‘That’s when I realised how expensive treatment can get’: Why more young Indians are buying insurance

Among young professionals, conversations about cashless claims and term plans are slowly replacing ones about weekend plans. What used to be a parental afterthought and met with glazed eyes is now an adulting milestone, right up there with investing in a mattress more expensive than the bed frame, bought with your hard-earned money.

According to a 2015 report by NatHealth, 70 per cent of the Indian population had no health insurance, and out of those aged 24 to 30, around 75 per cent relied solely on employer-provided coverage.

Ask a 28-year-old today, and you’ll likely hear: “I’m getting a separate health cover this year. My company’s policy won’t cut it.” Data proves it too. A March 2025 survey by Bajaj Allianz Life Insurance, conducted with NielsenIQ, found that the average age at which Indians are buying life insurance for the first time has dropped from 33 to 28. The study sees this as a positive trend, suggesting that younger people are becoming more aware of the need for financial protection and are taking action earlier in life.

And while insurance might not be the most thrilling dinner-table topic, knowing how much you need, when to get it, and what to avoid? That’s the kind of adulting flex we should all be aiming for. (Source: Freepik)

How personal experience is driving financial decisions

This newfound curiosity isn’t random. It’s driven by lived experiences: rising treatment costs, unpredictable job markets, pandemic trauma, and a wider awareness of how fragile stability can be. Indians in their mid to late 20s and early 30s are taking insurance seriously –– not just as an afterthought, not as a tax hack, but as a solid layer of protection for themselves, their families and their peace of mind.

For Elena Amolik, 25, the insurance journey began in a hospital ward. “I was admitted for malaria while interning with a wealth management firm in 2019. That’s when I realised how expensive treatment can get,” she told indianexpress.com. The jargon was initially intimidating, but with some help, she chose a plan that made sense. “There’s peace of mind in knowing you’re covered.”

She also said that while her peers mostly relied on corporate health covers, that trend is starting to shift: “Only recently have my friends started buying personal health policies.”

For Amey Desai, 31, a marketing professional, insurance is about stability. “I see it as a safety net for my family. Working in this sector gave me an inside view; insurance is not about making money, it’s about protecting it.” He’s wary of insurance-linked investment products, which often promise more than they deliver. “The key is understanding your needs and reading the fine print, not just going for the most advertised policy.”

He’s not alone in making this distinction. Many older Gen Z and millennials now understand that insurance and investment should be kept separate.

Young professionals in India are increasingly buying personal health and life insurance in their 20s and 30s (Source: Freepik)

How much life insurance do you actually need?

This is one of the most common questions people ask — and the answer isn’t “as much as you can afford.”

Santosh Joseph, CEO of Germinate Investor Services, said, “Life insurance is generally calculated as 10 to 15 times your annual income.”

If you’re earning Rs 10 lakh annually, you should ideally be insured for Rs 1 to Rs 1.5 crore. However, you must also consider what your dependents will need if you’re not around. “Too little means your family isn’t protected. Too much, and you might be paying unnecessarily high premiums,” he said.

Gauri Mehta, CFA and chief growth officer at Basic Financial Services, advised against opting for whole-life term policies (till age 90/100), unless you really need them. “The longer the term, the higher your premium. If you believe your assets will cover your family after 60, there’s no need to stretch the policy beyond that.”

Can you switch insurance providers later?

It might sound like a newbie question, but it’s actually very relevant. The answer is yes, at least in the case of health insurance.

“Health policies in India are portable. If you’ve been with one insurer for a few years and want to move to another with better features or service, you can do that at renewal. Even the waiting period benefits can be carried over,” said Santosh.

Life insurance, however, is not portable. If you want better coverage or newer pricing, you must buy a new policy. And given how insurers have become more competitive lately, it’s sometimes worth it. “Do a fresh comparison every four to five years. Your income and family needs will likely have changed by then anyway,” Santosh said.

So how do you choose the right plan? (Express File)

Why corporate insurance isn’t enough

Many young professionals assume their company policy will protect them –– until they read the fine print.

“Employer-provided insurance usually covers only you and sometimes your spouse,” said Santosh. “There’s often a co-pay for family members, and the coverage limits can be inadequate.” Worse, you lose the cover when you quit.

That’s why Santosh and Gauri recommend getting a separate, personally-paid health policy as early as possible. “The younger and healthier you are, the cheaper and more comprehensive your coverage. You can lock in lower premiums for life,” said Gauri.

Gauri also said that young buyers “should prioritise comprehensive health insurance that includes no room rent caps, critical illness riders, and fast claim settlements.”

What to look for in a good policy

So how do you choose the right plan? Both experts suggest a checklist:

✅ For life insurance:

• Go for a pure term plan
• Ensure the sum assured covers at least 10–15x your income
• Add accidental death and critical illness riders if needed

✅ For health insurance:

• Choose a plan with no cap on hospital room/ICU costs
• Look for sum insured reinstatement features
• Check waiting periods, cashless hospital network, and claim settlement ratios
• A good No Claim Bonus and customer service record are essential

“The claim process is just as important as the policy itself,” Gauri said. “You don’t want to be stranded with paperwork while someone’s in a hospital bed.”

Young Indians are moving towards consciousness, from simply being covered to becoming active participants in protecting their futures. This generational shift is about ownership more than financial literacy.

And if that means asking “noob” questions, all the better. Because when it comes to insurance, ignorance is far more expensive than curiosity.