Online Reporter
Leigh Masakara
When my grandfather grew old in rural Zimbabwe, he never once set foot in a nursing home. He had 14 children, a large homestead, and a network of grandchildren, nieces, nephews, and neighbours who rotated through his care as he slowed in his final years.
His absence from formal long-term care was not because my family could afford private facilities and chose otherwise. It was because, culturally, sending an elder to a care home would have been viewed as abandonment, even dishonourable. Care was a collective responsibility, embedded in family life and community bonds.
This story is common across much of Africa, Asia, and Latin America, where elder care remains largely informal, unpaid, and family-based. Yet beneath this cultural tradition lies a harsher economic reality. Families are becoming smaller, more urban, and more dispersed. Work commitments, migration, and rising living costs are eroding the ability of families to provide full-time care.
As a result, the burden increasingly falls on women, working-age children, and already stretched households, often at the expense of their own careers, health, and financial security. What once appeared as a moral choice is steadily becoming a structural challenge.
But this is not just an African story. It is a global one.
A world growing old, fast
The world is entering a historic ageing phase. By 2030, one in six people globally will be aged 60 or older, rising to 2.1 billion by 2050. The population aged 65 and above is expected to more than double in the coming decades, with the fastest ageing occurring in East Asia, Europe, and Latin America. Several countries are already becoming “super-aged,” meaning more than 20 percent of their population is over 65, including Japan, Korea, and Germany, with China and Brazil not far behind.
This demographic shift is placing unprecedented strain on public finances. Governments face rising long-term care (LTC) needs alongside growing pension liabilities, while many social protection systems were never designed for such longevity. Only a handful of countries have comprehensive public long-term care financing systems. Most nations still rely heavily on out-of-pocket spending and informal caregiving, leaving millions of families financially vulnerable.
In the United States, the average annual cost of a private room in a nursing home now exceeds US$100 000 in many states. Nearly 70 percent of Americans turning 65 will require some form of long-term care in their lifetime, yet fewer than 10 percent have private LTC insurance. For middle-class households, a prolonged care episode can wipe out decades of savings. For lower-income families, the system effectively becomes two-tiered: private care for those who can pay, and Medicaid-funded care for those who cannot.
Europe faces similar pressures. In the United Kingdom, nearly half of people entering residential care are self-funders, meaning they must cover most of the costs themselves. Each year, tens of thousands of older adults face catastrophic care expenses that erode their lifetime savings. Across the continent, even relatively generous welfare states are grappling with rising demand, workforce shortages in care, and financial sustainability.
The insurance gap at the heart of ageing
Traditional insurance was never built for a world in which people live longer and spend more years in potential frailty. Life insurance historically focused on premature death, not prolonged dependency. Pensions focused on income replacement, not the cost of care. As a result, many ageing societies now face a structural mismatch between what people need in later life and what insurance markets provide.
Yet innovation is emerging.
New models of financing care
Some countries are experimenting with collective approaches to long-term care. Singapore’s CareShield Life program, for example, pools risk across the population to provide lifelong cash payouts to individuals who become severely disabled and require prolonged care. The underlying principle is that long-term care is a shared societal responsibility, not just an individual misfortune.
In China, private insurers are developing hybrid products that combine life insurance, care benefits, and service coordination, linking financing more directly with actual care services rather than simply paying claims.
The UK has also developed annuity-based solutions to address long-term care financing gaps. Immediate Needs Annuities provide guaranteed income to cover care costs for those already requiring care, while Deferred Needs Annuities encourage earlier planning by activating only if care is needed later in life. Despite these innovations, private uptake remains limited, highlighting the scale of the protection gap.
Unlocking housing wealth
Perhaps the most significant untapped resource for funding long-term care is housing. In many developed economies, between 60 percent and 80 percent of adults over 65 own their homes outright, making housing wealth the largest financial asset for many retirees.
Reverse mortgages and equity-release products, which allow seniors to access the value of their homes without selling them, are experiencing a cautious revival. After past concerns around mis-selling, stronger regulation and clearer consumer protections have helped rebuild trust in these products.
When linked to long-term care benefits or guaranteed-care contracts, equity-release solutions can provide a sustainable way for seniors to finance care while remaining in their homes.
Digital innovation reshaping care and insurance
Technology is also transforming how long-term care insurance is designed and delivered. Digital platforms are emerging that integrate care coordination, benefits management, and health monitoring, helping insurers shift toward prevention rather than institutionalisation.
Artificial intelligence is being used to improve risk assessment and pricing, making products more sustainable and affordable. Hybrid life and long-term care policies are gaining traction, offering both death benefits and care payouts, which increases perceived value and encourages uptake.
At the same time, digital planning tools are making financial advice more accessible to middle-income households, helping families navigate complex care decisions before a crisis occurs.
The role of global institutions
International institutions such as the World Bank and the International Finance Corporation (IFC) are increasingly prioritizing ageing, health systems, and insurance market development. They recognize that sustainable long-term care financing is critical not only for social welfare but also for economic stability.
By supporting regulatory reforms, public-private partnerships, and innovative financing mechanisms, these institutions can help countries adopt and scale effective long-term care solutions, particularly in emerging markets where public systems are still developing.
Why this matters
At its core, the global long-term care challenge is about dignity, equity, and fairness between generations. Without reform, millions of older adults risk falling into poverty in their final years, families will continue to bear unsustainable burdens, and governments will struggle under mounting fiscal pressure.
With the right mix of insurance innovation, equity-release financing, digital solutions, and supportive policy frameworks, societies can build systems that allow people to age with security, respect, and independence, whether in Harare, Singapore, London, or Washington, DC.
For me, this is not just a theoretical issue. My experience working on insurance and ageing-related projects, both in the private sector and at the World Bank Group, has shown me how powerful well-designed financial systems can be. When insurance is inclusive, innovative, and human-centred, it can meaningfully improve lives.
The question is no longer whether societies can afford to care for their elders. It is whether we are willing to redesign our systems to do so intelligently.
About the Author
Leigh Masakara is a second-year MBA student at Georgetown University in Washington, DC. He has nearly a decade of experience in insurance underwriting and has built digital and innovative insurance solutions at Old Mutual. He also served as a Consultant at the World Bank Group, working on projects related to insurance product management and sustainable risk financing.
