Primerica Life Insurance: An Independent Broker’s Evaluation

As stated on their corporate website: "Primerica's roots date back to 1977 when the company embarked on a revolutionary crusade to transform the life insurance industry. Primerica's "Buy Term and Invest the Difference" philosophy encourages middle-income families to purchase affordable term life insurance so they can have more money to invest in their family's future." On the surface, this philosophy makes some sense, but if you dig a little deeper, there are five major pitfalls when dealing with a Primerica advisor.

  1. Primerica employs a "one size fits all" philosophy. In many instances, term insurance may be the best solution, but what about when insurance protection is needed for the insured's lifetime? Examples of this include a child with a permanent disability, insurance needed to offset taxes on an investment property, or the transfer of a family business. Life insurance is not simply a commodity; if it was, there would be no need for a life insurance advisor. Careful analysis must be given to both the type and amount of coverage needed.
  2. Primerica's term insurance policies are very expensive. At the time this article was written, a 50-year-old male non-smoker could get $200,000 of Term 10 coverage for $38.79 per month with Unity Life; the same coverage would cost $65.84 per month with Primerica. One reason for this is that Primerica uses a multi-level marketing distribution model – the independent brokerage model employed by other insurance companies has far fewer layers, which translates into a much more competitive cost structure. Primerica has improved it’s pricing in certain age brackets and is one of the few companies to offer 25 and 30 year Term policies.
  3. Primerica's term policies are non-convertible, and since they do not offer a permanent life insurance policy in their product lineup, the insured would have to look elsewhere should a permanent policy be needed down the road. Furthermore, should the insured's health change, he/she would probably be out of luck.
  4. Primerica is the only insurance company that encourages its advisors to work part-time. I wouldn't want a part-time accountant preparing my tax return and I wouldn't want a part-time lawyer preparing my will. The financial service industry is in a constant state of change – in order for an advisor to provide optimal customer service, they need to stay abreast of industry changes – meaning a full-time commitment to the business.
  5. Primerica employs a captive sales force; their agents can only sell Primerica life insurance products. This places their agents in a compromising position – they are not able to shop the marketplace in order to provide their clients with the best possible value. In the 1990's many insurance companies started to shift away from captive agencies and created Managing General Agencies (MGAs) as a method of distribution their products.  MGAs act as the middle man between the broker and the insurance company. Some MGAs only work with a few carriers and thus want their brokers to do the same.  There it's important to work with a broker who has access to a full line of insurance companies and is not just one or two.

Other discussions about Primerica

Comments have been closed on this entry as the discussion is mainly circular at this point.

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567 Comments

  1. Phil 12/22/2010 at 9:08 pm

    I’m sorry Bob but you appear to be disgruntal because you never made it up to RVP. From what I’ve been told, your promotion at Primerica is based on your production and that of your team.

    Unless my information is wrong, the fact that your RVP introduced someone between you and him would not negatively affect your promotion if you ran the numbers. Sure, it’s good for that guy and it’s totally unfair given that you build yourself a team, but I’m not clear as to how it it adversaly affects you in being promoted.

    Have you thought about going transfering to another RVP in your area that was more professional than the guy you were under?

  2. Observer 12/23/2010 at 3:13 am

    A person in the know can become financially independent by generating high short term income/personal production. Have you not been educate about investments? Think outside the box.

    When you are denied renewals or denied access to products which may be of potential benefit to your clients you are having your potential future income restricted. Let me ask this. If you as PFS agent leaves the company what can they take with them after all the work they have done?

    PFS isn’t a scam or bad company just know your rights going in and coming out because if you ever leave they will inform you of your contractual obligations. While many have a personal and emotional bond with the company for them it’s just business.

  3. Phil 12/23/2010 at 6:51 pm

    What can someone take with them when they leave a company? Generally, nothing. I used to have a financial advisor who moved from one company to another. When he moved, he tried to get me to move my money and insurance on the basis that he was now offering better products. I didn’t move on the basis that the products I had suited me fine and I didn’t see the need to change to give him a new commission.

  4. LSM Insurance 12/23/2010 at 8:31 pm

    Most independent brokers own their book of business. This is a benefit to the broker and the client should the broker decide to switch firms.

