Life Insurance Rates: Maximize Your Return
In 2026, life insurance offers more attractive rates of return than in the previous decade. Buoyed by rising interest rates and improved investment conditions in the bond markets, euro-denominated funds are regaining momentum. Meanwhile, unit-linked funds continue to offer higher potential returns.
In a nutshell:
- Returns on life insurance policies have risen in recent years, particularly for euro-denominated funds
- Performance differences between policies can be significant depending on the insurer and the investment vehicles chosen
- Euro-denominated funds prioritize capital preservation, whereas unit-linked funds offer higher potential returns
- Fees, management quality, and asset allocation have a significant impact on long-term performance
- Comparing policies and diversifying your investments is essential for maximizing your savings
What will the rates of return on life insurance policies be in 2026?
The rate of return is one of the key indicators used to evaluate the performance of a life insurance policy. It represents the returns generated by the policy over a given period, typically one year.
Performance has been on the rise for several years
The gradual increase in key interest rates initiated by central banks has changed the financial landscape. Insurers have gradually benefited from improved investment conditions, particularly in the bond market, which accounts for a significant portion of euro-denominated funds. As a result, returns on life insurance policies have returned to more attractive levels after several years of steady decline.
Average Performance of Euro-Denominated Funds
After hitting a low point in 2021, euro-denominated funds have gradually rebounded thanks to rising bond yields. The average market return now stands at around 2.60%, although the best plans occasionally exceed 4% thanks to bonus mechanisms or specific investment strategies.
Euro-denominated funds or unit-linked funds: How do their returns differ?
Euro-denominated funds: Safety First
The euro-denominated fund is the traditional vehicle for life insurance. Its main advantage is the near-guarantee of principal provided by the insurer. The interest earned each year is permanently locked in thanks tothe ratchet effect. Even if financial markets decline, the savings already accumulated are protected. However, this security comes at a cost: the potential return is more limited than with a unit-linked investment.
A euro fund may be right for you if you are looking for:
- low risk exposure
- a clear overview of your savings
- a medium-term investment
- a safety net within your assets
Unit-of-account funds: higher potential for returns
Unit-linked funds (ULFs) allow you to invest in a wide variety of financial instruments, such as:
- shares
- obligations
- SCPI
- ETF
- thematic funds
- private equity
Unlike a euro-denominated fund, the principal is not guaranteed. The value of the investment fluctuates with the financial markets, rising and falling. This additional risk is generally accompanied by higher long-term return potential.
Comparison of the Two Media
What factors influence the rate of return on a life insurance policy?
Not all policies deliver the same results. Several factors account for the sometimes significant differences observed among different insurers.
The Insurer's Management Policy
Each insurer sets its own investment strategy. Some prioritize safety by investing primarily in government or corporate bonds. Others adopt a more dynamic approach in order to seek higher returns. This policy directly affects the returns distributed to investors.
Raizers has opted for a rigorous selection process—one that is not extensive but is highly targeted—to provide you with the right support at the right time.
Changes in Interest Rates
Bonds are a key component of euro-denominated funds. When interest rates rise, insurers can invest in new bonds and thus offer higher coupon rates. Over time, this leadsto higher returns on policyholders’ contracts.
The portion invested in unit-linked funds
Many insurers now encourage policyholders to invest a portion of their capital in unit-linked funds. This allows themto improve their overallprofitability and, in some cases, offer additional returns on the euro fund.
Fees Applied to the Contract
Management fees, arbitration fees, and contribution fees can reduce the final return on a life insurance policy. For the same gross return, a policy with lower fees will generally be more advantageous in the long run.
How does life insurance compare to other savings investments?
Given the wide variety of options available, it makes sense to compare life insurance with other investment products.
Life insurance occupies a particularly attractive middle ground. It offers greater potential for returns than a regulated savings account and provides a level of flexibility that investors appreciate. The fact that it can accommodate various investment vehicles is also a major advantage for diversifying one’s portfolio within a single policy.
How do you choose a life insurance policy to maximize your return?
Simply looking for the best advertised rate isn't enough to choose a high-performing policy. There are several criteria that deserve special attention.
Analyze performance over several years
An exceptional return in a single year is not indicative of future performance. It is bestto examine the consistency of returns over several fiscal years in order to assess the quality of the fund’s management.
Review the range of available media
The variety of investment options available can make a difference. A policy that provides access to real estate investment trusts (SCPIs), ETFs, international equity funds, or private equity will offer more opportunities for diversification.
Compare Fees
Fees are one of the main enemies of performance. Even a difference of a few tenths of a point can have a significant impact after several years of compounding.
Tailoring Your Investment Allocation to Your Profile
The best plan is, above all, the one that aligns with your investment horizon, your risk tolerance, and your financial goals. Despite significant fees, the returns may be better than those of some other plans. It is therefore essential to consider the big picture.
What is the outlook for life insurance rates in the coming years?
The outlook is relatively favorable for euro-denominated funds. Insurers continue to benefit from the bonds they acquired in recent years amid a high-interest-rate environment. This situation should support returns in the short and medium term. At the same time, inflation and developments in the financial markets will continue to influence the performance of unit-linked funds.
If you have a long-term investment horizon, diversification is an effective strategy for striking a balance between security, returns, and risk management.
Life insurance remains a key tool for building and growing one’s wealth. The return of more attractive returns on euro-denominated funds further enhances its appeal, while unit-linked funds offer additional opportunities for returns to investors willing to accept a certain level of risk.
However, maximizing your return isn't just about finding the best advertised rate. The quality of management, the variety of investment vehicles available, fees, and how well the contract aligns with your goals are all essential factors to consider.
As part of a strategy to diversify your assets, you can also choose to supplement your life insurance with other asset classes, such as real estate or crowdfunding, in order to spread out your investment opportunities and broaden your potential sources of return.