- Life Insurance Plans for Gen Z
- Benefits Offered
- Mistakes to Avoid
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Updated on Jun 30, 2025 8 min read
Understanding Life Insurance For Gen Z
Generation Z is the age group of individuals who are born between 1997 and 2012. This generation is young, smart, and plays a vital role in shaping the future of our economy. According to a Nasscom report, by 2030, Gen Z will be half of India’s total population. But somewhere, they fail to determine the potential financial risks for their future. To safeguard their financial future, a good life insurance policy is an ideal choice. A life insurance policy offers financial protection to their loved ones in case something unfortunate happens to them. As per a survey, 32% of Indian Gen Z prefer savings over spending. Most trusted life insurance companies are launching insurance plans that are simple, easy to manage, and offer instant customer support targeted towards today’s Gen Z customers.
This article provides a complete breakdown of the importance of life insurance plans for Gen Z, along with the best life insurance plans for them. If you are a Gen Z, this article is a must-read to ensure you can take the first step towards financial planning and independence.
Why is Life Insurance Important for Gen Z?
A life insurance policy is the best tool that ensures that your family can live a comfortable lifestyle even if you are not with them. Moreover, it also helps you build wealth over a period so that you can fulfil your financial goals. We have provided a list of points that highlight the importance of a life insurance plan for Gen Z.
Financial Protection of Loved Ones
A term life insurance plan offers financial protection to your loved ones in case of your unfortunate death during the policy tenure. The insurance company will pay a sum assured chosen by you to your family in your absence so that they can lead a comfortable life. According to a data report by The Times of India, India recorded 474 deaths per day in 2023, approximately 1.73 lakhs per year, due to accidents. The numbers are quite shocking but true. Having the right life insurance policy in place ensures your family is financially taken care of even in your absence.Affordable Premiums
The premiums of a life insurance plan are affordable if you buy it at a young age. As age increases, the premiums of a life insurance plan also increase. The premiums for a 20-year-old non-smoker for the Axis Max Smart Term Plan Plus are Rs 700/- per month, while for a 30-year-old non-smoker, the premiums would be Rs 1,163/- per month. Delaying the life insurance policy by 10 years results in an approximate increase of premiums by 49%. That’s why it’s better to buy a policy when you are young, so that you can save on premiums.Wealth Creation
Life insurance plans such as ULIPs, savings plans, and investment plans help policyholders create wealth over a period. These plans offer a return on your investment based on market conditions. The corpus generated helps you plan your retirement and fulfil your financial goals. As per a study by Kantar, Gen Z in India is building financial habits earlier than their previous generations. 73% of the Gen Z respondents are saving at least 30% of their income. As financial habits are changing, life insurance plans such as ULIPs, saving plans are an ideal tool that offers financial safety along with wealth creation.Coverage Against Debt
Gen Z usually takes various debts to cover their expenses, such as an education loan, a vehicle loan, a home loan, etc. A life insurance plan ensures that the loan taken by you does not become a burden for your family members in the future. The loans taken by Gen Z are at an all-time high. Approximately 40% of Gen Z in India have done unsustainable borrowing, with an average borrower holding six loans totalling Rs 5.6 lakhs. Having a life insurance plan for Gen Z has become important due to rising loan adoption.Tax Benefits
The premiums paid for your life insurance policy are eligible for tax deductions under Section 80 (C) of the Income Tax Act, 1961. Moreover, the death benefits received are also tax-free under Section 10 (10D). Tax is one of the topics that Gen Z finds boring and difficult to understand. To make it easily understandable, you can refer to the life insurance tax benefits.Peace of Mind
Buying a life insurance policy offers peace of mind so that you can focus on your career, knowing that your family is financially covered even in your absence.Tool for Financial Planning
A life insurance policy is a first step towards financial planning for Gen Z. Creating the right financial plan ensures that you can lead a worry-free retirement life, knowing that your finances are covered.
Best Term Life Insurance Plans for Gen Z
We have provided a list of life insurance plans that you can consider buying if you are a Gen Z. To calculate the premiums for your life insurance policy, you can use the PolicyX Insurance Premium Calculator.
| Plan Name | Type of Life Insurance Plan | Entry Age | Maturity Age | Policy Tenure | Unique Features |
| Axis Max Smart Term Plan Plus | Term Insurance | 18 to 65 years | 100 years | Minimum- 5 years Maximum- 82 years |
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| ICICI Pru iProtect Super Term Plan | Term Insurance | 18 to 55 years | 85 years | Minimum- 20 years Maximum- 85 minus entry age |
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| Tata AIA Sampoorna Raksha Promise | Term Insurance | 18 to 65 years | 100 years | Minimum- 1 year Maximum- 84 years |
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| SBI Smart Platina Assure | ULIP | 18 to 50 years | 65 years | Minimum- 12 years Maximum- 15 years |
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| HDFC ProGrowth Plus | ULIP | 14 to 65 years | 75 years | Minimum- 10 years Maximum- 30 years |
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| HDFC Life Sanchay Plus | Investment Plan | 5 to 60 years | 80 years | Minimum- 6 years Maximum- 20 years |
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| PNB MetLife Guaranteed Savings Plan | Investment Plan | 3 to 60 years | 80 years | Minimum- 10 years Maximum- 20 years |
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Why Gen Z is Embracing Life Insurance?
