Life insurance without built-in commissions is best suited for permanent life insurance buyers who want lower premiums and better performance, especially in the early years. The commissioned compensation model was designed more than 100 years ago when the average face amount of a life insurance policy was less than $5000. Today, some people purchase life insurance policies with face amounts as high as one hundred million. If you own or may be considering a permanent life insurance policy, chances are good that you will find great value in life insurance without commission.
As the innovator of this type of life insurance (often referred to as no-load life insurance), I remain concerned about the negative perceptions 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 are often more than 100% of the premium.
“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
Instead of receiving built-in commissions from then insurance company, policies built without commissions are efficiently designed with better performance. You pay a transparent fee which is typically less than commissions. 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. The amount of work in each specific 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 professionals who are often helping many consumers without ever being compensated.
“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.”life
Typical Uses of Life Insurance Without Commissions:
1. Permanent life insurance consumers, especially those buying large face amounts in excess of $5,000,000.
2. Overfunding a permanent life insurance policy for retirement planning purposes.
3. Second to die permanent policies, especially those in excess of $5,000,000.
4. Premium financing.
5. Corporate Owned Life Insurance
ted bernstein boca raton florida
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Also published on Medium.