How to get the best return on investment in Life Insurance? 2026 Guide

Life Insurance protects your family, but chosen wisely, the right policy can also help your money grow. In 2026, with Aditya Birla Sun Life Insurance (ABSLI), regulated by the Insurance Regulatory and Development Authority of India (IRDAI), you can choose from pure-protection Term Plans, Guaranteed Savings Plans, and market-linked ULIPs. A key 2026 change improves returns across the board. Since 22 September 2025, GST on individual life insurance premiums is 0% (down from 18%), so more of every rupee works for you.

As per IRDAI and insurer disclosures for FY 2025-26, ABSLI settled 98.86% of individual claims with 630+ crore total claims paid, a reliability marker worth weighing alongside returns. Getting the best return on your Life Insurance is about matching the policy type to your goal, horizon, and risk appetite, then minimising charges and maximising tax efficiency. Here's how.

How do you get the best return on Life Insurance in 2026?

Start by separating two needs: pure protection and wealth creation. For protection alone, a low-cost term plan is unbeatable. For growth with a life-cover wrapper, ULIPs and guaranteed savings plans add an investment component. The best overall return usually comes from buying adequate term cover cheaply and directing the rest into goal-appropriate investments.

Life Insurance returns vs. other 2026 investment options

To judge whether an investment-linked policy is right for you, compare its returns and tax treatment with mainstream options. As of the April-June 2026 quarter, PPF pays 7.1% tax-free, while bank FD rates have eased following the RBI's rate cycle, making PPF's post-tax yield more attractive than most FDs.

*Market-linked returns are not guaranteed and depend on fund performance. Figures are indicative for 2026 and vary by product and market conditions. Use the ABSLI Investment Return Calculator to model outcomes.

What are the ways to maximise your Life Insurance returns?

• Match the policy to your goal: Term for protection, ULIPs such as ABSLI Wealth Infinia (with 20 fund options and 5 investment strategies) for long-horizon market growth, and the participating ABSLI Savings Plan for definite goals like a child's education.
• Start early and stay invested: Longer horizons let compounding work, especially in equity-linked ULIPs (which have a 5-year lock-in).
• Mind the charges: ULIPs carry allocation, fund-management, mortality, and administration charges. Some ABSLI ULIPs, such as Wealth Infinia, return the mortality and premium allocation charges at maturity to boost your fund value.
• Use tax efficiency: Premiums qualify under Section 80C (Section 123 of the Income-tax Act, 2025; old tax regime) up to ₹1.5 lakh, maturity proceeds are tax-free under Section 10(10D) (Section 11 read with Schedule II of the Income-tax Act, 2025) subject to conditions, and 0% GST since September 2025 lowers your effective cost.
• Check the insurer's track record: A high individual claim settlement ratio reflects reliability, ABSLI's was 98.86% in FY 2025-26.

Does the 0% GST improve Insurance returns?

Indirectly, yes. Before 22 September 2025, an 18% GST inflated your premium, reducing the net amount available for investment in ULIPs and savings plans. With GST now 0% on individual policies (including ULIPs), every rupee of premium goes further, improving the effective return on investment-linked policies. Group policies still attract 18% GST.

ABSLI claim settlement ratio vs. leading insurers (FY 2025-26)

Returns matter, but so does the insurer pay out. As per IRDAI and insurer public disclosures, ABSLI settled 98.86% of individual claims in FY 2025-26:

Source: IRDAI and insurer public disclosures (Form L-40) for FY 2025-26. ABSLI's own disclosures report a CSR of 98.86% for FY 2025-26.

Explore options on the ABSLI Investment Plans page.

Conclusion

The best return on Life Insurance comes from matching the right product to your goal, keeping charges low, and using every tax benefit, now boosted by 0% GST on individual premiums since September 2025. Whether you choose a ULIP such as ABSLI Wealth Infinia for growth, the ABSLI Savings Plan for guaranteed additions and bonuses, or a Term Plan Plus separate investments, ABSLI's 98.86% individual claim settlement ratio for FY 2025-26 makes it a dependable partner. Compare options on the ABSLI Investment Plans page and align your choice with your financial roadmap.