Gen Z Show Increased Interest In Term, Plan, Pension For Long-Term Security And Early Retirement, Says Report

Gen Z is giving more importance to term insurance in their financial planning.

A recent report by Tata AIA Life Insurance with NielsenIQ has revealed that Gen Z is paying more attention to protection, and consequently giving due importance to term insurance for long-term financial security, affordability, and ease.

The report titled New Age Habits, Traditional Values: Gen Z's Approach to Financial Planning, questioned working Gen Z people aged 21-28 and gathered crucial insights of their financial goals. The report uncovered three key areas where Gen Z is focusing on their financial efforts.

Term Insurance as a Key Focus

Term insurance is the most preferred choice for life cover among Gen Z among all available insurance policies, the report revealed.

According to the report, 31 per cent of respondents plan to get term insurance. Additionally, 1 in 4 or 25 per cent respondents prefer a combination of term insurance and wealth-building options, reflecting an evolving financial approach.

Further, 57 per cent of those intending to buy term insurance are willing to spend over Rs 2,000 per month, showing a higher commitment compared to current policyholders in the same group, the report said.

Increasing Interest in Early Retirement

Gen Z is also showing a keen interest in early retirement, with 18 per cent of respondents already thinking about retirement and pension plans, This marks a shift from the more traditional approach taken by previous generations, according to the report.

The report suggests that the growing interest in early retirement is an indication that many Gen Z individuals are incorporating long-term financial planning into their current strategies.

Health and Wellness Considerations in Insurance Choices

Health and wellness features are two aspects that Gen Z factor in while selecting life insurance, the report said.

According to the report, 60 per cent of Gen Z respondents prioritise physical health benefits when choosing a life insurance provider. In terms of ratio, 65 per cent of male Gen Z individuals tend to place more emphasis on wellness benefits compared to 54 per cent of female Gen Z individuals, the report said.

Digital Trust Factor

Despite their heavy use of digital tools, Gen Z continues to rely on traditional methods for financial advice.

The report said that 53 per cent of respondents preferred consulting with agents or bank advisors for their insurance purchases. Elsewhere, 25 per cent of Gen Z individuals sought financial guidance from digital creators and influencers on social media, it added.