  5. Bob 12/23/2010 at 9:17 pm

    Phil, I can see you did read my post very quickly and you didn’t understand what I wrote. Again, but very short: In regards to rules, at that time when I was with Primerica, to qualify for RVP, you needed at least 2 guys at 70% and specific production constantly for 3 months.
    I had 2 guys at 70% direct under me and 2 guys at 50% direct as well. Phil, that was at the moment when I quit. Now, try to understand: before that I had only 1 guy at 70% and 3 guys at 50%. One of them got promoted to 70% and right away my “boss” placed his friend between us. I knew I am not going to survive 3 months to do that required production. I knew, the “boss” will do something to kick me out and all of my team will automatically receive his friend. Do you understand now? As I wrote in my first post, I was a witness of a lot of strange things happened, even RVP’s was fired and who knows for what reason. Three months is a long time, and a lot of ugly things could happen to get rid of me.
    Phil, in regards to be transferred to another RVP… Yes, I did that. First of all, I had to wait 6 months to do so. After 6 months, when I went to another office, it was very hard to hire anybody – my market was already used and doing this as a full time job (legally at that time) was not enough income to support my family. I had no choice, but to quit again and find a normal job.
    Phil, for a lot of guys, Primerica or any MLM is a great way to go to change your live, but you have to watch for who you are working for. You have to be very careful, so you don’t waste your time like I did. Over two years I was dedicated to Primerica, I was working very hard and in 1 day, everything went to the garbage!!!

    Regards,
    Bob

  6. Phil 12/23/2010 at 10:02 pm

    OK but why is it a benefit to the client if the Broker changes firm and asks the client to cancel his insurance policy only to purchase a new one at higher rates?

  7. Observer 12/24/2010 at 5:10 am

    Phil look at it from a business stand point. You sell, recruit and train but leave with nothing. As a whole who does the contract benefit you or the company? When an agent leaves PFS do they still request all agent personally paid for marketing materials returned? LOL..

    Hey as I say it’s Ok as long as you know it. Read the IBA and know your rights going in and coming out.

  8. LSM Insurance 12/24/2010 at 10:55 am

    Agreed that would not benenfit the client. But an independent broker who owns his/her book of business would have no extra incetive to this as the since he/she remains the same client relationship. The client relationship belongs to the broker and not the firm.

  9. Phil 12/24/2010 at 2:20 pm

    Observer,

    My point exactly, look at it from a business perspective: You work a year or two to build up a brokerage (RVP). Then you work another year or two to promote a few RVPs. Then you can sit at home and be semi-retired while collecting an income and only work a few hours a week. That’s if you build your Primerica business on recruitment and keep your licenses active for the rest of your life.
    Ultimately, you have three main types of successful Primerica agents:
    1- The full-time people who work at building a business based on recruitment (those reach RVP fast and succeed at creating a lot of passive income within a few years);

    2- The part-time people who work to supplement their income (those will only reach RVP if they decide to really wrap their head around recruitment);

    3- The full-time people who base their business on sales (those will only survive if they focus on investments – just like insurance agents out of Primerica will only survive if they focus on selling permanent products). However, they won’t create a passive income stream quickly. It will take them many years.

  10. observer 12/25/2010 at 4:07 pm

    Ok Phil I agree but then there’s the agent agreement and compensation. If you build it they own it. Agents try to promote products and service but the meat is in the system.

    I don’t really know about Canada but outside of PFS there are other opportunities that allow more products and better compensation.

    Do an open minded comparison between the compensation and contract between marketing your legal plan through PFS and going directly with Pre-Paid legal. Both of those product lines are available in the US and Canada.

    Today many agents sell term along with other products outside of PFS. Just because your RVP tells you something doesn’t make it true. that’s the way I used to think until I did an open minded research on carriers and the industry. It’s in their best interest to lead people in a way of thinking. It’s business.

    Ask yourself this. Why does PFS offer a MET product? Do they not offer a permanent products? Why is it Ok to shop personal lines and not life products? Hmmmmmmmm

    Just as another point. Products such as LTC and disability do pay renewals. When I was at PFS there were things I didn’t know that I didn’t know.

  11. Xprimerican 12/25/2010 at 4:26 pm

    Phil,

    I can see some valid points you are making, but the truth is Primerica chooses to offer mediocre products. The reason is very simple. The system allows them to recruit someone, sell the recruit products, sell the recruits warm market products, then repeat the cycle. This is why (here in the US) Primerica doesn’t even care to guarantee their premium over 20yrs. So those reps are selling expensive term to their family & friends (when they could go out and get 2 or 3 times the coverage for the same premium dollar) and going unchecked because Uncle Bob would never believe his little nephew would sell him crap.

    As for the business let me ask you a very straight forward question. Do you have ownership in Primerica? Do you own your own solution number? See everything you are saying sounds great, but are you speaking from experience or are you merely repeating what you have been told at countless “trainings”.

    The truth is I was making a very nice residual income while in Primerica. Nice enough that I was able to focus on recruiting and not worry about selling products. It was very nice & making nearly $100k doing nothing was awesome. In the end it all came down to my integrity. I am the type of person who wants to offer the best options to my client and Primerica is NEVER the best option for the client. As soon as I realized this I resigned and went independent & built my own agency. (Structured similar to Primerica.) What fascinates me about PFS reps (myself included when I was in) is how loyal they are to the company. In the end the company is peddling mediocre products off of the relationships of their recruits. Seriously Primerica could step up to the plate and provide the most competitive products in the US, but they wont. The reason is simple….. money! It’s sad, but Primerica is nothing like the model Art developed. It’s funny how back then Art focused on providing the most competitive product & take care of the sales force. Neither is being done in the modern Primerica.

