“I’m taking my daughter to the hospital again,” he said, voice heavy with worry. “Third time this month.” His seven-year-old had been coughing through the night—another respiratory infection triggered by Delhi-NCR’s toxic air.
As I checked my phone, the Air Quality Index flashed 503, a number that now feels like an annual headline rather than an emergency. That call stayed with me, not just as a father, but as someone who works in financial services. Because when we talk about air pollution, we often focus on health. But there’s another crisis unfolding quietly—one that’s eroding Indian households’ financial resilience.
The hidden cost
In September 2025 alone, about 9% of all hospitalisation claims in India were linked to air-pollution-related ailments. Children under ten accounted for 43% of these claims—five times the share of the next largest age group.
Treatment costs for respiratory illnesses rose 11% year-on-year, while cardiac-related hospitalisations increased by 6%. The average claim size stood at around ₹55,000, a substantial burden for many middle-income families in Delhi, where per-capita incomes hover around ₹4.5 lakh a year.
This is the hidden cost of breathing in a city that’s turning toxic. Families aren’t just battling illness; they’re also battling rising healthcare inflation.
A financial lens
This is where the financial lens becomes crucial. As respiratory illnesses rise, insurers are quietly recalibrating risk pools and expanding coverage options that emphasise preventive and long-term health management. The growing demand is for policies that go beyond hospitalisation—covering OPD visits, regular check-ups and wellness support.
In other words, protection is evolving from reactive to proactive. For urban families, especially in Delhi-NCR, a good health plan has quietly become as essential as an air purifier. It’s no longer just about hospital cover; it’s about having a financial shield in a world where even breathing clean air feels like a privilege.
Beyond medical bills
The ripple effects of bad air go far beyond hospital bills.
After Diwali, for instance, health claims typically rise by about 14%. Families spend more on purifiers, N95 masks and recurring doctor visits—expenses that weren’t part of household budgets a decade ago.
These aren’t luxury choices; they’re survival expenses. And beneath it all lies a deeper truth: financial planning today can’t stop at SIPs and savings. It must also protect our ability to live well—to breathe safely, stay healthy and plan without fear. This is where collaboration matters most.
Financial advisors and insurers together can help families not just respond to crises, but build a framework of preparedness—one that protects both health and wealth against the uncertainties of the air we breathe.
A smoggy shift
Crises often bring clarity. And clarity, in turn, inspires change. We’re now seeing a welcome shift: clients, insurers and investors are beginning to think more holistically about the link between environment and finance.
Investors are factoring air quality into their sustainability choices, while insurers are experimenting with wellness-linked rewards for families who prioritise preventive care or maintain healthier living spaces.
The next phase of financial wellness will be climate-conscious—where protection, investment and purpose come together. Because securing the future today means not just building wealth, but safeguarding the world we’ll live that wealth in.
Act before it costs more
Pollution-linked claims have climbed from 6.4% in 2022 to 9% in 2025. The trend is undeniable. If we don’t act now, we risk normalising an economy where every breath carries a cost. But there is hope. Financial institutions can direct capital toward clean energy, urban greening and sustainable housing. Insurance can evolve into a tool for prevention, not just cure. And as individuals, we can make air quality a factor in how we live, invest and insure.
When my friend said, “I’m seriously thinking of moving out of the city,” he echoed what many families feel. But relocation shouldn’t be the only answer. We need collective change—and the financial sector can help lead it. Because when the AQI crosses 400, it’s not just lungs that suffer; it’s household balance sheets too. And unlike smog, financial damage doesn’t clear on its own. It needs awareness, action and innovation.
Sanjiv Bajaj is joint chairman and managing director of BajajCapital Limited. The views expressed are personal.
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