Life insurance without built-in commissions is best suited for life insurance buyers of permanent coverage who want lower premiums and better performance. The compensation method of built-in commissions was designed close to 100 years ago when the average face amount of a life insurance policy was less than $5000. Today, many people purchase life insurance policies with face amounts as high as one hundred million in some cases. If you now own or may be considering a permanent life insurance policy, chances are good that you will find great value in no load life insurance.
As the innovator of life insurance without commissions for permanent policies (often referred to as no-load life insurance), I continue to be concerned about the negative perception attached to permanent life insurance. Offering complete transparency, permanent life insurance without built in commissions offers superior value to life insurance buyers by eliminating ALL the traditional selling costs traditionally priced into a policy. The first year commissions (often 100%-200% of the premium), the renewal commissions (totaling another 50%) and the expense reimbursements are all eliminated from the pricing of no load life insurance policies.
“Bernstein…has introduced what are essentially no-load and low-load policies to the life insurance business…That could mean huge savings for policy buyers.” Forbes
“Low-load Life Performs Better For Clients, Companies” National Underwriter
The results are better performance, lower premiums, immediate cash surrender value and complete transparency.
Forbes magazine accurately reported that the impact to the insurance buyer was dramatic. Basic pricing logic suggests that removing all commissions led to better value in every measurable aspect of a policy. When I first brought life insurance without commissions to the market, it quickly received interest from life insurance buyers with big, jumbo policies ranging from $5,000,000 to $100,000,000.
Instead of being paid built-in commissions from an insurance company, our clients get an efficiently designed policy with better performance and pay a transparent fee which is always less than commissions for a comparable policy. Charging fees for life insurance provides better value in an environment of complete transparency and disclosure concerning the compensation.
“Life insurance without the built-in commissions provides a meaningful alternative for buyers of large permanent life insurance policies, especially in the estate planning, premium finance and corporate owned life insurance markets.” Ted Bernstein, Life Insurance Concepts
Without built-in commissions, premiums are lower and the early year cash value is nearly 100% of the paid in premium. Now, the amount of work done by an agent on each case can be accurately reflected when charging fees. I am not saying that life insurance agents are not paid fairly in the traditional commission based system. My family has been in the insurance industry for 4 generations and I have the greatest respect for this industry and for professional agents. I believe agents are paid fairly in lower face amount sales as life insurance is a complex product requiring counsel from a professional often helping many consumers without ever being compensated. With the introduction of no-load policies, some traditional agents feel threatened and uncomfortable by this disclosure and transparency.
“Back in 1982, Bernstein was sure he had an idea for a new service that would save consumers money. There was just one problem: it was bound to alienate all the people who would normally sell it,” wrote Martha Mangelsdorf of Inc Magazine. “So he started a campaign to explain his concept to other professionals to whom a wealthy person might go to for advice for life insurance: namely, lawyers, accountants and bankers in trust departments.”
When Should a Policy Without Commissions Be Considered?
1. Permanent life insurance consumers, especially those buying large face amounts in excess of $5,000,000.
2. Over funding a permanent life insurance policy.
3. Second to die permanent policies, especially those in excess of $5,000,000.
4. Premium financing.
Would you like to see a quote or a comparison of your existing coverage?
Please call me or email me for a complementary consultation: 561-869-4500
Also published on Medium.