(MONEY Magazine) – You know about discount stockbrokers. And no-load mutual funds. But how about the ways to slash life insurance commissions, which can equal 100% of your first year's premium? ''Most life insurance companies really don't want people to know how to reduce their commissions,'' says Rick Nelson, an independent agent in Northbrook, Ill. And no wonder: The right moves can slice as much as 90% from a policy's initial sales charge. While that's bad for the agent (fewer dollars wind up in his or her pocket), it's good for you (more of your premiums go toward coverage). You pay the biggest commissions on whole life, universal life and variable life policies, which link insurance protection with savings accounts known as cash value. The commissions on these policies generally run five times higher than those on term policies, which provide insurance with no savings features. With a typical cash-value policy, your agent keeps 55% to 80% of the first year's premium; the company takes another 20% to 45% to cover its other selling expenses. In the second through 10th years, the agent usually siphons off 5% or more of your premiums. You don't have to accept such exorbitant fees, though. Use the following money-saving techniques instead.

BUY LOW-LOAD INSURANCE TEN INSURANCE COMPANIES, double the number in 1990, employ either salaried telephone representatives or financial consultants who collect only modest commissions or fees for selling policies. Generally, sales fees on these low- load policies amount to roughly 10% to 20% of your first year's premium and 2% or so of subsequent premiums. Most low-load companies are relatively small; the largest, Commonwealth Life, has $4.4 billion in assets, compared with $38.1 billion for a behemoth like John Hancock. And some aren't licensed to sell insurance in every state. Nevertheless, most of the 10 discount insurers earn high grades for financial soundness from major ratings companies A.M. Best, Moody's Investors Service and Standard & Poor's. Among the highest rated are Ameritas, Commonwealth Life, Peoples Security Life, Southland and USAA. All get A+ grades from A.M. Best, for example. Buying low-load coverage helps turbocharge your policy. Let's say, for example, that a 35-year-old nonsmoking woman gets $350,000 of universal life coverage from Ameritas for a $2,000 annual premium. At the end of the first year, the policy's cash value will total $1,819. By contrast, after one year, a similar policy from Metropolitan Life, a highly regarded full-price insurer, would have zero cash value, because of selling expenses. Furthermore, if Ameritas continues to pay 7.8% on its savings accounts -- its rate after the first year -- the cash value in our example will grow in 30 years to $192,800, vs. $148,821 for the MetLife policy, which pays only 7.2%, chiefly because of annual marketing and administrative expenses. If you know how much coverage and the type of policy you want, two low-load firms, Ameritas (800-552-3553) and USAA (800-531-8000), will sell you insurance by telephone. Otherwise, you can get a financial planner or insurance consultant to determine how much insurance you should buy. This pro will charge a flat fee or a modest hourly rate. For example, 450 firms nationwide associated with Fee for Service, an insurance brokerage in Tampa, analyze a client's insurance needs for $100 to $150 an hour and then sell policies offered by eight cut-rate insurers. The planners usually charge $200 to $500 for selling $100,000 to $500,000 of whole or universal life coverage -- 7% to 15% of the typical agent's commission for a policy of the same size. (For the names of planners connected with Fee for Service, call 800-874-5662.) In addition, fee-only financial planners, such as members of the National Association of Personal Financial Advisers (800-366-2732), can find you suitable low-load policies.

GET A BLENDED POLICY THIS TECHNIQUE, WHICH INvolves combining different types of insurance into one policy, can easily cost you 30% less than the premium for comparable whole life coverage. Blends have been available to the rich since the 1970s. Lately, however, Guardian Life, Manufacturers Life, Prudential and other insurance companies have sold them to people who want as little as $300,000 of coverage.

