Start finance journey with life & health insurance: Nithin Kamath

Health and life insurance are foundational elements of financial security-they protect against medical emergencies and provide long-term stability for families

In a recent social media post, Nithin Kamath, the founder and CEO of Zerodha, emphasised the importance of securing life and health insurance as the first step in one's personal finance journey.

 

“The first thing you should do when you are starting your personal finance journey is to ensure you have sufficient life and health insurance. If you have dependents, not having life insurance is a bad idea,” said Kamath, who is also the founder & CEO of Rainmatter.

 

“Based on my interactions with folks, perhaps the biggest reason why they don’t have life insurance is because the policies are a nightmare to understand with all sorts of jargon and hidden clauses. Then there’s the fact that insurers keep changing things. For example, I didn’t know underwriting rules had become much tougher and rejections had gone up,” he said.

 

Kamath also shared a blog post outlining the essential factors to consider before purchasing life insurance in 2025. The article covers various aspects, including selecting the right insurance provider and understanding underwriting regulations.

 

Experts believe that your 20s are the ideal time to pick up a term plan. One of the most significant advantages of buying a term plan in your 20s is the lower premium amount. Insurance companies consider your age and health condition when deciding the premium amount, and naturally, you are healthier in your mid-20s. This translates to lower premiums compared to purchasing a term plan later in life.

  Experts suggest points to keep in mind while buying life and health insurance

  Life insurance considerations

  Understand your needs: Determine how much coverage you require based on your income, dependents, and financial obligations such as mortgages and debts.

  Assess affordability: Ensure you can manage premium payments now and in the future, considering potential increases.

  Review and update policies: Periodically review your policy to adjust coverage as your family size or income changes.

  Seek professional advice: Consult an insurance agent to evaluate your needs and understand policy details.

 

Policy tenure: Select a policy term that aligns with your financial dependency period.

 

Health insurance considerations

 

Learn how health insurance works: Understand the basics of health insurance, including premiums, waiting periods, and claim processes.

  Coverage and exclusions: Know what is covered and excluded in your policy to avoid surprises during claims.

  Age and premiums: Consider your age and the age of family members, as premiums increase with age.

  Pre-existing conditions: Check if pre-existing conditions are covered and understand any waiting periods.

 

Balance premium and coverage: Ensure the premium is affordable while providing adequate coverage.

 

Claim processing time: Evaluate the insurer's claim processing efficiency by reading reviews and checking past performance.

 

Disclose health information: Accurately disclose health details to avoid claim disputes.