Jeanne is right. You can't believe how UTIs can make elderly people unhinged. If its a sudden thing, that's the likely culprit. Antibiotics will knock it out fast,
First, have him checked for a possible UTI. Beieve it or not, that is a common cause of hallucinations in elders. Fortunately it is fairly easily treated. The first step is to take him to see his doctor.
Is your FIL showing any other signs of dementia? You say he has been deterioraing -- in what ways? Is his doctor aware of these changes?
Meanwhile, try not to argue about what he sees, or try to disprove it. If the hallucination is happy, go along with it. If it is frightening or upsetting hm, solve the problem for him. He sees bats flying around the family room? Get a broom and chase them out.
Is your FIL showing any other signs of dementia? You say he has been deterioraing -- in what ways? Is his doctor aware of these changes?
Meanwhile, try not to argue about what he sees, or try to disprove it. If the hallucination is happy, go along with it. If it is frightening or upsetting hm, solve the problem for him. He sees bats flying around the family room? Get a broom and chase them out.
Do call his doctor, though, first thing tomorrow.