Choice Chairman Jenni Mack has attacked life insurance commissions, saying they lead to “churning” of clients to earn more income for advisers.

She has cited the high commission paid on life products – 130% in the first year and a trail of between 10% to 30% in subsequent years – as the major reason for a ban.

The Federal Government is examining whether a ban on life insurance commissions should be included in the draft Future of Financial Advice Act. It has already decided to ban commissions on investment product sales.

Ms Mack says if the commissions are not banned, advisers will just switch to selling life insurance after the Act comes into force on July 1 next year. She has not suggested alternative methods for paying advisers selling life insurance.

Ms Mack did not respond to insuranceNEWS.com.au calls.