July 2025 | 937 words | 4-minute read
A study undertaken by Tata AIA and NielsenIQ and published in May this year, reveals that this relatively young earning class is rooted in rationality when it comes to insurance.
While three out of five Gen Z identified building an emergency fund, saving for retirement, and setting aside money for significant purchases, as current short-term goals, every second Gen Z respondent prioritised long-term objectives such as ensuring adequate retirement savings, achieving financial independence, and planning for their children’s education expenses.
“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, Tata AIA Life Insurance. With a focus on financial protection, health and wellness, and early retirement planning, Gen Zs are actively preparing for their future.”
The study — which interviewed working Gen Zs between 21 and 29 years of age, in New Delhi, Mumbai, Bengaluru, Kolkata, Hyderabad, Pune, Jaipur and Patna — was undertaken by Tata AIA to help the company develop and implement strategies that would deepen engagement with Gen Z, by tailoring products to their specific preferences, and sharpening communication that would resonate with this increasingly significant demographic. The study produced a goldmine of information.
Enduring motives
Like with generations before them, financial security for the family, long-term savings and investment opportunities continue to be the primary motivators for purchasing or considering purchase of a life insurance policy. While long-term savings were an important factor for both male and female Gen Zs, women also highlighted the need for coverage for critical illnesses as an important motivator, whereas men were more focused on gaining investment opportunities. Either way, it emerged that Gen Z was keen on insurance products that combined security with robust savings and investment features.
Stable choices
Financial investments skew towards safe options as far as Gen Zs are concerned. The study found that they currently own bank fixed deposits/recurring deposits, stocks/shares and gold (a trend more predominant among Gen Zs in metros), and are inclined to opt for life insurance — specifically term insurance and savings plans — for future investments. A deeper analysis revealed that while men were more inclined towards stocks/shares, mutual funds and real estate, almost every third woman owned government bonds, thus demonstrating that women opted for safer investments. Overall, however, it was evident that Gen Z leans towards traditional assets and is increasingly cognisant of long-term financial security and risk management.
Evolving priorities
Every third member of Gen Z prefers buying term insurance closely followed by savings plans. While term plans fulfill their need for financial security and affordable risk protection, savings plans are a suitable conduit for structured long-term financial planning, to achieve their goals of retirement savings, financial independence and emergency funds.
Upping the ante
Nearly half of those surveyed said they were willing to spend over Rs 2,000 per month on life insurance, with males more likely to do so (45% vs 33% for females), showing greater intent than current Gen Z policyholders.
According to Tata AIA, the willingness of those intending to purchase term insurance at higher amounts indicates a strong aspirational value associated with life insurance.
Digital divide
Gen Z may be digital natives, scrolling, clicking and swiping for almost everything in their lives, but when it comes to insurance, they still rely on traditional methods of purchase. Offline platforms lead life insurance purchases among Gen Z, representing 56% of ownership, while online platforms account for 44%, though rather interestingly, women showed an equal split, highlighting a more balanced adoption of digital platforms compared to men.
Men relied more on bank representatives and agents for life insurance needs, with 57% intending to purchase from agents versus 49% of women. However, the script is switched when it comes to financial advice. While overall, Gen Z’s financial decision-making is heavily influenced by social media, financial blogs, and influencer-driven content, this is more so the case for men, while most women (28%) cite advice from banks or financial institutions as their primary source of Information.
Barriers to investment
If currently, not enough Gen Zs are purchasing life insurance, blame it on complex and communication and intimidating fine print. Nearly 60% of those surveyed, highlighted a lack of understanding as the primary barrier, though additionally, 55% of Gen Z women cited a lack of trust in insurance companies, compared to 38% of men. Gen Z men were more concerned with high premiums (55%).
So, what does Gen Z want?
The top three requirements for Gen Z are affordability, tax-saving benefits, and a focus on physical health for a life insurance brand. Men prioritise physical health more (65% vs 54% women), while every second Gen Z residing in a metro emphasised the importance of a transparent and hassle-free claims process.
Gen Zs seek a balance of financial practicality and health-oriented benefits in life insurance. Gen Zs in metros favour tax-saving features (especially in the west of the country) and a transparent claims process, whereas those in non-metros focused more on health-related benefits (particularly in the east) and preventive care. For those in the north and south, affordability was the primary factor.
The study produced several insights that insurers can leverage to maximise opportunities. For instance, the need for tailored communications to counter barriers to purchase, to reach women who are increasingly confident about online purchases and most significantly, to design premium offerings that appeal to Gen Z’s concerns regarding affordability while fulfilling their long-term savings ambitions.
—Anuradha Anupkumar
