“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.