Gen Z is embracing life insurance in today’s fast-paced world due to a change in mindset towards financial planning and security. There are various reasons due to which Gen Z is embracing the need for a life insurance policy.
Increasing Financial Awareness
There has been a gradual increase in financial awareness, especially due to social media platforms, leading to a change in people’s mindset towards financial security. The famous ad campaign by LIC- ‘Zindagi ke sath bhi, Zindagi ke baad bhi’ has influenced many people to buy an insurance policy.Understanding the Need for Financial Planning
Gen Z is understanding the need for financial planning to safeguard their future. They are understanding their financial obligations and choosing the right financial tools that can help them fulfil them.Increasing Digital Platforms
Earlier, one had to visit the branch office of the insurer to buy a life insurance policy. Digitalisation has allowed individuals to get a life insurance policy in a few clicks from anywhere in the world. The document verification and underwriting processes can also be completed online. 83% of Gen Z prefer a digital-first approach towards financial services, as per a report by EY. It showcases a major shift in their financial behaviour and the adoption of digitalisation in the insurance sector.Launch of Tailored Life Insurance Plans
The insurance companies are launching life insurance plans that are budget-friendly and tailored to fulfil their needs and financial goals. This is one of the major reasons for Gen Z adopting life insurance plans.Financial Security of Dependents
Gen Z is opting for financial tools such as term insurance plans to ensure that their family can live a hassle-free life even in their absence. According to a study conducted by Tata AIA Life Insurance, 31% of Gen Z respondents prefer a term insurance plan over other life insurance products. More than 57% of Gen Z are willing to spend approximately Rs 2000 for a term insurance policy of Rs 1 crore.
Mistakes Gen Z Should Avoid When Buying Life Insurance
There are certain mistakes that Gen Z should avoid when buying a life insurance policy to ensure they get the best life insurance plan. Let’s understand these mistakes in detail.
Not Comparing Various Life Insurance Plans
Gen Z often makes the mistake of not comparing various life insurance plans. It’s better to compare various policies before buying one so that you can make the best choice.<Choosing Inappropriate Coverage
Buying a life insurance policy with an inappropriate coverage amount is one of the most common mistakes made by Gen Z. An ideal coverage amount should be 10 to 15 times their annual income. Moreover, the coverage you choose depends on several factors, including lifestyle costs, financial goals, etc.Not Understanding the Policy Documents
Many policyholders make the mistake of not understanding their policy documents, which can lead to trouble at the time of claim processing. It’s important to understand your policy documents to ensure that you do not face any troubles in the future.Choosing Unnecessary Riders
Choosing unnecessary riders with your life insurance policy costs you additional premiums. It is one of the major mistakes by the policyholders. You must opt for riders that align with your needs.Providing False Information
Providing misleading or false information to the insurance company while buying a life insurance plan can lead to policy cancellation and claim rejection in the future. Be true to your insurance company at the time of buying the policy. Providing false information to your insurer is one of the most common reasons for claim rejection in India. Approximately 50% of the life insurance claims are rejected by the insurance companies due to false information provided by the policyholder at the time of policy purchase.
Conclusion
Life insurance is an ideal tool for Gen Z to safeguard their loved ones and create wealth over time. We have provided a list of life insurance plans that Gen Z can consider buying to secure their future. Buying a term insurance plan early in life provides peace of mind and affordable premiums. There are various types of life insurance plans, such as term insurance, ULIPs, investment plans, etc, and you can choose the one that aligns with your needs.
If you are still wondering about which life insurance plan is best, you can contact our Xpert Advisors at PolicyX.com.
We offer No Spam, No Gimmicks, and Only Expert Insurance Guidance.
Life Insurance for Gen Z: FAQs
1. Will Gen Z choose insurance plans in the future?
Yes, the adoption rate of life insurance plans is increasing among Gen Z, as per a recent study conducted by Insurance Xperts at PolicyX.com.
2. Is life insurance a smart investment for Gen Z?
Yes, a life insurance policy is a smart investment for Gen Z to secure their future financially.
3. What does Gen Z think about insurance?
Gen Z wants insurance policies that are simple and easy to understand.
4. Does Gen Z need riders or just term cover?
A term insurance is a must buy for Gen Z. Choosing additional riders with it is a personal choice. Riders provide added protection and benefits to policyholders at a minimum additional premium.
5. Is group life insurance at work enough for Gen Z?
No, group life insurance has various disadvantages, including low coverage, lack of customisation options, etc. It’s better to buy an individual life insurance policy.
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Written By: Himanshu Kumar
Himanshu is a seasoned content writer specializing in keeping readers engaged with the insurance industry, term and life insurance developments, etc. With an experience of 2 years in insurance and HR tech, Himanshu simplifies the insurance information and it is completely visible in his content pieces. He believes in making the content understandable to any common man.
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