Gen Z India embraces term insurance as bedrock of financial security

By Gloria Methri

In a striking shift from stereotypes, India’s working Gen Z population is proving to be more financially prudent than expected. A new study by Tata AIA Life Insurance reveals that individuals aged 21–28 are increasingly prioritising term insurance as the foundation of their financial wellness, outpacing other life insurance products and even savings-led options.

Titled “New Age Habits, Traditional Values: Gen Z’s Approach to Financial Planning”, the study highlights how this tech-savvy generation is redefining financial security by blending digital convenience with long-term protection.

Term Insurance: A Surprising Favourite Among Gen Zs

The report finds that term insurance is the top financial priority among Gen Z respondents, despite its perception as a conservative, low-return product.

• 31% of working Gen Zs intend to purchase a term plan, the highest across all life insurance categories surveyed.
• A quarter of them prefer a Term + Wealth combination, seeking both protection and savings under one umbrella.
• Interestingly, 57% of Gen Z intenders are willing to invest over ₹2,000 per month, demonstrating a more substantial commitment than even current policyholders in this age bracket.

“Our research underscores some vital insights: while Gen Zs are highly digital, they continue to rely on time-tested financial solutions such as term insurance for long-term security,” said Girish J Kalra, Chief Marketing Officer at Tata AIA Life Insurance.

Retirement Planning Begins Early for the F.I.R.E. Generation

India’s Gen Z is also showing early signs of long-term thinking, with many aligning themselves with the F.I.R.E. movement (Financial Independence, Retire Early).

• 18% of respondents are already considering retirement or pension plans, marking a notable departure from the delayed planning approach seen in older generations.
• This trend highlights a growing desire to balance short-term goals with financial independence in the long run.

Wellness is Wealth: Health Benefits Drive Insurance Choices

When it comes to selecting insurance providers, Gen Zs are placing strong emphasis on physical and mental well-being.

• 60% of Gen Z respondents cite health and wellness benefits as a key consideration.
• Male respondents (65%) prioritise wellness more than female respondents (54%), underlining a nuanced gender perspective in financial product preferences.

Despite being digital natives, Gen Zs still heavily rely on traditional advisory channels for financial decisions.

• 53% rely on insurance agents or bank advisors when purchasing life insurance.
• Yet, a growing 25% turn to social media and online influencers for financial advice, highlighting the increasing role of digital content creators in shaping money habits.

This balance of trust-based consultation and digital discovery paints a picture of a generation that’s both curious and cautious, combining the best of both worlds.

Redefining Financial Planning in India

While they may be the youngest earners in India’s workforce, Gen Zs are proving to be mature financial planners, adopting insurance early, planning for retirement, and demanding wellness-integrated products.

“With a focus on financial protection, health and wellness, and early retirement planning, Gen Zs are actively preparing for their future,” added Kalra. “At Tata AIA, we are committed to providing tech-enabled, accessible insurance solutions that meet the evolving needs of this forward-thinking generation.”

Far from being impulsive spenders, India’s Gen Z is charting a new path, anchoring their financial future in term insurance, embracing early planning, and seeking holistic well-being. This cohort may swipe and scroll their way through life, but when it comes to protection, they are grounded in values that signal long-term thinking.