Priya, 24, for instance, checks her crypto portfolio three times a day and hasn’t missed a systematic investment plan (SIP) payment in 18 months. Yet when asked about her health insurance, she looked unsure. “It’s there, but I’m not sure what it really means for me,” she said.
This isn’t apathy, it’s a wake-up call for all of us in the industry to make insurance as clear, convenient, and relevant as the rest of Gen Z’s financial life.
Gen Zers and millennials now drive nearly 85% of all insurance purchases. Yet, despite their financial literacy and digital comfort, India’s insurance penetration remains modest, at 3.7% of the gross domestic product (GDP) in 2023-24 (3.2% for life insurance, 1% for non-life insurance). Out of 1% non-life, health insurance accounted for roughly 0.42% of India’s GDP. The opportunity is clear: the challenge isn’t awareness, it’s relevance.
For most young professionals, their first exposure to insurance is through corporate health plans. While still valuable, these plans can feel limited if tied to a single employer, especially when job loyalty averages just 18 to 24 months. Corporate insurance remains an important pillar, but evolving towards modular, portable group policies, including mental health services, wellness reimbursements, and family inclusivity, can enhance continuity of protection while helping employers stay competitive.
The best time to buy personal health insurance is early, around 23 to 25 years, when one is healthy, premiums are lowest, and coverage is easiest to secure. Starting early helps manage future costs driven by lifestyle risks, like stress, smoking, or sedentary habits. In doing so, insurance shifts from being reactive to becoming a confidence tool for financial planning.
Changing demands
Affordability is improving. The September 2025 goods and services tax (GST) exemption on individual health premiums reduces costs by nearly 18%, lowering a ₹6,000- ₹8,000 policy to around ₹4,920-6,560. Combined with the Insurance Regulatory and Development Authority of India’s (Irdai) “Use and File” framework for faster product approvals, India’s insurance ecosystem is increasingly positioned for innovation at scale.
Technology is central to this evolution. Gen Zers expect every transaction, investing, shopping, or renting, to be instant and mobile-first. Insurance can match that expectation. AI-powered platforms now allow users to compare quotes, customize coverage, and process claims within minutes. From video-based claim verification to WhatsApp-assisted policy management, insurance can now be as intuitive as online banking.
But digital access alone isn’t enough; relevance and trust matter the most. Today’s young adults navigate new definitions of family, work, and wellness. Standard policies that cap mental health coverage or do not recognize live-in or same-sex partners can leave gaps. Modular insurance addresses this: a base plan with optional add-ons, mental health therapy, maternity or fertility care, dental or vision cover, even pet protection, mirrors the flexibility this generation already expects from their subscriptions and memberships.
Transparency is equally important. Gen Zers value clarity in pricing. Insurtech platforms now explain premiums based on age, BMI, lifestyle, and occupational risk, with dynamic pricing soon linked to healthy habits tracked via wearable devices. Making insurance explainable, fair, and participative strengthens trust and engagement.
Wellness programmes are evolving, too. Token discounts for check-ups or non-smoking are giving way to rewards that resonate more—cashback for fitness goals, therapy reimbursements, or nutrition counselling. Insurers are shifting from reactive coverage to proactive health enablement, supporting wellness rather than simply responding to crises.
Gen Zers aren’t rejecting insurance; they’re encouraging it to evolve alongside them. They seek the same values they expect from every other financial service: clarity, customization, and respect. When insurance aligns with these principles, it stops being a grudge purchase and becomes a confidence tool that enables people to live the lives they envision.
The question isn’t whether they need insurance. It’s whether the industry is ready to design it for the world they’re already building.
Views are personal.
The author is the founder and CEO of CoverSure.
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