What kinds of business opportunities will the establishment of a long-term care insurance system bring to banking and insurance institutions?

Ask AI · How will insurance and banking coordination reshape the care-for-the-elderly and wellness services ecosystem?

By: Chen Guowang, Dean of the Banking Research Institute at China Finance

On March 25, 2026, the General Offices of the CPC Central Committee and the State Council issued the “Opinions on Accelerating the Establishment of a Long-Term Care Insurance System,” signaling that China’s long-term care insurance (hereinafter referred to as LTC insurance), after local pilot programs, is moving toward a unified national framework. This is a milestone policy for responding to population aging and improving the social security system.

I. Core Background for Policy Issuance

First, the need to address population aging and the crisis of care for people with disabilities. China has entered a deep aging society. The population aged 60 and above exceeds 310 million. About 35 million older adults are disabled or semi-disabled, and long-term care needs are growing explosively. At the same time, “one person becomes disabled, the whole family becomes unbalanced” has become a common social pain point. Family caregiving burdens are heavy, there is insufficient supply of professional services, and gaps exist in payment ability—making the traditional family-based eldercare model unsustainable.

Second, the strategic need to make up gaps in the social security system. China’s social security system has long lacked a “long-term care” pillar. Medical insurance focuses on medical treatment, and pension insurance focuses on cash benefits, neither covering the life assistance and medical nursing needs after disability. LTC insurance has been positioned as the “sixth insurance,” following retirement, medical, unemployment, work injury, and maternity. It is the core institutional arrangement for improving a multi-tier social security system and implementing the national strategy of actively responding to population aging.

Third, the ten-year pilot experience is mature and suitable for nationwide promotion. Starting in 2016, pilots were conducted in two batches across 49 cities. In total, more than 3.3 million people with disabilities benefited, with more than CNY 100 billion in burden reduction. A financing, assessment, administration, and service model has been formed that can be replicated. The “14th Five-Year Plan” explicitly calls for “promoting long-term care insurance.” All 31 provinces have included it in key government work priorities. Policy consensus and a practical foundation are already in place.

Fourth, the dual need to develop the silver economy and implement people’s livelihood guarantees. Long-term care is a core track of the silver economy. It is expected that by 2035 the silver economy will reach around CNY 3 trillion in scale, and LTC insurance is the “payment engine” to activate the trillion-level care market. Through institutional arrangements, the state converts potential demand into stable payment capacity, addressing the industrial dilemma of “there is demand, but no payment.”

II. Major Significance of Policy Issuance

First, expanding people’s livelihood protection: solving the predicament of disabled families and improving people’s wellbeing. The Opinions specify establishing a basic protection network that covers everyone, coordinates urban and rural areas, and is fair and unified. By the end of 2028, nationwide basic full coverage will be achieved, and the system will provide a safety net from the institutional level for the basic care needs of people with disabilities. It clarifies a baseline premium rate of 0.3%, diversified financing (unit/individual/government/society), and no deductible threshold, significantly easing the financial pressure of family caregiving expenses.

Second, strengthening national strategy: improving the social security system to cope with population aging. This system fills the long-standing blank in social security regarding long-term care, forming a “three-in-one” framework for elderly protection: basic medical insurance + basic pension insurance + LTC insurance. It also enhances the modernization level of national governance. It promotes the transformation of care services from “family responsibility” to a socialized and institutionalized shift led by the government with shared responsibilities.

Third, enabling the industry: activating a trillion-level market and building a care-for-the-elderly and wellness ecosystem. This Opinions inject stable, ongoing payment capacity into industries such as eldercare, nursing, rehabilitation, assistive devices, and digital care, turning potential demand into a rigid market demand. The Opinions also specifies the direction of multi-tier protection—“basic insurance + commercial insurance”—opening up broad development space for market players.

Fourth, improving social governance: optimizing resource allocation and promoting social fairness. The Opinions require unified disability assessment, benefit payment, and service standards, narrowing differences in coverage among urban and rural areas and across regions, and promoting equalization of public services. Meanwhile, it guides social forces to participate in administration and service provision, forming a governance pattern in which the government, the market, and society coordinate with one another.

