Baloo the bear is wrinkly, old and suffering from Alzheimer's, because he's not remembering everyone he met anymore, except for Mowgli. At one stage in his life, he was a dancing bear in a circus, which made his previous teenage life suck hard.
'My teenaged life sucked hard, when I was a dancing bear at a circus. It's because the whippers are disgusting to me and the conditions are pretty terrible as well.', the bear growls in a sad manner.
As Baloo is dying, his fur is rotting away. Days later, he has become a darn generic carcass himself. Without doubt, he is now dead!