More than half of India's Gen Z are actively investing in wealth-creating assets such as mutual funds and SIPs, but many continue to postpone buying personal health insurance, exposing themselves to significant financial risks, according to a new report by BajajCapital Insurance Broking Ltd.

Released on Insurance Awareness Day, the "How Modern India Protects Its Future: India's Health Insurance Reality Report 2026" found that 51% of Gen Z respondents are proactive investors, yet many rely on parental health insurance instead of purchasing independent cover. The report argues that India's health insurance challenge is no longer one of awareness but of action.

Investment-first mindset

According to the study, Gen Z approaches investing with confidence and sophistication. Young adults understand market volatility, regularly invest through mutual funds and SIPs, and make autonomous financial decisions.

However, this confidence does not extend to insurance.

The report found that many young investors assume parental health insurance will continue to provide adequate protection, delaying the purchase of their own policy until later in life. Instead of viewing health insurance as an immediate financial necessity, many consider it a future purchase that can wait until their 30s or after major life events such as marriage.

"The barrier is activation, not awareness," the report noted, adding that insurance is consistently deprioritised despite widespread understanding of its importance.

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Research without action

The report also highlights a disconnect between how Gen Z researches insurance and how they ultimately behave.

Nearly 29% of respondents use financial apps to learn about insurance, while 26% follow influencers for financial guidance. However, this information gathering rarely translates into purchasing a policy.

According to the report, the buying journey stalls after research because insurance lacks the immediate gratification associated with investments. Unlike mutual funds, where returns are visible and trackable, insurance delivers value only when a claim arises, making it feel less urgent.

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One medical emergency away from instability

The consequences of delaying insurance could be severe.

The report found that 65% of Gen Z respondents are one major medical emergency away from financial instability. While 35% believe they are protected through parental or employer-sponsored coverage, the remaining respondents would need to rely on savings, borrow from family, liquidate investments or take loans if faced with a serious health crisis.

Researchers warn that this creates a false sense of security, particularly among young professionals who appear financially strong because of their investment portfolios but lack adequate health protection.

Metric                                     Key finding

• Gen Z who actively invest    51% invest in mutual funds and SIPs
• Health insurance behaviour    Many delay buying independent health insurance and rely on parental cover
• Biggest issue    Insurance has an "activation problem," not an awareness problem
• Primary reason for delay    Insurance is viewed as a purchase for the 30s rather than an immediate need
• Research channels    29% use financial apps; 26% follow influencers for insurance information
• Purchase conversion    High research, but low conversion into policy purchases
• Financial vulnerability    65% are one major medical emergency away from financial instability
• Emergency fallback    Many would depend on savings, family support, loans or selling investments
• Industry concern    Young investors are wealth creators but remain underinsured
• Report recommendation    Make insurance buying simpler, improve digital journeys and encourage earlier protection

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Need for behavioural change

The report argues that India's insurance industry must move beyond simply creating awareness and instead focus on encouraging timely action.

It recommends simpler digital buying journeys tailored to younger consumers, better communication around insurance adequacy and more frequent policy reviews.

Commenting on the findings, Venkatesh Naidu, CEO, BajajCapital Insurance Broking Ltd., said India is witnessing a protection gap despite rising financial awareness.

"The data tells us something we suspected but now see clearly: Young people save aggressively but protect cautiously," he said, adding that the challenge is "not a knowledge crisis" but a combination of confidence, behavioural and product design issues.

The nationwide study, based on responses from more than 1,000 participants, concludes that India's next phase of health insurance growth will depend not on selling more policies, but on ensuring young consumers purchase adequate protection before a medical emergency disrupts their financial future.

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Published on: Jun 27, 2026 1:23 PM IST