Future thinking should be shared. With that in mind our team publishes insights weekly to help keep you in the (k)now.


Hewison Private Wealth - Insights
Hewison Insights

Sales commissions in Insurance

Chris Morcom
Partner/Private Client Adviser
15 Nov 2010

I recently read the following in a well known financial newspaper, in reference to commissions paid to advisers for recommending insurance to a client: 


“Life insurance commissions have been falling but are still high. They range from 100 percent of the premium in the first year to a 10 percent annual or trailing fee.

But the commissions are paid by the insurance company and don’t directly affect individual premiums.”

What a complete load of rubbish.  If the insurance company is paying advisers, where does the money come from? Certainly not the company’s own pockets – the end person getting the insurance is paying.

Commissions affect premiums, and those obtaining insurance need to know there is another way.  Instead of using an adviser who receives commissions for selling insurance, why not try using the services of a professional who charges a fee for their service and rebates all commissions.

The table below summarises the premiums paid by a 39 year old, healthy male in a white collar professional occupation for a $1 million life insurance policy over a ten year period:

The saving in the first year would be $256 and the saving over a ten year period would be nearly $3,500.

So if you are considering obtaining insurance, perhaps it’s time to ask your adviser to provide advice on a fee basis, with all commissions on policies refunded.


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.