAgeing Society (1) Initiatives for the Elderly
Initiatives
by LIAJ○ The LIAJ has chosen serving the elderly as one of the priority action items for realising SDGs and hastaken other initiatives that are related to serving the super-ageing society.
○ It has explored the best way to provide life insurance services in the super-ageing society and has
released reports, recommendations and pamphlets with information for the elderly.

“Life Insurance Services for the Elderly in the Super-Ageing Society - Initiatives toBetter Serve the Elderly -”2013- Summarise the challenges related to serving the elderly when purchasing a life insurance policy,
managing a contract after purchase, and paying an insurance claim, and release a report thatsummarised initiatives taken by life insurance companies which take traits of the elderly into account.

2014

Information pamphlet for the elderly titled “I want to ask now! A guide to life insurance”- A pamphlet with information and points to note for each of the steps in life insurance, from contracting toinsured period, and when claiming and receiving

2017“The Recommendation on Promotion of Friendly Life Insurance Services for the Elderly Recommendation on ‘Utilisation of the Individual Number System in the Private Sector’-”Released the recommendation on the utilisation of “My Number” system as one of the effective measuresthat contributes to the convenience improvement for the elderly.

“Report on the Role of the Life Insurance Industry in the 100-Year Life Era”
2020

- Upon re-acknowledging public concerns in an ageing society called the “100-year life era,” summarise
and announce the role of the life insurance industry that contributes to the elimination of such concerns.

82. Past Measures of the Life Insurance Industry in Dealing with the SuperAgeing Society (1) Initiatives for the Elderly
Initiatives
by LIAJ○ Life insurance companies have drawn up their own guidelines covering the basic concepts and points
to note to provide appropriate and easy-to-understand support for the elderly.
○ We support the PCDA efforts of life insurers by sharing their useful initiatives based on our annual
surveys.

<Guidelines for providing life insurance services to the elderly>- Summarised points and perspectives for enhancing services so that life insurance companies can properly
respond when an elderly customer purchases an insurance policy, makes a contract renewal, and when going
through or requiring such procedures.

<Survey regarding initiatives by life insurance companies carried out in line with their own guidelines (Value Up survey)>

PLAN
ACTION
Review their own guidelines
and operational rules.

Draw up their own guidelines andoperational rules.

CHECK
Good examples of initiatives
are gathered through the Value
Up survey and disseminated.

DO
Provides services based on
their own guidelines and theirown operational rules.

92. Past Measures of the Life Insurance Industry in Dealing with the SuperAgeing Society (1) Initiatives for the Elderly
Initiatives
by Insurers○ Life insurance companies have been promoting various efforts for supporting the elderly.
○ Life insurance companies provide appropriate and sufficient explanation when signing up a customer, withmethods such as requiring attendance by a family member. As support for contract renewal andbefore/during insurance procedures, and appropriate encouragement of insurance claims is carried out.
*The following is a few examples of the various initiatives

Starting thecontract

Attendance by family members- Ask family members to confirm the policyholder’s understanding level.

Set multiple opportunities to meet for insurance sales- Ensuring understanding of contract content, such as having a meeting twice, is made mandatory.

Confirm that products offered contain terms in line with the customer’s intent

Before insurance
procedures
During procedures

Contract
renewalNotification of contract content- Send out a “Notification of Contract Terms” once a year.

Prevent procedural risks and other risks in advance- Register contact information for family members of the policyholder.

Follow up on the status of the policyholder and encourage insurance claims- Regularly check the current situation and whether the policyholder has any insurance claims

Improve ease of procedures- Allow family members to sign documents on behalf of elderly policyholders under certain conditions.

Establish methods for procedures to be made by agents etc.
- Designation of designated proxy applicants, etc.

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2. Past Measures of the Life Insurance Industry in Dealing with the Super-Ageing
Society (2) Initiatives Related to Dementia
Initiatives
by Insurers○ Life insurance companies provide products that cover dementia and mild cognitive impairment (MCI).
○ There is a trend for increasing the variety of services in relation to dementia, such as support for
prevention of dementia as well as for families when the policyholder develops dementia.

<Overview of dementia insurance products (examples)>Rider(i) Insurance payouts for dementia

Main
contract(ii) Insurance payout for mild cognitive impairment

Rider

2 years

Insurance claim
payment against death

Insurance claim
payment against death

Insurance claim payments against hospitalisation and surgery, etc.

