Why Gen Z Buys Health Insurance But Skips Term Plans
Policybazaar data shows 61% of Gen Z have bought or considered health insurance, but only 19% term. What the psychology behind the gap means for brands.
The insurance category has spent decades selling responsibility. The old script—family, future, fine print—worked when life milestones arrived early and predictably. For Gen Z, those milestones are moving. That is changing which products feel urgent and which get postponed.
The Health Door Is Already Open
Gen Z’s supposed aversion to insurance is not showing up in the health category. In Policybazaar’s 2025 survey of 4,620 Indians, 61 per cent of Gen Z had bought or considered health insurance. Term insurance was far less compelling at 19 per cent.
Nitin Khanna, chief marketing officer at Acko, pushes back on the idea that this group simply does not care: “I don’t think Gen Z cares less; look at how seriously they take their health.” Post-Covid, hospital costs have become visible and personal. Ahmed Aftab Naqvi, co-founder of Gozoop Group, adds that “Gen Z has watched hospital bills wreck families post-Covid, so the need doesn’t need explaining.”
That is why health insurers are moving beyond hospitalisation into telemedicine, wellness, preventive checks and digital health tools. The product is being reframed as everyday maintenance, not emergency protection.
Discovery Is Now a Trust-Verification Game
The bigger shift may be in how young buyers evaluate insurance. Agents and family still influence decisions, but digital validation has arrived. The same survey found 23 per cent of Gen Z had used AI for insurance research, and YouTube was the preferred research channel at 46 per cent.
Tanya Marwah, head of marketing at Digit Insurance, says the difference is not what they evaluate but how. They still compare prices, features and value. “They’re using technology to verify trust.”
For brands, that means creators, short-form explainers and user-generated content are no longer add-ons. Naqvi estimates that brands which used to allocate 20–30 per cent of consumer budgets to digital now routinely put 50–70 per cent or more into campaigns for younger audiences.
- Health cover feels present and personal, so it converts sooner.
- Term cover is still pitched around dependents and distant milestones.
- Digital content acts as the trust layer that agents once provided.
Why Term Insurance Gets Deferred
Marriage, children and dependents—the classic triggers for term cover—are happening later. Working Gen Zs are more immediately focused on careers, financial independence and supporting parents. A Tata AIA-NielsenIQ 2025 study found roughly one in three working Gen Zs planned to buy term insurance.
Himanshu Walia, chief marketing officer at Star Health Insurance, frames the gap clearly: “Gen Z sees health insurance as relevant to their own lives today, whereas term insurance is fundamentally associated with protecting dependents against a future financial loss.”
Pritika Shah, head of marketing at HDFC Life, notes that curiosity has improved but buying tends to be deferred because purchase is tied to life-stage milestones.
This is a classic temporal discounting problem. A near-term, concrete benefit beats a distant, abstract one. The message should make the future feel closer.
The Reframe: Independence, Not Death
Naqvi’s suggested fix is simple in principle: “The real fix is reframing it around financial independence and protecting future choices, not death.” That shifts term insurance from a product for dependents to a product for your future self.
The practical translation for marketers is to talk about income protection, optionality and not being a burden—not mortality. The same audience that researches on YouTube and verifies through AI will respond when the promise is autonomy, not obligation.
Source: ETBrandEquity.com