  12. I 12/26/2010 at 9:57 am

    Just food for thought. The attached is from Wikipedia.

    “Primerica’s licensed agents who are licensed in life insurance earned an average of $5,156 in compensation during 2009, or an average of $429.67 each month not accounting for taxes. The income level that an agent achieves varies based upon the licenses obtained, “contract level” at which the agent receives commissions and the amount of personal production and commission-based businesses written in the field as well as the size and activity of an agent’s organization. This is also dependent on whether the agent is an RVP and is also licensed in securities, debt, and other financial parts of the company.”

  13. James 01/03/2011 at 10:22 pm

    I’ve joined Primerica 4 months ago in Canada as a part time job. I am now a senior rep fully licensed in life insurance AND mutual funds. I’m really looking forward to 2011 so that I can quit my current full time job and do this full time.

    I remember reading this web site shortly after I joined the business. I would like to put my 2 cents like everyone else.

    As for buying life insurance from Primerica or other companies, I can’t only speak from my life experience. This is what it is.

    1. I was over life insured with 1 million dollar benefits when I needed 625 000$. Since this is only term, I prepared an investment program to be self insured by the time I retire. That’s why it’s term.

    2. I had disability insurance when I was an independent contractor. Then I moved to a full time job with benefits and forgot about it. Joining Primerica made me realize that I spent 2000$ for no reason since I now have it at work, so I canceled it and save monthly payments.

    3. I knew nothing about getting out of debt. It seems that they never went away although I had 6 digits family income. Primerica educated me about how to be out of debt, and stayed out of it.

    4. I had no retirement investment what so ever. Primerica showed me how I can retire with 1.4 million dollar when I’ll be 60.

    5. I have an investment for my daughter’s education, but not enough. Primerica showed me the numbers to make this work.

    6. I didn’t have a Will. Got pre-paid legal and got one with the subscription.

    7. I got the debt watcher program they have to check my score rating. I had a 11K credit card that I canceled in 2006 that was still opened. That was seriously not helping my liabilities so I called them to have it closed.

    … So that’s the client side. As you can see, Primerica fits perfectly into my life.

    As for the business side, my RVP is really nice to me. I spent Christmas to his place with other reps and we had a great time. He really believes we can make it, and really motivates the hell out of us. My peers are good human beings, and love being with them. I believe their Network Marketing works, and it will work for me as well.

    Here’s what I will do. I will get back into this forum every time I move up with the company, and let you know how it goes.

    Until then, believe in yourself and you can achieve anything you want.

    Good Bless…

  14. Phil 01/04/2011 at 1:59 pm

    XPrimerican,

    I can’t comment on what Primerica offers in the USA because I’m Canadian. In Canada, Primerica insurance is by far a better product for a family and it is very competitive in price(and even cheaper than most insurers posted on this site – even if PFS bundles it’s riders in the policy).

    If you don’t believe me, get a quote from your broker and then contact a Primerica Rep.

  15. Observer 01/04/2011 at 2:12 pm

    James here’s just a couple of thoughts. If your going to go full-time at some point it might be a good idea to reconsider the dropping of the disability policy. I don’t fully know the rules for companies in Canada but it’s very different going through underwriting for self-employed and an employee.

    Next consider looking at getting the legal plan directly from Pre-Paid legal rather than from Primerica unless you have total loyalty to Primerica rather than doing what’s in the best interest of your family. Something also to consider is for the price of one PFS legal plan you just might be able to add the Pre-paid legal Identity Theft Plan which could help you free up a bit more money to invest.

    How in the world can anyone convince you that you were over insured? Are you married with kids? Did they also add the increasing benefit ride to your policy? Think about it for a moment. God forbid if something happened to you today which check would you rather be given to your beneficiary? The other check or the P. Life check? Now to go another step. What would happen to your business?

    So you see your ties with PFS would end per contract at your current level but your beneficiary would get less of a death benefit.

  16. LSM Insurance 01/04/2011 at 3:56 pm

    Phil – regarding your point about Primerica having lower rates than most of the companies posted via our instant quote software.

    Agreed there are large discreptencies among carriers in many instances. That’s the advantage of working with an independent broker he/she can find the insured the best plan at the best price without a bias towards any paticular company.

  17. Rosey 10/05/2012 at 8:32 am

    Do the Return of Premium plam give you all your money back – how can the insurance co. do this and still make money. There must be a catch

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