What Is Primerica Life Insurance

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Primerica is a financial services company but if you do a simple Google search for it you find questions like, Is Primerica a pyramid scheme? Is Primerica a legit company? Can you really make money with Primerica? So, SmartFinancial decided to look into it. What we found was relatively tame despite the scandalous questions people ask.

Let's take a look at Primerica. In 2015, it was listed by Forbes as one of "America's 50 Most Trustworthy Financial Companies."

What Is Primerica?

Primerica is a company that does many things. It offers financial services, term life insurance, auto & home insurance, legal protections (with contracts, taxes, etc), mutual funds, annuities, segregated funds, managed accounts, long-term care insurance, debt management planning and identity theft protection. What sets Primerica apart from other companies is that they work with working class families, not the affluent. Most financial services companies do not look to work with more modest incomes and savings.

Another thing that sets Primerica apart from other financial services companies is that it uses multi-level marketing to sell its products and services. It is a spin off of Citigroup.

Where Is Primerica?

Primerica is headquartered in Duluth, Georgia but they have offices across the country and 120,000 representatives nationwide. Representatives are encouraged to regularly recruit other participants to sell products and recruit more representatives.

What Is the Marketing Concept Behind Primerica?

Founder Arthur L. Williams Jr. is behind the concept of "buy term and invest the difference," to show how middle-class Americans could buy protection while saving and investing in mutual funds and retirement accounts. The idea is to join and sell to your inner circle while recruiting others to do the same. As you can imagine, the company grows quickly this way. The question is whether or not representatives can make an actual income or not and if this marketing model is ethical. More on this below.

What Is Multi-level Marketing?

Consumers often ask if Primerica is a "pyramid scheme." To answer this question fully and honestly, you have to understand what Primerica actually is, which is called Multi-level marketing or network marketing. It is also called Pyramid selling. The word scheme makes it sound illegal, which it is not.

The way it works is this: the compensation plan pays out only from 2 revenue streams: the first from commissions of sales made by the participants to their own customers and also from the commissions based upon wholesale purchases made by other distributors below the participant (called "down line distributors") who have recruited other participants into the organization.

While multi-level marketing companies should not be confused with illegal pyramid schemes. Primerica is not a scheme. With this said, even the participants of legitimate MLM businesses have a hard time making a net profit.

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Is Primerica Citigroup?

Almost all of the products sold by Primerica are from Citigroup, the corporate parent of Primerica. Essentially, all the participants at Primerica (all 120,000 of them) set out to sell term life insurance, mutual funds, life insurance and annuities. These products get high ratings across the board.

Who Do Primerica Representatives Sell To?

The market participants look to sell to are family and friends, a "warm market," which makes it easier to sell retirement and life insurance products. These sales are commission-based and the commission is split down the line from one recruiter to the recruiter's recruiter and so on.

How Much Do Primerica Representatives Make?

According to Business Insider (in 2010), the average rep makes about $5,156 a year so don't quit your day job. Of course higher ups in the company make much more. You either make your money selling the products mentioned earlier or by recruiting people who will sell the products mentioned earlier, since you will make partial commission from the people you actively recruit.

Do You Have to Pay Money to Sell Primerica's Products?

There's an initial $199, which goes towards life insurance licensing, administrative fees and background checks. You can then make money with Primerica by selling a combination of term life insurance, mutual funds, and debt management products.

Primerica Life Insurance Review, 2021

Considering the bias against pyramid marketing, Primerica life insurance gets pretty good ratings across the board, and Primerica is considered a financially strong company by A.M. Best. The company's term life products are the most successfully selling products. Available options include a terminal illness rider, also called an accelerated death benefit, which allows the insured to withdraw 70% of the benefit due to having a terminal illness.

Unlike most traditional brands of life insurance, Primerica sales people are all independent contractors, many of whom own the product as well.

According to J.D. Power's 2020 U.S. Life Insurance Study, Primerica ranks 20th out of 23 life insurance companies in the U.S.

Does Primerica Offer Auto Insurance?

Yes, Primerica offers auto and home insurance policies.

What Is Primerica Secure?

Primerica Secure is Primerica's auto and homeowner's insurance referral program, which claims to save customers as much as $478 a year.

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