TeamSpeak 3 offers encryption of all voice packets with an AES based encryption. This is an optional server feature as the calculations require additional server CPU usage, and voice encryption might be in conflict with local law.
To check if your conversation is encrypted, please right click on the TeamSpeak 3 Server's name you are connected to (above the top channel), click on Edit Virtual Server and select the Security tab.
If "Channel voice data encryption" is set to "Globally off", then the encryption mechanism is disabled. If it is set to "Globally on", encryption is enabled for all channels and if it is set to "Configure per Channel", please close the "Edit Virtual Server" window and click at your channel. On the right hand side, you will find the status of "Voice Data Encryption", which is either "Enabled" or "Disabled".