Why should gen Z care about Term Insurance in 2026?

You got your first salary. Maybe you upgraded your phone, started paying rent, booked that trip you have been planning for months, or finally stopped asking your parents before every online purchase. Insurance probably was not part of that milestone. When you are in your 20s, things like retirement and Life Insurance can feel like problems for a much older version of you.

But there is one question worth asking: If your income stopped tomorrow, who would have to deal with the financial impact? Maybe your parents depend on you, you are helping with a sibling’s education, or you are paying off a Loan. Even if no one depends on you today, your responsibilities may grow as your career progresses. That is where Term Insurance becomes relevant: protecting the people who may depend on your income if you are no longer around.

So, what would Term Insurance actually do for Gen Z?

Think of Term Insurance as a financial backup for the people who depend on you. It is a Life Insurance Plan that provides cover for a fixed period. You pay a premium, and if you pass away during the policy term, the policy's death benefit is paid to your nominee, subject to the policy terms and conditions. That money can help your family manage financial commitments such as Loans, education expenses, or regular household expenses without having to figure everything out at once.

Why does 2026 feel like a good year for Gen Z to get Term Insurance?

Two things make it worth considering getting Term Insurance in 2026:

1. Zero GST on Term Insurance premiums: Individual Life Insurance Policy premiums, including Term Plans, have been exempt from GST since 22 September 2025, following the 56th GST Council meeting. Earlier, an 18% tax sat on top of every premium. Now you pay closer to the base amount, which matters more when you are optimising a starter salary.
2. Gen Z is already investing: You are not waiting until 40 to start thinking about money. A recent Gen Z study found that 72% of Gen Z respondents invest up to half of what they save*. If you are already actively investing to build wealth, protecting that wealth with Term Insurance is a conversation worth having.

*Source: https://economictimes.indiatimes.com/news/company/corporate-trends/young-digital-and-debt-averse-gen-zs-new-money-mantra/articleshow/121107123.cms?from=mdr&utm_source=chatgpt.com

How much life cover does a Gen Z earner actually need?

There is no single right number, but a useful starting point is your Human Life Value (HLV). Here is the simple math:

HLV = (Your Income × No. of Years You Expect to Keep Earning) − Existing Savings/Existing Cover

Also look at:

• Your income: What do you earn today? How might your income grow?
• Your liabilities: Do you have an Education or Personal Loan, or other outstanding debt?
• Your dependents: Does anyone rely on your income, either fully or partially?
• Your future plans: Are you planning to support your parents, pursue higher education, start a business or take on a major financial commitment?
• Your existing savings and life cover: What resources would your family already have if you were no longer around?

You can use a Term Insurance calculator to get a starting estimate. And do not assume the number has to stay the same forever. Your cover may need to change as your salary, Loans, family responsibilities, and lifestyle change. To review your cover, you can use the DIME formula.

What makes Term Insurance more affordable for Gen Z right now?

This is probably the biggest advantage you have right now. When you are younger, you are generally likely to have fewer health complications than you might have later in life. Since age and health are among the factors considered while determining Term Insurance premiums, buying earlier can potentially help you secure cover at a lower premium, subject to underwriting.

You may not have much to protect yourself yet. But you have a lot of earning years ahead of you. That future earning capacity is one reason life cover can become relevant even before you have a house, children or a large investment portfolio. Remember, the longer you wait, the more your circumstances can change. Your income may rise, your responsibilities may increase, and your health profile may change.

What mistakes should Gen Z avoid when buying a first Term Plan?

The most common one is treating the whole exercise like a checkbox. Picking whatever sum assured looks "standard" and moving on.  A few others worth watching for:

• Choosing a low premium over adequate cover just because it fits this month's budget
• Skipping riders like critical illness cover because they feel unnecessary at 24
• Not disclosing lifestyle habits, like smoking, accurately, which can affect a future claim
• Assuming Group Life Insurance from your employer is enough. If you change jobs, take a career break or leave the workforce, that employer-provided cover may not continue with you.
• Waiting for "real adulting" life stage to start that keeps quietly getting pushed back

Which Term Insurance Plan is suitable for Gen Z?

You are already thinking about your income, savings, and what you want to do next. So why not explore a Term Plan that can keep up as your responsibilities change? The ABSLI Super Term Plan offers different coverage options, along with optional features that you can explore based on your needs. Along with a life cover, you get:

• Health management services when you want to stay on top of your health
• Critical Illness Rider for added protection against specified critical illnesses
• Waiver of Premium Rider to waive off future premiums if the applicable conditions are met

You can review the plan details or check your own premium and buy the plan online, before deciding whether it fits your situation.

What if you are still not sure you need Term Insurance?

If you are 23 and your biggest monthly financial decision is whether to order food or cook, a Life Insurance Policy can feel like overplanning. But look beyond today. Your salary may grow. Your parents may depend more on you. You may take a Loan, start a business, get married, or have children. Your financial responsibilities can change significantly over the next decade. You do not have to predict exactly what your life will look like.

You just need to ask: If something happened to me, would someone else have to pick up my financial responsibilities? If the answer is yes, Term Insurance is worth considering.

Also Read

Term Insurance For Millennials

Term Insurance Guide For Young Professionals

Reasons Why You Need Term Insurance In College

Benefits Of Buying Term Insurance Plan At An Early Age

How Much Term Insurance Do I Need