A new report from Bajaj Capital reveals a striking dichotomy in India's Gen Z financial behaviour: sophisticated investing paired with inadequate insurance coverage. According to the report, 51% of Gen Z respondents actively invest through mutual funds and systematic investment plans (SIPs), demonstrating strong engagement with equity markets. Yet many have not extended the same discipline to insurance, instead remaining covered under their parents' policies rather than purchasing their own protection.
Investment Expertise, Insurance Apathy
The report, based on a survey of Gen Z respondents, found that digital platforms have made financial information widely accessible. Around 29% of respondents rely on financial applications for information, while 26% follow influencers for guidance. However, the journey often stops before a purchase is made — relatively few convert research into actual insurance policies. Unlike mutual funds, which offer visible returns and a sense of financial progress, insurance is often viewed as valuable only when a claim is made. As a result, many young adults postpone buying personal insurance for five to seven years until they perceive a stronger need.
Hidden Risk Exposure
The report's most striking finding concerns financial vulnerability. Nearly 65% of Gen Z respondents said a single health emergency could push them into financial instability. The remaining 35% believe they are adequately protected through insurance provided by their parents or employers. However, according to the report, the majority remain under-protected, despite growing investment portfolios that may create an impression of financial security. A major health event could significantly disrupt their financial progress.
Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking Ltd, stated, "The data tells us something we suspected but now see clearly: India is insuring itself, but not at the velocity or adequacy the risk environment demands. Young people save aggressively but protect cautiously." He further noted, "Women are financially independent yet dependent on others for insurance decisions. And across all groups, the cost of protection in a real crisis far exceeds what families believe their policies cover."
Emergency Funding Strategies
When asked how they would manage a financial emergency, respondents revealed a range of approaches, many of which could undermine investment portfolios.
| Emergency Funding Source | Percentage of Gen Z Respondents |
|---|---|
| Fixed deposits or savings | 24% |
| Borrow from family | 14% |
| Sell investments (even at a loss) | 9% |
| Take loans | 6% |
The report notes that 24% would rely on fixed deposits or savings, 14% would borrow from family, 9% would sell investments even if it meant unfavourable returns, and 6% would take loans. This reliance on savings or distressed asset sales underscores the lack of a dedicated insurance buffer.
Implications for Corporate Risk Management
For finance executives managing workforce risk and employee benefit costs, the report signals a potential drain on productivity and financial wellness. Nearly two-thirds of young employees could face destabilisation from a single medical event. Corporate treasury and HR departments may need to reassess employer-provided insurance adequacy and consider financial literacy programmes that go beyond investment education to include risk protection. As Naidu observed, "This is not a knowledge crisis. It is a confidence crisis, an autonomy crisis, an advice crisis, and a design crisis. All three are solvable." The report adds that while Gen Z demonstrates strong understanding of investments, market returns and volatility, insurance decisions are more likely influenced by reliance on others and assumptions rather than independent financial planning. For companies with significant Gen Z workforces, bridging this insurance gap could be a strategic priority to safeguard both employee well-being and balance-sheet stability.
Sources:
