Not FDs Or LICs: Here’s Where Gen Z Is Actually Investing Their Money

 A new financial reality is emerging in India, and it’s being shaped by the country’s youngest working adults—Gen Z.

According to Policybazaar’s latest pan-India survey released on Insurance Awareness Day 2025, Gen Z is not only embracing insurance earlier than previous generations but is also bringing tech-savviness and a proactive mindset into the mix.

With 4,620 respondents from across India, the survey offers a close look at how insurance preferences differ between Gen Z (ages 18–28) and Millennials (ages 29+), showing a clear generational shift in priorities, tools, and timing.

1. Health Insurance Tops Gen Z’s Priority List
In a surprising twist, the younger Gen Z respondents displayed greater confidence in understanding health insurance than Millennials.
70% of Gen Z said they are confident about health insurance, with 32% feeling very confident.
In contrast, 67% of Millennials expressed overall confidence.

This early familiarity indicates that the younger generation is no longer seeing insurance as a "later-in-life" decision. Instead, Gen Z is recognizing healthcare planning as an essential and urgent part of their financial strategy, possibly influenced by pandemic-era realities and rising medical costs.

2. Term Insurance: A Millennial Stronghold
While Gen Z leads in health insurance confidence, term insurance still resonates more with older adults.
Only 25% of Gen Z reported feeling very confident about term insurance.
Among Millennials, that figure was nearly double at 45%.

This difference is likely tied to life-stage responsibilities—Millennials are more likely to have dependents, home loans, and long-term obligations that naturally steer them towards term insurance as a protective measure.

3. Insurance as a Rising Investment Tool
Insurance is becoming a core financial asset for Gen Z, ranking just behind SIPs, stocks, and gold. Even newer categories like cryptocurrency find space in their portfolios, albeit with lower preference.

For Millennials, health insurance and gold each account for 14% of investment preferences, highlighting their inclination towards value protection and tangible security. Gen Z’s inclusion of insurance in their early investment mix indicates a shift from viewing it as a “safety net” to a fundamental component of wealth planning.

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4. The Early Bird Advantage: Gen Z Leads on Timing
One of the most notable findings from the survey is how Gen Z perceives the ideal age to buy insurance:
52% of Gen Z believes health insurance should be bought between the ages of 18–25.

45% say the same about term insurance.

Compare that to Millennials—only 22% and 26% of them agree on early buying for health and term plans, respectively. Clearly, the younger generation isn’t waiting for marriage, parenthood, or home ownership to kickstart their protection journey.

“Gen Z is not waiting for life-stage milestones to prioritise protection,” the report notes, citing influences like post-pandemic awareness and digital financial education.
 

5. Tech-First Approach: From YouTube to Gen AI
The way consumers research insurance is undergoing a digital revolution, and Gen Z is leading it.
46% of Gen Z prefer YouTube for researching insurance, signalling a preference for explainer and short-form content.
40% of Millennials still rely on Google search for insurance queries.
Notably, 23% of Gen Z is now using Generative AI tools to research insurance, showcasing their adaptability to emerging technology.

The common thread? Both generations are adopting digital-first behaviours—right from exploring plans to finalising purchases—making insurance a self-led and technology-driven experience.

6. The Industry Must Evolve to Meet New Expectations
The rise of Gen Z as proactive, tech-savvy insurance consumers is not just a trend—it’s a wake-up call for the industry. With higher expectations around speed, transparency, and personalization, insurance players need to reimagine how they engage with this emerging audience.

“What stands out for us is that the new-age consumer is digitally fluent and financially aware in ways we didn’t see earlier,” said Sarbvir Singh, Joint Group CEO, PB Fintech.

“Their willingness to consider insurance early, seek clarity through modern tools like GenAI, and act before they hit traditional life milestones speaks volumes about a mindset shift. As insurance becomes an early decision, the ask from the industry is to build products that make insurance more relevant and relatable.”

Singh adds that insurers must “lead with content that explains, platforms that guide, and products that fit neatly into their criteria.”

Insurance Is No Longer Just for the Responsible—It’s for the Ready
Gen Z’s assertive stance on early insurance adoption is changing the game. From watching YouTube videos to consulting Gen AI, they are using every tool at their disposal to make informed decisions. For Indian insurers, this means rethinking communication, accessibility, and policy design to keep up with a generation that’s not just future-ready—they’re already there.