Plan for ₹10–15 lakh of ring-fenced money per parent, on top of health insurance, and build it in a separate fund so it never eats into your own goals. Medical costs have historically risen around 8% a year, faster than general inflation of about 6%.
For most salaried Indians in their 30s and 40s, parents are the biggest unplanned expense. Insurance for people above 60 is costlier, has waiting periods for pre-existing conditions, and often carries co-pay or sub-limits. Whatever the policy does not pay lands on your cash flow, usually in one lump, usually at the worst time.
At an assumed 8% medical inflation, a cost grows like this:
| Cost today | In 5 years | In 10 years | In 15 years |
|---|---|---|---|
| ₹5 lakh | ~₹7.3 lakh | ~₹10.8 lakh | ~₹15.9 lakh |
| ₹10 lakh | ~₹14.7 lakh | ~₹21.6 lakh | ~₹31.7 lakh |
These are illustrations on an assumption, not forecasts. The point: a hospital bill that looks manageable today roughly doubles in ten years.
A simple rule of thumb: take your parents' expected out-of-pocket medical spend per year, multiply by 3–5, and add one deductible-sized amount. For many families that lands between ₹10 and ₹15 lakh per parent.
Because this money may be needed at short notice, keep it conservative. At an assumed 7% on a debt-leaning mix, building ₹10 lakh in five years needs roughly ₹14,000 a month. If that is too steep, start smaller and step the amount up each year.
The common mistake is to dip into the retirement or child-education SIP when a parent is hospitalised. That quietly breaks two goals to fund a third. Treat parents' care as its own goal with its own SIP and target date, so your other plans stay intact. A goal-based plan, with a separate SIP per goal, makes this visible instead of leaving it as an unwritten promise.
Also check if premiums paid for parents' health insurance qualify for a deduction under current rules, and confirm the limits with a CA.
Q. Should I buy health insurance for my parents or rely on my employer's group cover?
A. Group cover usually covers parents only while you are employed with that company. A personal policy in their name stays with them, so most planners treat group cover as a bonus, not the plan.
Q. What if my parents already have pre-existing conditions?
A. Policies are still available, but with waiting periods and sometimes higher premiums. Disclose everything honestly and compare terms. The cash buffer matters even more in this case.
Q. Should the parents' fund sit in equity?
A. Only if you will not need it for 7+ years. Because a medical emergency can arrive any time, most of this fund is better kept in lower-risk, easily accessible instruments.
Q. How does this fit with my own retirement planning?
A. Count it as a separate goal. Planning it explicitly stops it from silently draining your retirement corpus later.
This is educational content, not personalised advice.
Plan Our Future · AMFI-registered Mutual Fund Distributor (ARN-360754). Mutual Fund investments are subject to market risks, read all scheme related documents carefully.