Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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If you’re looking to save a few bucks on your life insurance policy, “no-load life insurance” might help you achieve that goal.

No-load life insurance policies are a great way to reap the benefits of a whole life insurance policy without breaking the bank.

[Also consider a term life policy, which can provide a lot of coverage for a low price.]

What Is no-load life insurance?

Similar to a no-load mutual fund, no-load life insurance is a policy that does not charge fees (or severely limits the fees charged) for initiating and servicing the policy.

It is a type of life insurance where no sales commission is paid, unlike most policies which include both upfront and ongoing payments to the agent or representative who sells the insurance policy.

If it merely reduces the fees charged, it may be referred to as a “low load life insurance policy.”

No-load life policy can be an attractive option for those with a tight budget, however, they have less hands-on service. Therefore, when shopping for no-load life insurance, take in mind to make a thorough research before choosing the type and quantity of insurance.

Either way, the main idea is to keep more of your money so you can build cash value faster.

These policies are sold by insurance companies that don’t rely on third-party sales teams. However, insurance customers should know that depending on the details of the insurance contract, the no-load policy might turn to be a more expensive option. This is because insurance companies and representatives include other hidden fees such as processing fees, handling fees, or transaction fees. These sales fees increase the total premium payment paid by the customer.

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What fees do I avoid with no-load life insurance?

Your monthly payment for a whole life insurance policy includes the insurance premium for the actual coverage plus the fees charged by the insurance company.

The fees added to the policy are used to pay for operating expenses at the insurance company, such as agent commissions and advertising.

In a no-load life insurance policy (or low load), the service fees are removed or reduced.

The insurance company attempts to earn a profit strictly on their underwriting operations and the agent must charge you a fee for their service outside of the transaction with the insurance company.

Tip: Make sure to verify any and all fees you may be charged by your agent when purchasing a no-load life insurance policy, as they can vary widely.

Insurance carriers may not charge a fee, but unscrupulous insurance agents may try to add hefty fees of their own, which can lead to higher overall costs.

That said, you will probably pay much less money overall if you opt for a no-load life insurance policy.

Remember, when opting for a whole life insurance policy, the more cash in your account, the faster it will grow. Not having fees charged to your account is a good way to make that happen.

Is there a catch with no-load life insurance?

Not necessarily. However, a common argument against no-load life insurance policies is they lack the personal touch you may receive from an agent or a company who may provide better service in exchange for the continuous fees you are charged.

Additionally, with less overall consultation throughout the purchasing process, some believe an individual may purchase the wrong type of life insurance or the wrong amount of insurance.

A good way to avoid this pitfall is to do plenty of research online, gather insurance quotes, and maybe even speak with an independent agent prior to deciding whether or not to go for a no-load life insurance policy.

Check out our section on how to purchase life insurance to make sure you get the best value for your money.

Read more: How much life insurance do I need?