Why Insurance is Essential for Gen Z's Financial Planning

Published By: Economic Times Now ​

Published Date: 26-05-2022

The COVID-19 pandemic delivered a stark wake-up call to young adults who previously considered themselves immune to serious health risks. This eye-opening experience revealed how a deadly virus can strike anyone regardless of age, often bringing overwhelming treatment costs that can derail financial stability for years to come.

Today's young generation faces growing health challenges from multiple fronts - lifestyle diseases, pollution-related ailments and climate change impacts. While the pandemic sparked increased insurance adoption among 25-35 year-olds, Generation Z needs to prioritise health insurance within their financial planning strategy from the earliest stages of their careers. Many young professionals make the mistake of relying solely on employer-provided health coverage, typically offering modest protection of Rs. 3-5 lakh. This approach overlooks two critical realities: the rapidly rising cost of healthcare and the possibility of multiple family members requiring treatment simultaneously. Furthermore, career transitions are common in early professional life-changing jobs and taking breaks or facing unemployment can leave you completely unprotected when employer coverage ends.

Starting insurance early provides significant advantages beyond immediate protection. Premiums remain substantially lower when policies begin at younger ages, saving considerable money over a lifetime. Additionally, health insurance serves as an effective tax-saving instrument, allowing deductions up to Rs. 50,000 under Section 80D for covering yourself and family members, with additional benefits available when insuring senior citizen parents.

With health risks in India increasing at an alarming pace among all age groups, securing comprehensive insurance coverage early isn't merely prudent—it's crucial for guaranteeing access to high-quality healthcare and financial security throughout life.