Gen Z in India Favors SIPs and Stocks, While Millennials Prioritize Health and Term Insurance#

Key Findings from the Survey#

• Investment Preferences:
  • Gen Z: 19% invest in SIPs, and 15% in stocks, compared to 14% and 13% of Millennials, respectively. This reflects Gen Z’s risk-tolerant, growth-oriented mindset, driven by digital platforms and financial awareness.
  • Millennials: Prefer stability, with only 14% in SIPs and 13% in stocks, aligning with their focus on long-term financial security.
• Insurance Adoption:
  • Health Insurance: The top insurance product for both groups, with 61% of Gen Z and 63% of Millennials having purchased or considered it. Gen Z shows higher confidence (32% very confident) in understanding health insurance compared to Millennials (67% overall confidence).
  • Term Insurance: Only 19% of Gen Z consider term insurance, compared to 35% of Millennials, who exhibit greater confidence in understanding these products. This suggests Gen Z views life insurance as less immediately relevant.
• Early Adoption Mindset:
  • 78% of Gen Z believe health insurance should be purchased before age 30, and 72% feel the same about term insurance, compared to 44% and 26% of Millennials, respectively. This indicates Gen Z’s proactive approach to financial planning.
• Information Sources:
  • Gen Z relies heavily on YouTube (46%) and generative AI (23%) for insurance research, reflecting their tech-savvy nature. Millennials prefer Google Search (40%). Both groups support teaching insurance in schools (85% Gen Z, 75% Millennials), noting a lack of formal education (50% of respondents).

Broader Context and Trends#

• Financial Literacy and Digital Tools: Gen Z’s investment enthusiasm aligns with a broader trend of younger investors leveraging digital platforms. The World Economic Forum’s 2024 Retail Investor Outlook found 30% of Gen Z start investing in early adulthood, compared to 15% of Millennials, with 41% of both open to AI-driven financial advice.
• Market Dynamics: The Indian stock market saw a surge in young investors, with 40% under 30 as of 2024, per Weekend Investing. SIP contributions have risen, reflecting disciplined investing among Gen Z, who are less likely to exit during market downturns due to increased financial education.
• Economic Challenges: The Economic Times notes that only 50% of young Indians saved in 2025, down from 60% in 2024, highlighting financial pressures. Gen Z’s focus on alternate income streams like freelancing complements their investment habits.

Risks and Opportunities#

• Risks: Gen Z’s lower engagement with term insurance (19% vs. 35% for Millennials) and limited understanding (25% confident) could leave them vulnerable to financial risks in the absence of adequate life coverage. Knowledge gaps in insurance, noted by 50% of respondents lacking school-based education, pose long-term challenges.
• Opportunities: Gen Z’s early investment habits (19% in SIPs, 15% in stocks) and belief in early insurance adoption (78% for health, 72% for term) position them for long-term wealth creation. Digital tools like YouTube and AI can bridge education gaps, while insurers can tailor products to Gen Z’s preferences for accessibility and relevance.

Conclusion#

The 2025 Policybazaar survey highlights a generational divide in India’s financial landscape: Gen Z embraces riskier, growth-focused investments like SIPs and stocks, while Millennials prioritize protective tools like health and term insurance. Despite Gen Z’s confidence in health insurance and early adoption mindset, their lower engagement with term insurance underscores a need for targeted education. Both groups’ reliance on digital platforms and support for school-based insurance education signal opportunities for insurers and financial platforms to foster a more financially secure generation. As India’s youth drive market participation, addressing knowledge gaps will be key to sustaining this momentum.