Gen Z And Term Life Plan: Why Financial Security Is Trending Early

Gen Z is getting serious about financial security and making proactive financial decisions, be it related to insurance or investing.

Young adults in their 20s are increasingly buying term life insurance covers, a product which was once typically reserved for older, family-oriented investors. 

Fuelled by a surge in financial literacy and introduction to digital platforms, Gen Z is now increasingly taking interest in financial matters. As a start, they are also exploring options for insurance, while simultaneously exploring different investment avenues.

Digital Platforms Fuelling Insurance Uprising

The simplified process of buying insurance through digital insurance platforms has made purchasing term life insurance more accessible to Gen Z. 

A study by Turtlemint revealed that 78 per cent of Gen Z insurance advisors conduct most of their business online, highlighting a significant digital transformation in the industry. 

Moreover, the 2023 Insurance Barometer Study by Life Happens and LIMRA found that nearly half of adult Gen Z individuals own life insurance. The findings mention 47 per cent of respondents expressing a need for more coverage. 

Financial Literacy Through Social Media

Social media platforms like TikTok and YouTube have emerged as the main sources of financial education for Gen Z.

Approximately two-thirds of people aged 18-42 years use YouTube for financial information, followed by Instagram, Facebook, and TikTok. 

This trend, known as “FinFluencing”, in which financial advice is provided by financial advisors, has enabled Gen Z to make educated financial decisions. It has also prompted the early adoption of life insurance coverage.

FIRE Concept 

The concept of Financial Independence, Retire Early (FIRE) has gained much traction among Gen Z. 

The concept states that one should aim to retire by age 40 through frugal living and aggressive saving.

The Indian Context: A Digital-First Approach

In India, Gen Z and Millennials are leading the charge in insurance sales, which accounts for 85 per cent of total policy sales made to Gen Z and millennials. 

Insurtech companies are facilitating this shift by offering digital platforms that cater to the changing needs of younger consumers. 

Further, 64 per cent of millennials and Gen Zs in India prefer using social media for their insurance purchase experience, underscoring the importance of a digital-first approach. 

A Paradigm Shift in Financial Planning

Gen Z's early adoption of term life insurance signifies a broader shift in financial planning. By using digital platforms, seeking financial education through social media, and aligning with concepts like FIRE, Gen Z is taking proactive steps toward securing their financial future.

As insurers adapt to meet these evolving needs, the industry is getting ready for continued transformation.