Real, Unbiased Primerica Review from an Ex-MLMer
Table of Contents
- The United States of Primerica
- Primerica Company Overview
- How Primerica Started
- What Primerica Does
- Pros: Are Primerica Products Good?
- Cons: Why Primerica is Bad
- Compensation Plan: Can Primerica Make You Money?
- Bottom Line
The United States of Primerica
MLM companies like Primerica have been around so long now, they’ve become a normal part of US culture.
But long before there were MLMs, there was another kind of annoying salesperson:
The Insurance Agent.
To be fair, they’re obviously not all like Needlenose Ned and I actually like my personal insurance guy.
But if I get the chance to show a Bill Murray clip, you better believe that I’m gonna take it.
Every. Damn. Time.
That said, it turns out there’s a company that has managed to combine relentless insurance sales with aggressive MLM sales:
And they’re doing it very well: Primerica’s annual revenue was a cool $1.69 billion back in 2017.
That’s some serious scratch.
In addition to insurance, Primerica also offers investments, debt consolidation, and financial advice such as “I highly suggest that you buy more of our sh*t”.
Still, the track record of Primerica is undeniable and suffice to say this MLM juggernaut knows what they’re doing.
And they’ve taken their own advice to heart — building a secure financial future for the company to the tune of $9.1 billion in term life insurance.
For years, Primerica was also part of the same company known as Travelers and Citigroup.
But while you might be familiar with Travelers Insurance, you probably don’t know jack about Primerica.
Well, it’s your lucky day cuz that’s where I come in:
You’re welcome, ‘Murica.
Primerica Company Overview
Primerica is based in Duluth.
Not Minnesota but Duluth, Georgia — where it gets so hot that locals have a saying: “Duluth, Duluth, Duluth is on fire!”
But Duluth is also home to Primerica which mostly sells “term life” insurance and originated the slogan, “Buy Term and Invest the Difference.”
Simply put, term life insurance is temporary and only lasts for a set number of years that you choose up front e.g. 10, 20, or 30 years.
Term life policies only give insurance against the loss of life during the chosen term, and once it has expired, you can either renew or end the policy.
On the other hand, permanent or “whole life” insurance provides lifetime coverage against the loss of life, but also includes a cash-value savings component that can accumulate interest.
The catch is that whole life insurance costs a helluva lot more than term life and offers a very small rate of return.
Dave Ramsey does a pretty good job explaining this concept if you want more info:
Besides promoting term life, Primerica also bill themselves as “a Main Street Company for Main Street North America,” whose goal is to create more financially independent families.
In other words, while many investment companies focus solely on obtaining wealthy clients with lots of money to invest, Primerica is all about helping the middle class.
But let’s rewind the clock and see how it all started over 40 years ago…
How Primerica Started
A long time ago in a galaxy far, far away….
Primerica was founded in 1977 by Arthur (“Art”) L. Williams Jr.
The same year the first Star Wars movie came out.
And just like Darth Vader, I should warn you that Primerica’s history is a little bit… complicated.
After his father passed away of a sudden heart attack in 1965, Art Williams learned that his family was left underinsured due to his father having a whole life insurance policy that wasn’t worth much.
Art was then introduced to the concept of term life insurance, which was a lot cheaper than whole life but wasn’t well known at the time.
A man on a mission, he experienced immediate success but eventually grew tired of working for insurance companies who had traditional and limiting corporate structures.
In February 1977, A.L. Williams & Associates was born and the company was based on a simple philosophy:
Buy Term and Invest the Difference.
The basic idea was to show middle-America that buying term life insurance was not only better and much less expensive than whole life…
But also how they could invest what they saved into mutual funds, annuities, etc. to build long-term passive income.
Under Art’s guidance, the gamble paid off and the following decades saw A.L. Williams & Associates undergo an extensive series of acquisitions and mergers.
Don’t worry, I’ll just go over the highlights so bear with me for a minute.
- In 1980, A.L. Williams joined up with the Massachusetts Indemnity and Life Insurance Company, otherwise known as MILCO.
- MILCO was a subsidiary of PennCorp Financial, and Penncorp in turn became a subsidiary of the American Can Company in 1983.
- Four years later would change their name to Primerica Corporation.
Clear as mud? Cuz we’re just gettin’ started!
- Primerica kept acquiring more subsidiaries until they themselves were acquired in 1988 by Commercial Credit, who kept the Primerica name.
- In 1989, Primerica went public on the New York Stock Exchange (NYSE) and officially changed its name to “Primerica Financial Services” or PFS.
- Four years later, Primerica acquired Travelers Insurance which became known as the Travelers Group – which finally merged with Citicorp in 1998 to create Citigroup.
A dozen years later in 2010, Citigroup decided to sell off Primerica through an initial public offering (IPO) and by 2011, Citi had completed its separation.
Today, Primerica is still publicly traded on the NYSE (PRI) and is mostly owned by large financial institutions such as Fidelity and Vanguard.
Well that was simple, huh?
Now that my head’s about to explode, let’s explore what products Primerica actually offers.
What Primerica Does
Primerica’s bread and butter is their Term Life Insurance.
