By
James
Updated on
While scouting for work-from-home jobs, you must have come across Primerica– a life insurance company that sells financial investment and insurance products.
Since then, you might have been thinking about whether you should sign up as an independent agent and earn some commission by selling its products and services. Of late, rumors are making the rounds that Primerica isn’t legit; rather, it’s a scam.
Perhaps, you’ve scoured every website you could to find out if Primerica is a scam or a pyramid scheme. But to your dismay, you couldn’t find anything that divulges whether it’s a legitimate company– right?
In this guide, we’ll get down to the nitty-gritty of Primerica and help you figure out if it’s a legitimate life insurance company, a pyramid scheme, or a scam. So, make sure to read it until the end.
Shall we dive in to explore the truth about Primerica, then?
What Is Primerica?
As is understood, Primerica is a life insurance company that was founded in 1977 with the aim of helping middle-income residents of America with its financial products and services. Like other life insurance companies, It doesn’t merely focus on selling its products; instead, it offers people employment opportunities to work as its sales agents.
Based in Duluth, Georgia, this life insurance company relies on multi-level marketing to build its workforce and market share. Similar to other multi-level marketing businesses (MLM companies), the most successful Primerica agents aren’t those who sell its products the most. Rather, those who hire an overwhelming number of sales representatives to sell insurance services such as term life insurance and any regular life insurance policy. It has all the characteristics of a multi-level marketing scheme that you can expect from other life insurance companies.
As Primerica is a kind of “Buy Term Invest The Difference,” it offers only term life insurance and actively crusades against other life insurance policies.
Products And Services Offered By Primerica
Interestingly, the company sells products from other vendors as well, the majority of which are repackaged services like pre-paid legal services and financial investments. Both services are a part of its sales and advertising process.
So, let’s take a look at them.
1. Investments
The financial investment sales department of Primerica handles all annuity and investment-related business. In this system, the company retains nothing proprietary and is essentially a broker for larger insurance and mutual funds companies.
When it comes to this setup, there’s nothing that sets Primerica apart from its competitors, namely OppenheimerFunds, Fidelity, and American Funds. What’s more, the quality of mutual funds is similar to what you’ll get elsewhere.
2. Term Life Insurance
As previously mentioned, Primerica is a financially strong company that offers term life insurance products. But what’s unknown is that its term life insurance policy is 29% more expensive than the sector standard.
3. Financial Needs Analysis
This marketing tool, Financial Need Analysis (FNA), is used by Primerica alongside other companies in the life insurance industry to reveal gaps in peoples’ investment plans and insurance coverage. This, in turn, allows every Primerica agent to identify areas to sell you its products and services.
4. Long-Term Care Insurance
Despite being obsolete, Primerica brokers long-term care insurance for Genworth Financial. Though it isn’t the most profitable product for the company, it does supply insurance agents with an extra product that they can sell to prospective customers.
To long-term care policyholders, Primerica offers a day-to-day amount of services that help them with daily chores, including eating, dressing, and bathing. As such, you can customize the insurance plan as per your needs by choosing from a range of benefits and care options.
5. Auto And Homeowners Insurance
The Auto and Homeowners Insurance (Property & Casualty insurance sales) of Primerica, also called Primerica Secure, serves as a lead generation firm for Answer Financial. Independent agents who sell this insurance will get a small deduction from their earnings which goes to Answer Financial, for whom Primerica works as a referral service.
6. Primerica Debtwatchers
Relatively a new addition to the range of products offered by the company, Primerica has joined hands with Equifax to supply an online tool that allows users to evaluate their debts. Not just that, but it also provides them with solutions to help them pay off the amount owed.
This program heavily focuses on debt stacking and uses Equifax credit reports of users to design a strategy that will help them repay their debts as quickly as possible.
7. ID Theft Defense
ID Theft Defense is a product offered by Pre-Paid Legal Services Company that is similar to LifeLock in nature. Financial institutions have occasionally provided this type of service to their clients either at reduced charges or for free.
