Gen Z Eyes Insurance Young, Leans on Gen AI; Millennials Still Steer Term Plans

A fresh wave of confidence is sweeping across India’s insurance landscape, and this time it is coming from the younger generation.

Policybazaar’s new survey, released on National Insurance Awareness Day 2025, gives a generational snapshot of how Indians are thinking about and interacting with insurance. The findings are telling: Gen Z, those aged between 18 and 28, are stepping into the insurance space with surprising clarity and confidence, especially when it comes to health coverage.

Millennials, on the other hand, are still more comfortable with term life policies, perhaps a reflection of their life stage, financial burdens, and longer-term responsibilities.

The pan-India survey, which covers 4,620 respondents, highlights an emerging generational divide, not just in their interest but in approach as well.

Health Insurance: Gen Z Knows Their Ground

As per the findings of this survey, Gen Z, the younger of the two groups, reported more confidence in understanding health insurance. A solid 70 pre cent of Gen Z respondents said they felt confident about how health plans work, and 32 per cent were “very confident.” This is slightly ahead of Millennials, 67 per cent of whom expressed similar confidence.

While these may seem like marginal differences, the trend points to early exposure. Gen Z is not waiting to “grow up” to make health insurance decisions. Whether shaped by the pandemic or the avalanche of digital content that breaks financial topics into digestible reels and shorts, younger Indians appear to be building their financial muscle earlier.

Term Insurance: Still the Millennial Zone

When it comes to term insurance, however, the trend flips. Only 25 per cent of Gen Z said they were very confident in understanding term plans, compared to 45 per cent of Millennials. The gap likely stems from life experience. Millennials, many of whom are now managing dependents, EMIs, or long-term financial planning, seem more attuned to the purpose of term cover, a fallback against income disruption or untimely death.

Even in terms of consideration, while both groups show high intent for health insurance (61 per cent of Gen Z and 63 per cent of Millennials), the interest in term insurance among Gen Z stands at just 19 per cent. For Millennials, it is nearly double at 35 per cent.

Gen Z Thinks Ahead, Acts Early

Perhaps the most eye-opening shift is in timing. A majority of Gen Z respondents (52 per cent) say that the ideal age to buy health insurance is between 18 and 25. And 45 per cent also believed term insurance should be bought within the same age range. Compare that to just 22 per cent and 26 per cent of Millennials saying the same, and the generational shift is clear.

Gen Z is clearly not waiting to get married, have kids, or buy a house to get insured. They are already seeing insurance as a foundational financial decision, not a milestone-dependent one.

A Digital-First Journey With a GenAI Twist

Both generations are digital-first in their insurance research, but they use the web differently. YouTube is the go-to for 46 per cent of Gen Z, showing their strong preference for video explainers and influencer content. Millennials, on the other hand, prefer a more traditional path as 40 per cent of them rely on Google search.

What’s new this year is the emergence of GenAI tools wherein 23 per cent of Gen Z are already using generative AI for research. It is not yet mainstream, but it points to where things are heading. The insurance journey, from search to signup, is increasingly happening online, on personal terms, and at a growing pace.

Insurance in the Investment Mix

While SIPs and stocks still dominate Gen Z's portfolio, insurance is no longer a forgotten pillar. For Gen Z, insurance now ranks just behind equities and gold, suggesting a shift in mindset where protection is becoming a financial asset.

Among Millennials, health and term insurance rank just as high as gold, 14 per cent each, reflecting their growing interest in value protection and secure returns.

One Missing Link: Schools

One place that is not keeping pace with this shift is the education system. Nearly half of all respondents said they were not taught personal finance or insurance in school. Yet, 85 per cent of Gen Z and 75 per cent of Millennials said it is important. It is a clear gap, young people are figuring things out on their own, often digitally, but still without foundational exposure in the classroom.

Industry’s Next Move?

Sarbvir Singh, Joint Group CEO at PB Fintech, notes that the trend marks a turning point: “What stands out for us is that the new-age consumer is digitally fluent and financially aware in ways we didn’t see earlier... As insurance becomes an early decision, the ask from the industry is to build products that make insurance more relevant and relatable.”

And that may be the real takeaway from this survey. Young Indians are not insurance-averse, rather they are showing up to be early starters, digital-first, and research-driven cohorts who seem to be ready to act without waiting for a life event to prompt the decision.

For an industry long used to pitching insurance to the older and the anxious, that might be the wake-up call it needs.