With a blended policy, you buy a combination of whole life and term insurance; you also obtain paid-up additions -- mini whole life policies purchased with the earnings on your cash value -- which gradually replace the term coverage. Many insurers require that whole life represent at least 25% of the blended coverage; other companies insist on a minimum dollar amount, such as $200,000 of whole life. An agent generally collects 30% to 50% less in commission from a blended policy than from a regular whole life contract; moreover, commissions on the paid-up additions you buy each year are a mere 5% or so of the whole life premium. Thus your agent will probably not recommend a blend; you may have to request it. Here's how a typical blend works for a 45-year-old man looking for $350,000 of whole life coverage. He could buy, say, a Prudential whole life policy with an annual premium of $6,648. But sales commissions of roughly $5,000 and other expenses would vaporize the policy's cash value in the first year. On the other hand, if he bought a policy that blended $200,000 of whole life with $150,000 of term, his premium would drop by 36% to $4,287 -- $3,831 for the whole life and $456 for the term. Blended policies have a few potential hitches. If interest rates fall, the whole life policy may not accumulate the dividends and the paid-up additions you expected. This could boost your premium since you would then have to pay for the paid-up additions or increasingly expensive term coverage to maintain the anticipated death benefit. To avoid getting stuck, plow some of your savings from commissions back into the policy through a paid-up-additions rider. In the process, you will also boost your cash value substantially. Another caveat: Insurance experts warn that an Internal Revenue Service private ruling in November 1990, concerning a universal life policy with a term rider, could eliminate a valuable tax advantage of some blended policies -- namely, the option to withdraw money tax-free through policy loans. The IRS hasn't said how it would treat blends just yet. But if you want to be on the ! safe side, says Douglas Hertz, an actuary with Massachusetts Mutual in Springfield, Mass., have your agent make certain that your blend doesn't run afoul of the IRS rules on maximum premiums for cash-value policies. These guidelines are designed to prevent people from using cash-value contracts as tax dodges by accumulating tax-deferred earnings and then pulling the money out as tax-free loans. Advises Hertz: ''Tell your agent to be sure that your premium for the blend won't exceed the premium limits set by the IRS for the whole life portion alone.''

USE AN AGENT WHO REBATES THE PREMISE BEHIND REBATING is simple. After you pay the policy premium, your agent refunds to you 50% or so of his or her commission. Unfortunately, though, rebating is legal only in California and Florida. And in Florida, insurance companies can refuse to allow their agents to rebate, which has effectively eliminated such discounting there. Moreover, even if you live in California, you may have trouble finding agents willing to rebate, since many fear reprisals from insurers. In fact, the state's insurance department is investigating several big insurers for allegedly firing or refusing to do business with agents who want to offer rebates. Nonetheless, at least one large agency, Direct Insurance Services in San Diego (800-622-3699), brazenly refunds 50% to 75% of all commissions on the whole, universal and term policies it sells for more than 80 insurers. ''And we document the rebate percentage by sending the customer a copy of the commission statement from the insurer,'' says DIS president Mark White. You don't have to be a California resident to buy a rebated policy, but you do have to purchase the policy in person in that state. What if you don't live in California? If you need at least $300,000 or so of coverage, consider traveling there on vacation and picking up a policy as a souvenir. For example, a 50% rebate on a $350,000 Prudential whole life policy for a 45- year-old man would chop his first-year premium from $6,648 to $4,155, because he would get a $2,493 rebate, half of the $4,986 sales commission. In addition, he would get annual rebates of $332 for the next nine years, giving him total savings of $5,481. That's more than enough to cover the cost of taking the kids to Disneyland. Warning: The IRS considers insurance rebates to be taxable income. So any refund you receive will effectively cut your savings by 31% if you're in the top federal tax bracket. ) Want even bigger savings? You can slash commissions to the max by combining a blended life insurance policy with an agent's rebate. For example, buying the $350,000 Prudential blend through Direct Insurance Services would net the 45-year-old man a $1,608 rebate in the first year, dropping the initial premium to $2,679, for a 60% savings. ''Blending is a great way to slice insurance commissions,'' says White. ''And rebating helps you save even more.''