Do Gen Z adults know what a deductible is?

Enjoy complimentary access to top ideas and insights — selected by our editors.

More and more of Gen Z, the generation of people born between 1997 and 2012, are entering the workforce and in need of insurance protection. Members of this group have faced financial strain from high inflation and effects from the pandemic, including limited employment opportunities and increased cost of living, upon entering the labor force. 

More than half, 54%, of Gen Z adults said they feel “overwhelmed or anxious” by just the thought of insurance, according to a survey commissioned by the National Association of Insurance Commissioners (NAIC). The survey, conducted by Atomik Research, includes responses from over 1,000 adults in the United States between the ages of 18 to 27 and reveals a gap in Gen Z’s insurance knowledge. 

Andrew Mais, president of the NAIC and Connecticut insurance commissioner, said in a press release, “There’s a gap in insurance knowledge among Gen Z adults. This is a critical time in their lives, as they are laying the groundwork for their financial futures, and as an insurance regulator, I know how confusing navigating the world of insurance can be. The good news is you don’t have to figure these things out by yourself. There are independent resources to help consumers of all ages and stages of their lives get answers to insurance questions and ensure there are no gaps in their coverage.”

Twenty-two percent of respondents have little or no awareness of the importance of auto insurance, according to the NAIC survey, and 14% for health insurance. Mais shared that some of the survey data was “encouraging” for insurers, like how 61% of respondents pay for their own health insurance and 49% are covered with auto insurance. 

In identifying insurance terms, only 19% could define “out of network” and 27% could correctly do so for “deductible.” The survey also revealed that 36% said they could define what “out of pocket” means and 29% know what a copay is. 

Gen Z adults are more likely to pay for a cell phone protection plan than renters insurance at 35% versus 21%, respectively. 

In a video directed to members of Gen Z, the NAIC shared sources to prepare individuals to become informed consumers. The website describes the different types of insurance coverage, definitions of important insurance terms and the state insurance departments.