Health insurance isn’t enough: The hidden costs of caring for ageing parents decoded
Eldercare expenses rarely appear overnight. They build gradually, often starting with small, manageable needs before turning into larger financial commitments.
For many Indian families, buying health insurance for parents is seen as a critical step in financial planning. It offers protection against large, unexpected hospital bills and provides a sense of security during medical emergencies. But as India’s population ages, a growing reality is becoming harder to ignore: health insurance covers only a small part of the true cost of ageing.
According to Prashanth Reddy, Founder & MD of Anvayaa, health insurance works best during acute medical events such as hospitalisation or surgery, where expenses are sudden and high. However, the support often ends once the hospital stay is over—leaving families to manage a wide range of ongoing, non-hospital costs on their own.
Founded in 2016 by NRI technologist Prashanth Reddy, Anvayaa is India’s first holistic circle of care for elders – rooted in love, dignity, and trust. What started as a pioneering idea has grown into a nationwide ecosystem, today supporting over one lakh elderly families across 40 cities.
Where insurance helps—and where it falls short
Insurance plays a crucial role in reducing the financial shock of medical emergencies. A hospitalisation claim for a condition like a stroke or surgery can save families lakhs of rupees.
But what follows is where the real financial burden often begins.
Post-hospitalisation, elderly parents may require:
- Physiotherapy at home
- Full-time caregivers or attendants
- Regular monitoring and follow-up visits
- Mobility support and home modifications
Reddy explains with the following example:
A parent undergoes hospital treatment for a stroke and the claim is settled. But the next six months may involve physiotherapy at home, a full-time caregiver, safety modifications inside the house, and regular supervision — costs that are usually borne directly by the family. So while health insurance can reduce the financial shock of hospitalisation, it does not remove the broader cost of ageing. That is where many families still remain exposed.
These are long-term, recurring costs, and most of them are either not covered or only partially covered by insurance policies.
In effect, while insurance protects against one-time medical shocks, it does not address the continuity of care, which can stretch for months or even years.
The biggest blind spot: In-home care costs
One of the most underestimated expenses in eldercare is in-home support.
Families typically budget for:
Insurance premiums
Doctor consultations
Medicines
But they often miss the costs that arise when a parent becomes dependent in daily life. These include:
- Nursing or attendant care
- Assistance with daily activities
- Ongoing supervision, especially for conditions like dementia
- Medical consumables and equipment
Over time, these can turn into significant monthly outflows, sometimes rivaling or exceeding hospital costs.
Distance adds another layer of cost
For families where children live in a different city—or even abroad—the challenge becomes more complex.
The cost is no longer just medical. It includes:
Coordinating care remotely
Managing emergencies
Hiring reliable support systems
In such situations, eldercare becomes not just a financial responsibility, but also a logistical and emotional one, often requiring paid coordination services.
Why these costs don’t belong in your emergency fund
A common mistake families make is treating eldercare expenses as one-off emergencies.
In reality, many of these costs are ongoing and predictable once dependency begins.
Using an emergency fund for such expenses can:
Quickly deplete savings meant for other crises
Disrupt overall financial planning
Experts suggest a more structured approach:
- Insurance for hospitalisation
- Emergency fund for unexpected events
- A separate eldercare budget for recurring support
This separation helps maintain financial discipline and ensures that long-term care needs don’t create sudden financial strain.
“Many elder-related expenses are not truly episodic. They may begin with an emergency, but they often convert into recurring monthly costs. If families keep drawing these expenses from a standard emergency fund, they can end up depleting money that was meant for unrelated contingencies. A more workable approach is to separate three things: insurance for hospitalisation, an emergency reserve for unexpected shortfalls or urgent events, and a dedicated eldercare allocation for predictable ongoing support costs,” explained Reddy.
Example: A hospital claim may be covered by insurance, but the parent may then require two months of supervised care at home, regular diagnostics, and paid assistance for daily routines. That is no longer an emergency expense in the strict sense; it becomes part of the household’s care budget.
“Treating eldercare as a separate financial category usually leads to better planning, better cash- flow discipline, and less stress when care needs persist over time,” said Reddy.
When should families start planning?
Most families begin planning only after a crisis—a fall, a diagnosis, or a hospitalisation.
But by then, decisions are often made under pressure.
A better approach is to start earlier, when parents begin showing:
- Chronic health conditions
- Reduced mobility
- Memory-related issues
- Increased dependence in daily routines
These early signals indicate that care needs are evolving—and that financial planning must adapt accordingly.
From reactive to proactive planning
Eldercare expenses rarely appear overnight. They build gradually, often starting with small, manageable needs before turning into larger financial commitments.
Reddy explains with an example: A parent may not need hospital care yet, but may already require frequent monitoring, help with medicines, escorted doctor visits, or some supervision at home. These are early signals that care planning needs to move from informal family support to structured financial preparation. The families that cope better are usually the ones that start planning when support needs are still manageable, not when the system is already under strain.
Ignoring these early-stage costs can lead to financial stress later, when care becomes more intensive.
Families that plan ahead—before the system is under strain—are better equipped to manage both the financial and emotional aspects of caregiving.
In February 2026, Go Digit General Insurance said it has partnered Anvayaa Kin Care, giving policyholders access to elderly care services at preferential rates as insurers look to deepen engagement beyond traditional coverage.
Under the partnership, Digit customers will be able to access a curated eldercare experience package priced at ₹499. The package includes 24×7 medical emergency assistance, an annual consultation with a geriatric specialist, and regular virtual check-ins by a health manager to coordinate appointments and ongoing care for elderly parents. The package also includes 30 monthly virtual sessions focused on senior community engagement.
In addition, policyholders will receive preferential rates across a broader set of services, including companion visits (medical and non-medical), at-home doctor consultations, physiotherapy support, nurse-on-call services, and access to medical equipment rentals.=
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