Aarav (26) is a designer in Bengaluru and part of the new-age workforce—health-conscious, tech-savvy, and always on the move. He maintains an active lifestyle and keeps up with routine check-ups. But when the early signs of hypertension surfaced, he realised his wellness needs were evolving. With rising medical costs and more focus on preventive care, Aarav opted for a personalised insurance plan that aligned with his lifestyle—one that gave him access to regular consultations, digital tools, and wellness benefits.
Despite being one of the most health-conscious generations, Gen Z in India remains hesitant to invest in health insurance. (Representative Image)
As more young adults like Aarav take charge of their health, they are also realising the importance of planning for the realities of modern healthcare. From preventive screenings to outpatient consultations, real-world medical expenses can quickly stack up. And with India’s healthcare inflation—among the highest in Asia at 13-14% annually—these costs are only rising. India’s urbanisation is accelerating this trend, particularly in metros where quality care often comes with a higher price tag.
For Gen Z living in fast-paced cities, a smart health insurance plan isn’t just about emergencies—it’s about being prepared for every stage of their wellness journey.
Why is Gen Z not buying health insurance?
Despite being one of the most health-conscious generations, Gen Z in India remains hesitant to invest in health insurance. This hesitation isn’t due to lack of awareness—it’s more about alignment.
In fact, 70% of Gen Z feels confident about health insurance, with 32% being very confident—a higher proportion than Millennials at 67%, accordint to a recent Policy Bazar survey. The expectations of the digitally native generation are shaped by experiences that are seamless and hyper-personalised.
Insurance, by nature, is a complex and regulated product. But for younger audiences, even well-designed offerings can feel overwhelming if not communicated in ways that are instantly relatable and easy to act upon. This creates a perception gap—where the value of insurance isn’t questioned, but the process of engaging with it feels distant from their everyday decision-making style.
For the Gen Z, who are digitally native and accustomed to seamless, personalised experiences, health insurance often feels distant. While 52% of Gen Z believes the ideal age to buy health insurance is between 18-25, many struggle to engage with it in a way that resonates with their everyday decision-making style.
Moreover, there’s also a growing belief that wellness routines—regular workouts, meditation, balanced eating—are enough to stay healthy. But modern health risks are shifting. Anxiety, hormonal imbalances, migraines, sedentary stress injuries—these aren’t rare anymore. They are becoming part of everyday life for a generation constantly navigating deadlines, screens, and the pressure to stay ahead. Mental health concerns are also rising sharply—India now bears nearly 15% of the global mental health burden, with young urban populations especially affected.
What Gen Z should expect from their health insurance
For this generation, health isn’t just the absence of illness—it’s an active pursuit. And their health insurance should reflect that mindset.
The Gen Z expects health insurance plans that are built around their lives—not the other way around. That means digital-first access, personalised dashboards, and real-time engagement. From virtual therapy sessions and fitness-linked rewards to easy access to diagnostics, quick reimbursements, the expectation is clear: health insurance must be as seamless and intelligent as the apps they use daily.
Equally important is a shift toward everyday relevance. Today’s plans must extend beyond hospital stays and into daily life—covering mental well-being, preventive check-ups, chronic condition management, and guided wellness journeys. It’s not about volume of benefits—it’s about value that feels real, accessible, and empowering.
How much health insurance should Gen Z get?
Healthcare costs vary widely by location. Someone living in a Tier 2 city may have access to more affordable care but may also face limitations in terms of quality, infrastructure, and specialist availability. In such cases, insurance that covers for treatment in Tier 1 hospitals or reimburses care received outside one’s home city can bridge that access gap.
For instance, ICU charges in Tier 1 cities can exceed ₹30,000 per day—significantly higher than in Tier 2 cities. A common surgery like laparoscopic appendectomy may cost ₹1.5-2 lakh in a metro, compared to ₹70,000-1 lakh elsewhere. As more young professionals migrate to larger cities, the financial risk from hospitalisation is amplified—and a ₹5 lakh cover may barely scratch the surface.
A more realistic starting point today is ₹10–15 lakh, with ₹25–50 lakh (or even ₹1 crore) plans becoming increasingly relevant in urban India. These offer better protection from medical inflation and provide scope for add-ons aligned with modern health needs.
Conclusion
Health insurance isn’t just for sick days—it’s part of living well, every day. For Gen Z, starting early means more than just locking in lower premiums or securing long-term coverage. It’s about choosing a plan that supports their broader well-being—physical, mental, emotional, and financial.
Today’s smartest health insurance plans do more than pay hospital bills. They offer tools that promote preventive care, enable mental health support, reward healthy habits, and integrate seamlessly into daily life. In a world where stress, lifestyle conditions, and digital fatigue are part of the norm, health insurance must evolve from a reactive safety net to a proactive wellness partner.
Anuradha Sriram is chief actuarial officer at Aditya Birla Health Insurance.
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