Contract

Insurance claim
payment against death

Payment period
End of term (95 years old)(i) Coverage for dementia, an affliction challenging today’s society(ii) Payment of a minimal amount <up to 10% of the amount in (i)> forthe mild cognitive impairment (MCI) stage-> Promote early detection and prevent worsening of the condition byoffering payment at the MCI level<Various services in relation to dementia (examples)>(a) Services for the prevention of dementia○ Provide an app for risk reduction of dementia and tocheck cognitive function- Supporting creating opportunities for early medical
examination○ Screening test for MCI- An advanced medical test for determining the risk of MCI
from a person’s blood(b) Services for families when policyholders become
afflicted with dementia○ Home visits on behalf of the family○ Adult guardianship system support
Handling of referral of judicial scriveners capable ofproviding support in legal procedures(c) Other services○ Assistance in obtaining medical certificates○ Set up a consultation hotline for dementia○ Introduce nursing-related services113. Challenges Stemming from Dementia in the Life Insurance Industry○ Policyholders who become afflicted with dementia are difficult to carry out the procedures. Given
that their family typically support them in such situations, our analysis focuses on requests filed bytheir family to life insurance companies.
○ The LIAJ assumes an increase in the number of cases where the policyholder and his/her family
cannot determine whether a life insurance policy exists (request (i) below). Measures for thissituation are under consideration.
(i) It is unknown whether the family member who has developed dementia is covered by life
insurance○ To check what other issues exist, a survey was conducted by member companies to understand theconcerns that customers expressed in relation to dementia. As a result, we learned that therequests below were frequently received from families of policyholders who were afflicted withdementia.
(ii) Do not know the terms of the life insurance policy held by the family member who has developed
dementia(iii) Want to take over the procedures on behalf of the family member who has developed dementia(such as for insurance claims and changes in name, etc.)*In the future, issues may be added in line with deliberations by the LIAJ and changes in the external environment.

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3. Challenges Stemming from Dementia in the Life Insurance Industry(1)<Request from a Family Member>
I do not know whether the individual who has become afflicted with dementia is coveredby life insuranceE.g.) A case where a family member of an individual who has become afflicted with dementia
contacts the LIAJ to inquire whether that individual has a life insurance policy.

<Current practice of the life insurance industry>- Life insurance companies are working to make regular visits to customers to confirm theexistence of contracts and their terms.
- The LIAJ, since the Great East Japan Earthquake, has established the Center for Searchingfor Life Insurance Contracts in Disaster Areas, and responses can be made to inquiries byfamily members and bereaved families, in an area applicable under the Disaster Relief Act,
about whether a life insurance policy exists for an individual who has become deceased or is
missing.
<Challenges>- Assuming that the number of cases of inquiries similar to the above will rise due to anincreasing number of persons with dementia, it is necessary for the LIAJ’s system forsearching for life insurance contracts to become available during non-disaster times tobe able to check the existence of life insurance contracts when a policyholder/insured
person becomes deceased or suffers a decline in the cognitive ability to makejudgements (already under consideration, information on the next page).
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3. Challenges Stemming from Dementia in the Life Insurance Industry(1)<Outline of the new system>

Inquiry

Inquiry
Inquiry

Response

Response
LIAJ

Inquirer(Do not know whether
family member
is insured)

New system(Non-disaster times)
Facility tocheck theexistence oflife insurance
contracts

If the policyholder/insured is deceasedor
The mental capacity of thepolicyholder/insured person has
deteriorated.

LIAJ members(total of 42 companies)

Current system(Center for Searching for Life Insurance
Contracts in Disaster Areas)
A policyholder/insured has become
deceased or is missing in an area applicable
under the Disaster Relief Act,and contracts cannot be looked for withhomes washed away or burned.

Family members can make inquiries about insurance contracts
even during non-disaster times, including when thepolicyholder’s cognitive function has declined.

143. Challenges Stemming from Dementia in the Life Insurance Industry(2)<Request from a Family Member>
Do not know the details of the life insurance policy held by the individual with dementia

E.g.) A case where a family member learns of an insurance policy for the first time after thepolicyholder becomes afflicted with dementia and contacts the life insurance company toinquire about the terms of the contract.

<Current practice of life insurance companies>- Only the policyholder can receive a response for inquiry regarding the terms of a contract (aninquiry from the insured or beneficiary can be answered within a certain range).
- An inquiry from an adult guardian (voluntary guardian) can also be responded to.

<Challenges>- Consent of the policyholder is required to respond to insurance policy inquiry. However, if thepolicyholder becomes afflicted with dementia, insufficient cognitive abilities may make it
impossible to gain that consent, which will make responding smoothly to inquiries from family
members who are not the insured, beneficiaries, adult guardians, etc. difficult.
153. Challenges Stemming from Dementia in the Life Insurance Industry(3)<Request from a Family Member>
I want to settle procedures on behalf of the family member afflicted with dementia
E.g.) A case where a family member requests to make an insurance claim, or to change thebeneficiary of the insurance payouts after the policyholder becomes afflicted withdementia (there are also requests for cancellation or to change a bank account).

<Current practice of life insurance companies>- It is possible for family members to make claims for insurance payouts by using third-party
claim riders and the designated third-party claim scheme.
- The consent of all heirs presumptive(*) will have to be obtained for change to the beneficiaryof insurance payouts to be performed by anyone other than the policyholder (rigorous
confirmation is required). Adult guardians (voluntary guardians) can complete procedures onbehalf of a policyholder.
(*) If an inheritance were to occur now, the heirs in that instance<Challenges>- Changes to the beneficiary require consent by the policyholder. However, if the policyholder
develops dementia and is unable to provide consent due to reduced mental capacity,
procedures by family members who are not an adult guardian (voluntary guardian) becomecomplicated.
16