Demographic changes have placed age-related mental health disorders at the forefront of public health challenges over the next three decades worldwide. Within the context of cognitive impairment and neurocognitive disorders among elderly people, the fragmentation of the self is associated with existential suffering, loss of meaning and dignity for the patient, as well as with a significant burden for the caregiver. Psychosocial interventions are part of a person-centered approach to cognitive impairment (including early stage dementia and dementia). Dignity therapy (DT) is a therapeutic intervention that has been shown to be effective in reducing existential distress, mood, and anxiety symptoms and improving dignity in persons with cancer and other terminal conditions in palliative care settings. The aims of this paper were: (i) To briefly summarize key issues and challenges related to care in gerontology considering specifically frail elderly/elderly with cognitive decline and their caregivers; and (ii) to provide a narrative review of the recent knowledge and evidence on DT in the elderly population with cognitive impairment. We searched the electronic data base (CINAHL, SCOPUS, PSycInfo, and PubMed studies) for studies regarding the application of DT in the elderly. Additionally, given the caregiver's role as a custodian of diachronic unity of the cared-for and the need to help caregivers to cope with their own existential distress and anticipatory grief, we also propose a DT-dyadic approach addressing the needs of the family as a whole.