Nithin Kamath, co-founder of Zerodha, has issued a strong critique of continued investor reliance on ULIPs and endowment plans, despite years of expert warnings. According to reports from LiveMint and The Economic Times, Kamath highlighted on X that these products continue to sell aggressively even after repeated warnings from financial experts, educators and the media. "When it comes to personal finance, people somehow keep making the same mistakes over and over again. There's very little creativity in the mistakes people make," Kamath stated on X. He emphasized that ULIPs are "usually a bad idea" and endowment policies are "usually a bad idea," yet sales continue to grow despite widespread awareness campaigns.
As reported by LiveMint and The Economic Times, Kamath argued that the issue is no longer lack of information access, but rather poor decision-making despite available resources. "Even a cursory Google search will tell you the problem. And today, in 2026, you can just ask ChatGPT or Claude whether a product is a good idea, and they'll usually show you the math," he stated. Investors today can compare returns, check policy charges and use AI tools to understand product structures before investing. However, many continue choosing products that often deliver lower long-term returns compared to simpler investment options such as mutual funds combined with pure-term insurance.
According to LiveMint and The Economic Times reports, the primary concern with ULIPs and endowment products lies in their structure, which combines insurance protection and investment returns into one product. Financial planners have long argued that this reduces transparency, increases charges and limits flexibility. In many cases, investors may end up earning lower returns while also remaining underinsured. The products often deliver lower long-term returns compared to simpler investment options such as mutual funds combined with pure-term insurance. Kamath noted that "bundled products are easier to scrutinize, making poor choices harder to excuse."
While Kamath was sharply critical of investment-linked insurance products, he acknowledged that health insurance remains a more complicated area for ordinary investors. As reported by LiveMint and The Economic Times, unlike ULIPs, health insurance policies involve technical conditions such as waiting periods, exclusions, co-pay clauses and room-rent caps that are difficult for many buyers to fully understand. "Health insurance is genuinely complicated. There are tiny clauses, room rent caps, waiting periods, exclusions, and conditions that most people don't fully understand and then they find out the hard way, when they still have to pay out of pocket despite having a policy," he stated. Unlike bundled products, health insurance complexity makes it harder for investors to make informed decisions.
According to LiveMint and The Economic Times reports, the broader takeaway from Kamath's comments is the growing importance of financial due diligence. Experts increasingly advise individuals to separate insurance from investing, carefully read policy documents and compare products independently before committing money for the long term. The comments highlight the need for investors to understand product structures, compare returns, and avoid combining unrelated financial goals in single products. For beginners, experts recommend starting with stable categories like large-cap or index funds and avoiding emotional reactions to market dips, emphasizing consistency over market noise.