8. Primerica Legal Protection Program
Did you know that Primerica also offers Pre-Paid Legal Services products? Legal Shield or Pre-Paid Legal is a company that offers elementary-level legal services at a discount for lawyers in its network and as a monthly membership.
How Can You Earn Money With Primerica?
Like others, Primerica is a multi-level marketing company where you can make money in two ways–
- Hiring other members and making them insurance agents
- Selling its product (term life insurance) to others
Note that you’ll have to pay $99 to become a part of Primerica, which is a one-time fee. Afterward, every Primerica agent has to pay $25 every month to keep working as a recruiter, so it isn’t really a no-investment business.
Now, you must wonder how Primerica compensates its employees for selling its products– right? Take a look at the compensation plan of Primerica.
Primerica Compensation Plan
So, how does Primerica Life Insurance payout its employees? As per the business model of Primerica, there are four ways you can earn as an independent agent of the company, which are as follows:
1. Insurance compensation plan– Whenever a Primerica insurance agent sells a term life insurance program, they earn a small sum of money.
2. Differentials from downline insurance sales– Anytime a Primerica agent helps their downlines sell term life insurance, they’ll be rewarded with some money.
3. Overrides on the insurance sales of downlines– In this multi-level marketing company, you’ll receive a 10% commission for sales made by your downline.
4. Commission on other products– Besides term life insurance, Primerica agents receive commissions for selling other products of the company.
The Good About The Company
Some positive points about Primerica Life Insurance Company are as follows:
1. Low-Cost Multi-Level Marketing Opportunity
Primerica charges a sum of $99 to sign up as its independent agent, after which you’ll have to pay $25 every month. However, you must do your research before signing up as an independent agent at Primerica.
2. Rigorous Screening Process
Anyone who wishes to become a part of Primerica will have to go through a rigorous screening process. The screening process is held to figure out if the applicant possesses the skills to sell its products and services.
3. No Need To Buy Products Or Keep Inventory
As a part of Primerica, you need not buy products that you have to sell. All you need to do is pay $25 every month to be an active agent of Primerica.
The Not-So-Good About Primerica
Here we’ve enlisted the negative aspects of Primerica, which you must know before making a decision.
1. Complaints About Its Products
We won’t beat around the bush, but the products of Primerica haven’t received much praise from its customers. Some genuine sites like Glassdoor have reviews where people have complained that the company doesn’t pay insurance money despite the death of the insured member.
Another website where you can check negative reviews from people is Consumer Affairs. Before you sign up at Primerica as an independent agent, be sure to check reviews from these websites.
2. Controversy And Lawsuits
Did you know that in 2014 Primerica had to settle 238 cases for which it had set aside $15.4 million? Now that’s a whopping number– so if this doesn’t ring the alarm bell, we aren’t sure what will!
Takeaway– Is Primerica A Pyramid Scheme Or A Scam
So, what do you think– is Primerica a legitimate company or a scam?
Its products aren’t bad, but the prices of the policies rise randomly, and mutual funds devour profits due to commissions. Though it meets BBB accreditation standards, it isn’t BBC-accredited (Better Business Bureau).
The only way you can make money at Primerica is by convincing people to sign up as its independent agent– so, it’s a pyramid scheme in disguise. Of course, even that isn’t easy– you’ll have to lie to them about how great a company it is!
Even though Primerica isn’t a scam, multiple reviews at numerous third-party websites suggest that it delays the process of settling death claims and increases insurance payments without warning customers.
The bottom line is Primerica isn’t a trustworthy company, so we suggest you look for other ways to make money from home. Even then, if you decide to be a part of Primerica, we suggest doing thorough research before joining the company.
About The Author
Reviewed by
James
James is a writer who is a self-confessed kitchenware and coffee nerd and a strong advocate of Sundays, good butter, and warm sourdough.
Related Posts
[wp post shortcode here]