When a 42-year-old marketing professional in Pune reviews her monthly expenses, one figure keeps escalating — the cost of caring for her parents. Between her father’s dialysis and her mother’s physiotherapy, she spends more than ₹35,000 every month. Add school fees for her children and a home loan EMI, and her savings are rapidly dwindling.
Her story is not unique.
Millions of Indians in their 30s and 40s are part of the “sandwich generation,” juggling the care of ageing parents while raising children. Yet, in India’s otherwise mature insurance dialogue, there’s a glaring silence: who safeguards the caregiver, and who finances long-term elder care?
A growing challenge
India today has more than 140 million citizens over 60, a figure set to nearly double to 300 million by 2050. This means that soon, every third household will support at least one elderly member. Healthcare costs are rising steadily at 12–15% annually. Unlike a one-off medical event, elder care is prolonged, chronic, and emotionally draining.
Globally, countries such as Japan, Germany, and the Netherlands—where over 25% of the population is above 65—are already facing similar demographic pressures. These nations have crafted innovative insurance solutions, from public–private hybrid schemes to caregiver allowances and subsidised home care. India can study and adapt these models to create scalable, locally relevant solutions.
The financial burden falls squarely on families. Children tap into savings, liquidate investments, or adjust retirement plans. Caregivers—often women—may reduce working hours or take career breaks, affecting household income. The “care economy” is quietly reshaping family finances, presenting a crucial opportunity for insurers to evolve.
Coverage gaps
At present, most families depend on two kinds of coverage: health insurance for medical costs and term insurance for income replacement. While these policies offer critical protection, they don’t fully meet the unique demands of ageing and caregiving. Health insurance typically covers hospitalisation but excludes long-term physiotherapy, assisted living, or at-home nursing care. Term policies safeguard dependents in case of income loss but ignore the income a caregiver sacrifices when stepping back from work.
India now has the chance to imagine products that go beyond hospitalisation, covering home care, assisted living, and chronic conditions. Affordable riders could be integrated into existing health plans to offer long-term elder-care coverage. Global examples provide valuable insights: Japan mandates long-term care insurance for citizens above 40, with contributions pooled nationally to fund home care and nursing facilities. Germany combines mandatory schemes with private supplemental policies to ease family burdens. India could adopt such models to create a mixed public–private framework.
Collaborative solutions
Another avenue for innovation is caregiver income protection. Policies that replace part of a caregiver’s income when they cut back hours or exit the workforce—or employer-linked benefits recognising caregiving as a financial responsibility—could significantly boost household resilience. Public–private partnerships, similar to the Ayushman Bharat expansion in hospital care, can provide scale and reach. Tax incentives for families investing in long-term care insurance would further enhance adoption.
If such solutions are not implemented, families will face financial strain, women’s participation in the workforce could stagnate, and elderly citizens might endure undignified care. But if India acts now—designing innovative products, recognising caregiving as a financial risk, and embedding elder-care solutions into insurance—it could set a global precedent. India could become the first developing nation to create a comprehensive “care economy insurance framework,” protecting both elders and caregivers.
For a country aspiring to be a $10 trillion economy, this is foundational. A secure India is not just one where dreams are insured—it is one where dignity in ageing is guaranteed.
Sanjiv Bajaj, Jt. chairman & MD, BajajCapital
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