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Would You Still Buy Insurance If 75% of Your Premium Went to Commission?
Imagine signing up for an insurance or savings product, only to find out that up to 75% of your first-year premium is going straight to commissions. Sounds crazy, right? But that’s exactly what’s happening through Clientèle Life’s Independent Field Advertiser (IFA) programme—a multi-level marketing (MLM) model that’s gaining traction in South Africa.
Let’s break it down.
What Is the Clientèle IFA Programme?
The IFA programme is marketed as a business-in-a-box for South Africans over the age of 18. It allows anyone to earn commission by selling Clientèle Life’s insurance and investment products—typically with monthly premiums around R80.
Here’s how it works:
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You join as an IFA.
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You recruit five people to buy Clientèle policies.
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You earn commission from their monthly premiums.
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If any of your five recruits also become IFAs and bring in more people, you earn even more—across six levels of downlines.
It sounds like a great way to earn extra income. But for policyholders, the hidden cost is massive.
The Commission Breakdown: Where Does Your Premium Go?
Here’s how your first year’s premium gets sliced if you sign up through an IFA:
| Level | % of Premium |
|---|---|
| 1 | 12% |
| 2 | 24% |
| 3 | 24% |
| 4 | 9% |
| 5 | 4.5% |
| 6 | 2.25% |
| Total | 75.75% |
That means if you’re paying R100 a month, R75.75 goes toward commission payouts in the first year alone. Only a small portion is actually contributing toward your insurance coverage.
What Happens After Year One?
The good news? After the first year, commission drops to a maximum of 20% over the next two years. But by then, most of the money you’ve paid has already gone to other people in the chain.
“But Everyone Pays the Same”
Clientèle defends its model. Spokesperson Paddy McDonald told Moneyweb that the pricing remains the same, whether you sign up through an IFA or via their call centre.
“The structure of commissions is no different to general market practice in that the costs of ‘acquisition’ are apportioned to the first three years of any life insurance policy.”
In other words, you’re paying for someone to bring you in—whether it’s an IFA, a broker, or a sales rep on the phone.
He also pointed out that in the broader industry, first-year commission can reach as high as 85% when going through traditional brokers.
“As and When” Commissions: A Safer Bet?
Unlike many insurers that pay full commission up front (even if you cancel early), Clientèle only pays IFAs “as and when” your premiums come in. So, if you stop paying or claim early, commission stops too. From a business perspective, it’s a smart risk-reduction move.
What Products Are on Offer?
The Life Cash Back Plan is Clientèle’s flagship product in this programme. It’s a whole-life policy offering cover from R5,000 to R200,000. A savings product is also available to clients who prefer investing over insurance.
So… Is It Worth It?
If you’re joining as an IFA, the earning potential might be appealing—especially if you have strong sales skills and a good network. But as a customer, it’s worth asking:
- Am I getting good value for money?
- How much of my premium is actually going toward cover?
- Is the product competitive compared to other insurers?
Ultimately, it’s your money. Know where it’s going—and ensure it works for you, not just the six levels above you.
Your thoughts? Would you still buy insurance if most of your first-year premium went to commissions? Drop your comments below 👇
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