Now more than ever, consumers need to know what their life insurance really costs. Certain older policies are so bad that they ought to be replaced. Some new policies shouldn't be bought in the first place.

But how can anyone tell the good values from the bad? The cost of a life-insurance policy is a subtle mix of premium prices, cash values and dividend payments, shaken not stirred, with eye of newt and toe of frog. The numbers can be shockingly manipulated. The National Association of Insurance Commissioners says that the current method of life-insurance cost comparison (known as the interest-adjusted method) is "seriously flawed and fatally defective."

For the time being, it is likely to remain so. After aggressively pushing for better cost disclosure a couple of years ago, NAIC crashed into a wall of industry opposition. Heads rolled. Since then, the association has grown rather quiet about the "serious flaws" in current life-insurance sales presentations.

It was back in 1980 that a NAIC task force proposed an interesting new formula for calculating insurance costs. Had it been adopted, it would have accomplished three important things:

1. It would have helped state regulators uncover price manipulation. At present, many life-insurance policies look better in the sales documents than they are in fact.

2. It would have helped life-insurance buyers, by disclosing yearly rates of return on the so-called "savings element" of cash-value life-insurance policies. Returns range from 2 to 7 percent on regular policies and possibly more on universal-life policies (although a new tax ruling is expected to reduce the yield on universal life). These disclosures might have moved buyers away from whole-life policies and toward a combination of inexpensive term insurance and tax-deferred savings accounts.

3. The rule would, for the first time, have provided regular cost disclosure to people who already own insurance policies. Some older policies now yield no more than 2 or 3 percent a year. If people realized that, they might switch to policies providing higher rates of return.

After a stormy set of hearings, NAIC retired to consider the industry's many criticisms of the task-force proposals. A new, or modified cost-disclosure proposal may be presented at the NAIC meeting next November.

But many of the old ideas are "dead in the water," says William C. Scheel, professor of insurance at the University of Connecticut. Some backers of the aggressive 1980 proposal have lost their jobs. Others involved in the project prudently took up other lines of work.

None of this augurs well for the kind of mandated cost disclosure that consumers need in order to make valid price comparisons among competing policies, without being misled by questionable sales practices.

Until, and unless, NAIC does something for you, you'll have to try to make cost comparisons on your own. It can be done, but it isn't easy. For help, you might turn to Joseph M. Belth, insurance professor at Indiana University and one of the most precise and perceptive analysts of insurance costs around today.

Belth has developed a formula for measuring insurance costs--explained in the June, 1982, issue of his newsletter, The Insurance Forum (available for $2, from PO Box 245, Ellettsville, Ind. 47429). The formula looks forbidding, but is relatively simple for someone who can manage a hand-held calculator. The hardest part, Belth says, will be gathering the information you need from the insurance company.

The newsletter includes a model letter you can use for obtaining essential data about your policy. "If your insurance company won't send all the data, it is grounds for a complaint to your state insurance commissioner," Belth says.

I must warn readers that this effort is only for the most determined. "But unless at least a few people start writing to their insurance companies and demanding this information, we'll never get real cost disclosure," Belth says.

Belth is especially concerned about the amount of life-insurance replacement going on today. Many older policies are poor values, and should be replaced by new ones, but other older policies are perfectly good. How can a consumer tell when replacement is actually warranted? "Some of what the insurance agent says may be accurate," Belth says. "But some of it may be deceptive or even false."

That's where full cost disclosure comes in. You can figure out the cost by using Belth's formula. And you can help the cause by writing to your state insurance commissioner (get the address from your local librarian), and demanding action on the 1980 proposal for truth in life-insurance pricing.