Sandwich generation, with policies you can play it safe

There is a group of people almost never explicitly mentioned in the debate on savings, despite being composed of millions of individuals. It is the so-called 'sandwich generation', that of the 40-50 year olds squeezed simultaneously between supporting their children (for university expenses, rent and precarious work) and their elderly parents (for health or care expenses).

An uncomfortable position, which finds insufficient answers from the public welfare, considering that - according to the Cergas-Sda Bocconi Report released last Wednesday - there are more than 4 million Italians who are not self-sufficient and 7 million family caregivers (ISTAT data) forced to balance work, private life and personal care. While on the children's side the optimisation spaces are more difficult to plan, it is on the parents' side that concrete financial solutions can be implemented, for instance by looking for available tax deductions or by evaluatinginsurance solutions that allow the coverage of care expenses and thus the alleviation of the economic, physical and psychological burden.

On this front, the potential of non-self-sufficiency insurance policies (long term care or Ltc) taken out for an elderly parent, or by the 40-50 year old for himself, as a preventive measure, remains underestimated in Italy. At a relatively low cost, especially if activated in good time, the policy can make the difference between having to liquidate one's savings to pay for an RSA and maintaining a margin of financial security or the acquired standard of living.

The premium of Ltc coverage in fact grows non-linearly with the age at which it is taken out, so a policy taken out at 45 costs a fraction of one taken out at 65 (but few buy it at 45 because the risk seems remote). According to the latest Assindatcolf data, a regularly employed co-habiting carer costs a minimum of 1,758 euro per month, while for an RSA the average monthly fee surveyed in April by Altroconsumo is 2,031 euro, varying according to facility and region: Ltc policies provide annuities that cover part of these costs.

Convenience, as mentioned, is almost always played out at the time of underwriting. On the sample considered in the survey carried out by Il Sole 24 Ore, for example, it emerged that, if a whole-life cover is taken out at 65, the annuity received will on average be almost equivalent to the annual premium (but the advantage depends on the number of years, which cannot be known in advance, over which the insurance company will pay out the annuity). Conversely, underwriting at age 45 would reduce the annual premium to less than half the value of the monthly benefits paid out. This is not a general rule, because the result depends on assumptions about the duration of the annuity receipt, the single or recurring premium, and the chosen annuity level, but it is indicative.