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Zerodha's Nithin Kamath Warns Indians Keep Falling for ULIPs and Endowment Traps

Nithin Kamath, co-founder of Zerodha, has highlighted that Indian investors repeatedly fall for unsuitable financial products like ULIPs and endowment plans. Despite widespread financial education and easy access to online information, sales of these products continue to grow. Kamath noted that even a simple Google search or AI tools like ChatGPT can reveal the drawbacks of such investments. He emphasized that the problem is no longer a lack of information but a persistent pattern of poor financial decisions.

Key Points: Zerodha's Nithin Kamath on ULIPs & Endowment Traps

  • Nithin Kamath criticizes repeated financial mistakes by Indian investors
  • ULIPs and endowment plans remain popular despite expert warnings
  • Access to online tools and AI hasn't reduced bad investment choices
  • Kamath urges investors to use ChatGPT or Claude to evaluate products
2 min read

People keep falling for same money traps: Zerodha's Nithin Kamath on ULIPs, endowment plans

Zerodha's Nithin Kamath says Indians repeat same money mistakes, falling for ULIPs and endowment plans despite easy access to financial education online.

"People continue to fall for the same pitches, despite all the articles, videos, and excel sheets explaining why these products are bad. - Nithin Kamath"

New Delhi, May 10

Nithin Kamath has raised concerns over the way Indian investors continue to fall for unsuitable financial products despite easier access to financial education and online information.

In a post on social media platform X, the Zerodha co-founder said that while India has witnessed a massive rise in first-time investors entering mutual funds, stocks and insurance products, many continue to repeat the same financial mistakes year after year.

"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 wrote.

"Take investing. Pretty much every influencer, every serious finance writer, and the financial media have been screaming for years: don't mix insurance with investments. ULIPs are usually a bad idea. Endowment policies are usually a bad idea," he added.

Kamath specifically criticised the continued popularity of ULIPs and traditional endowment insurance policies, products that financial planners and investment experts have long warned against.

According to him, despite years of articles, videos and awareness campaigns explaining the drawbacks of these products, their sales continue to rise steadily.

"ULIPs are usually a bad idea. Endowment policies are usually a bad idea. And yet, ULIP sales continue to grow and endowment plans continue to be sold. People continue to fall for the same pitches, despite all the articles, videos, and excel sheets explaining why these products are bad," he said.

Kamath argued that the problem is no longer a lack of information. Investors today have access to online comparison tools, detailed policy disclosures and AI platforms that can help explain complex financial products in simple language.

"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 added.

- IANS

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Reader Comments

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Priya S
Honestly, I feel the problem is deeper than just awareness. In many Indian families, the local LIC agent is like a trusted family advisor. They come home, have chai, and convince parents that ULIPs are 'best of both worlds'. My mother still trusts her agent more than YouTube videos or ChatGPT! It's about trust, not just information availability. Nithin should also talk about how to break that cycle of blind faith in agents.
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James A
As someone who works in fintech in Bangalore, I see this daily. The issue is also that many people don't have time to research. They get a bonus, a relative recommends an endowment plan, and they sign up. Plus, ULIPs have high agent commissions – that’s why they push so hard. Regulators should cap commissions on these products to protect consumers. Just a thought from an expat who loves India's growth story!
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Aman W
Nithin is spot on – but he should also acknowledge his own conflict of interest. Zerodha benefits when people invest in stocks and mutual funds rather than insurance products! That said, the core message stands: ULIPs and endowments are generally poor for middle-class families. I fell for one in 2020 – lesson learned the hard way. Now I only buy term insurance and put money in index funds. People need to learn basic financial literacy in school itself. 🎯
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Steven W
I’m an NRI and I see this even in our community. The Indian diaspora in the US and UK still buys these products thinking 'LIC is safe' or 'SBI Life is good'. It's cultural – we were taught to avoid 'risky' stocks. But ULIPs lock your money for 10-15 years with mediocre returns. My parents in Delhi still don’t believe me when I tell them their endowment policy is a bad deal. Education is there, but mindset change takes a generation. 😐

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