III. Core Business Opportunities for Banking and Insurance Institutions

(A) Insurance institutions: three core tracks and a trillion-level incremental market

The first track is administration and handling services for policy-based LTC insurance. In terms of the business model, insurance institutions are commissioned by the government to handle the entire process, including application acceptance for LTC insurance, disability assessment, expense review, fund settlement, and service supervision. They can obtain corresponding administration service fees. There are three core values to this service: first, it locks in a vast number of universal insured users (covering employees, residents, retirees, and flexible employment workers) and accumulates core actuarial data on disability status, caregiving, and costs. Second, it builds deep coordination with medical insurance, civil affairs, health authorities, and nursing institutions, seizing the core entry point for care-for-the-elderly and wellness services. Third, central SOE insurers have a clear first-mover advantage, while smaller and mid-sized insurers can break through through deep regional focus and specialized service.

The second track is commercial LTC insurance and supplementary protection. In product innovation directions, LTC insurance is a supplemental layer outside basic insurance, covering areas not covered by basic insurance such as moderate disability, high-end nursing, rehabilitation assistive devices, and home visit services. In terms of form innovation, it can realize combinations such as cash benefits + service provision, converting between life insurance/critical illness insurance and long-term care liability, disability income loss insurance, and nursing service appointment cards. In terms of segmentation by population, it can offer tailored products for older adults, persons with disabilities, chronic disease patients, and working professionals. In terms of policy dividends, regulators have clearly stated to accelerate the development of commercial LTC insurance and support tax incentives, as well as the use of medical insurance personal accounts for purchase, to build a multi-tier protection system.

The third track is integrated care-for-the-elderly and wellness service ecosystem. Insurance institutions can realize a transformation from “selling insurance” to “providing services.” First, build a service network. Through self-operated or jointly built care service networks that integrate home-based, community-based, and institution-based services, provide one-stop services including caregiving, rehabilitation, assistive device rentals, and smart monitoring. Second, leverage data and technology empowerment. Use AI and big data to conduct precise disability assessments, risk early warnings, and service quality monitoring to improve operating efficiency and risk control capabilities. Third, extend the industrial chain. Invest in nursing institutions, rehabilitation hospitals, eldercare communities, and assistive device companies to build a closed-loop ecosystem of “insurance + services + technology.”

(B) Banking institutions: threefold opportunities in capital, accounts, and scenarios

First is fund management and settlement services for LTC insurance. In terms of fund custody, banking institutions can take on custody of LTC insurance special accounts, clearing and settlement, and value preservation and appreciation, earning stable custody fees and returns on retained funds. For premium collection and benefit payments, they can provide end-to-end account services for unit withholding, individual premium payment, and benefit distribution—linking to social security cards/bank cards to increase user stickiness.

Second is the integration of elderly finance and LTC care scenarios. For LTC-focused themes, you can launch composite products such as LTC savings, LTC wealth management products, and pension annuities + LTC coverage to meet residents’ long-term care fund reserve needs. For care-for-the-elderly and wellness scenarios, provide construction loans and operating loans for nursing institutions and eldercare communities; and offer installment plans for caregiving expenses and nursing service consumer loans for families.

Third is comprehensive financial services for the care-for-the-elderly and wellness industry. From a corporate perspective, banking institutions can provide integrated services to nursing institutions, rehabilitation enterprises, and assistive device manufacturers, including settlement, financing, supply chain finance, wealth management, and more. From a retail perspective, around persons with disabilities and their families, provide a package of services such as account management, wealth planning, insurance allocation, and estate arrangements.

© Banking-insurance coordination: building a closed-loop ecosystem of “payments + services + finance”

In product coordination, banks act as distributors of commercial LTC insurance, while insurers provide LTC coverage to bank customers, enabling customer referrals and shared interests. In service coordination, bank branches serve as convenient windows for LTC insurance consultation, applications, and premium payments, while insurers provide on-site assessments and nursing services for bank customers to improve the experience within the scenario. In data coordination, it is possible to share users’ health, eldercare, and financial data to conduct precise marketing, risk control, and product innovation.

In short, for insurers, they should quickly set up policy-based administration and handling services, accumulating data and service capabilities; at the same time, develop commercial supplementary insurance to form a “basic + commercial” dual-engine driving model; and accelerate the construction of care-for-the-elderly and wellness service networks to build differentiated barriers. For banks, they should seize early opportunities in fund custody and account settlement; innovate LTC-themed financial products; and deeply bind with care-for-the-elderly and wellness institutions to provide comprehensive financial services. At the level of banking-insurance coordination, establish a joint working group to jointly develop LTC care scenario products and services, share channels and customers, and capture the commanding heights of the trillion-level market.