A recent study by Tata AIA Life Insurance, in collaboration with NielsenIQ, has shed new light on the financial priorities of working Gen Zs in India. Titled “New Age Habits, Traditional Values,” the study explores the evolving investment and insurance behaviours of individuals aged 21 to 28 years. Among its most significant findings, it revealed that term insurance has become the top financial product choice for 31% of Gen Z participants.

Term Insurance Gains Preference for Simplicity and Security

The study surveyed Gen Zs across eight cities, including both metro and non-metro areas, maintaining an equal gender split with an average respondent age of 25. The result: a surprising but significant lean toward term insurance — primarily due to its affordability, clarity, and long-term security benefits.

While Gen Z is known for its digital savviness, this generation is also displaying strong financial prudence, turning to simpler and safer financial instruments. The focus on financial protection over complex investment-linked insurance products highlights a distinct generational shift toward risk mitigation.

Key Findings: Term Insurance as a Go-To Financial Tool

• 31% of respondents plan to buy term insurance, the highest percentage among all insurance products.

• 57% of those interested in term plans are ready to invest more than ₹2,000 per month, reflecting their readiness to commit to long-term protection.

• 1 in 4 Gen Zs prefers bundling term insurance with wealth plans, indicating a rising interest in hybrid insurance solutions.

These insights show that Gen Z is not only financially aware but also deeply focused on balancing protection with wealth accumulation.

Health and Retirement: Rising Concerns Among Gen Zs

Health and retirement also appear on the Gen Z radar:

• A noteworthy 60% of Gen Zs consider health benefits essential while choosing a life insurance plan.

• Interest in retirement planning is also growing, with 18% already thinking about pension and retirement schemes.

Interestingly, the importance of health benefits varies by gender, with 65% of males valuing it more than the 54% of females.

This indicates an overall maturation in financial planning outlook for a generation traditionally perceived as impulsive or short-term oriented.

Trust in Traditional Channels Remains Strong

Despite being born into the digital era, Gen Z still trusts traditional methods when it comes to making important financial decisions:

• 53% prefer buying insurance via agents or bank advisors, showing a strong leaning toward personalised expert advice.

• 25% still turn to social media platforms for financial guidance, suggesting digital influence remains relevant, but not dominant.

This blend of digital consumption and traditional decision-making channels reinforces the idea that Gen Z is pragmatic and thorough when it comes to financial security.

Statement from Tata AIA Life Insurance

Girish J Kalra, Chief Marketing Officer at Tata AIA Life Insurance, noted:

“While Gen Zs are highly digital, they continue to rely on time-tested financial solutions such as term insurance for long-term security.”

This observation underlines how term insurance remains relevant even in a tech-forward world, thanks to its clear value proposition and dependable returns.

Regional and Demographic Coverage of the Study

The research involved respondents from eight Indian cities, with representation from both metros and smaller towns. The gender split was balanced, and the average age was 25 years — providing a comprehensive view of urban Gen Zs in India.

By surveying such a wide cross-section, the findings hold strong relevance for insurers, financial planners, and policy-makers, all of whom need to understand this emerging segment better.

Future Implications for the Insurance Sector

The growing inclination of Gen Zs toward term insurance and retirement planning opens up several avenues for the insurance sector in India:

• Development of customised term plans catering to Gen Z needs

• Increased use of digital education tools to drive awareness

• Enhanced focus on hybrid products that combine protection, health, and investment features

Insurers who can simplify products while maintaining strong customer engagement through both digital and offline channels are likely to see better traction among this generation.

Conclusion

The Tata AIA Life Insurance and NielsenIQ study paints a promising picture of a generation that's ready to take charge of its financial future. As Gen Z moves into more stable earning phases, their commitment to term insurance, health protection, and retirement planning is likely to grow.

This is an important call to action for the financial services industry to restructure offerings, align with Gen Z’s values of simplicity, trust, and long-term vision, and use integrated communication across both traditional and digital channels.

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