Acquiring life insurance can be a complicated affair. Said complication is greatly increased by the amount of jargon that consumers have little hope of understanding, not to mention the commission hungry sales agents. Among the many decisions that need to be made is whether one goes down the term or whole-life route. Ask any insurance sales agent which type of life insurance is the best and he or she will undoubtedly respond that the answer is whole-life insurance. Ask the same life insurance agent which type of life insurance he makes an eighty percent commission on the first year’s premium and the answer will be the same.

Yes, it is a little known fact among consumers new to the life insurance industry that should the friendly insurance agent sell you term life insurance, he or she will make a commission equal to ten percent of the first year’s premium. Should the same life insurance agent sell you whole life insurance on the other hand, not only will that first years premium be significantly higher, his or her commission will rise to a whopping eighty percent of it. With knowledge of said increase, it is unsurprising that many consumers confidence in the honesty of the opinions offered by insurance sales agents’ drops dramatically.

The fact is that for the majority of consumers out there, term life insurance is not only significantly cheaper but also perfectly suitable. Life insurance sales agents claim that whole life packages allow you to save money throughout your life tax free which you are then free to borrow against. This is of course true; it is however but one side of the coin. On the other side of the coin, whole life insurance has higher fees, higher commissions and some pretty scary clauses. The most notorious of which are the surrender charges that are so high that should you opt out after ten to fifteen years, you could be left with nothing. Therefore unless you are told other wise from an impartial non commission chasing source, stick with term life insurance.

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