First the good news:
If you die within the term you bought the life insurance for, your policy will definitely pay out so your family will receive the money they deserve.
Plus, as I mentioned earlier, term life insurance is a lot cheaper than whole coverage.
So Primerica’s flagship product actually does exactly what it’s supposed to, which already puts it above many MLM companies whose products are questionable at best.
However, there are a few downsides.
First off, while their term life insurance does cost less than whole coverage, it’s still more expensive than buying term life insurance from most other companies.
The above quotes from ValuePenguin.com, show them being 11-29% more expensive than the average term life company.
Secondly, Primerica is notoriously bad at insuring anyone who happens to be in a high-risk bracket.
Basically, if you have pre-existing conditions and ain’t exactly in the peak of good health, you may find it difficult to get Primerica to sell you insurance.
And this is especially problematic because their term insurance policies offer no conversion options to whole life insurance.
See, most other insurance companies – hell, pretty much every reputable term life insurance company – allow the policy holder to convert their term insurance to a permanent policy without needing to underwrite it again.
Many folks start by buying term insurance, then might have a change in life circumstance and decide they want the reliable coverage of permanent insurance.
And as long as your company isn’t Primerica, you don’t need to reapply — you can just convert your term insurance to permanent coverage and you’re all set.
And once again, if you’re no longer in great health, Primerica may not cover you at all.
(Or if they do take you, expect to pay a LOT more.)
In short, Primerica’s life insurance seems to be a good product for healthy peeps, but it may be pricier than you can get elsewhere.
Legalshield is an MLM company with its own list of issues that I may address one day in its own post, but suffice to say their “legal protection” is reportedly sub-standard.
Finally, Primerica’s DebtWatchers program involves a partnership with Equifax, giving customers access to credit monitoring, budget tracking, and tips to help pay down your debt.
That’ll save you almost $200 per year, which might be more helpful to a person in debt.
Pros: Are Primerica Products Good?
✓ Main product (term life insurance) actually delivers.
This is a nice change from many MLMs who are hawking fountain-of-youth creams or weight-loss snake oil.
But Primerica’s products all generally do what they’re supposed to.
Their term insurance covers your butt and pays out if you die, and their mutual funds are real investments which could make you money long-term.
✓ High market appeal.
They also wanna save money.
After all, who doesn’t want their family to be taken care of, if something bad happens to them?
It’s also not a bad idea to have a long-term investment strategy in place.
✓ Been around a long time.
If you’re an MLM company and have lasted for over four decades, congratulations – you’re in rarified air.
Can’t forget that they were once part of the same group as Travelers Insurance and Citibank.
And this reputation is clearly worth something because Primerica was named one of Forbes 50 most trustworthy companies in 2015.
✓ A little charity goes a long way.
They also encourage their employees to donate to charity.
In fact, the combined might of their employees raised half a million dollars for the American Cancer Society in 2017 and 2018.
Cons: Why Primerica is Bad
✗ It’s an MLM.
Despite having legit financial products, at the end of the day Primerica is still a network marketing company.
Which means to be truly successful, you’ll need to recruit a large team below you.
Not my cuppa tea but whatever works for you boss.
✗ High-priced insurance.
In order to build in enough profit for the company along with you and your upline, Primerica’s products typically cost more than comparable financial products elsewhere.
This is one of the big reasons that Primerica does not offer any online quotes.
Customers can only get Primerica’s prices by talking to an agent like you, and it’s your job to convince them to buy immediately without shopping around.
This may be easier said than done because…
✗ No conversion options and no high-risk individuals need apply.
While Primerica does offer term insurance that will pay out if you die during the specified term, the fact that it can’t be converted to whole coverage is a bummer if you change your mind.
They also won’t accept high-risk individuals meaning your physical condition better be tip-top if you wanna get insured by them.
✗ Legal issues.
In 2014, Primerica had to set aside $15.4 Million to settle 238 lawsuits from Florida public servants.
But this hasn’t stopped Primerica from continuing to flourish, taking on well over 100,000 new sales recruits annually, and earning annual revenues of nearly two billion dollars.
✗ License to Bill.
By law, Primerica’s sales reps are not allowed to sell insurance and securities without a license.
This means that in order to sell Primerica’s products, you’ll need to pass an actual licensing exam.
As a bonus, this will take at least 90 days, during which you’ll have to pay to be a Primerica member but can’t actually sell all their flagship products.
Time to hit the books!
Compensation Plan: Can Primerica Make You Money?
Given that Primerica won’t give online quotes for how much their insurance costs, it’s not surprising to learn that they don’t post their compensation plan online either.
Which is really annoying.
But don’t worry, I found the numbers for ya anyway.
So bite me Primerica 🙂
Now, the most important number in any MLM is how much commission you make as an entry-level representative, since most MLM members never make it beyond entry level.
And for Primerica, your entry level commission is… well, nothing at first.
See, the trick about Primerica is that until you are licensed, you can’t actually sell their main insurance or investment products.
The video below isn’t the greatest, but it’s the best I could find to explain their basic comp plan:
According to that video, you’re technically allowed to sell some of Primerica’s lesser products while waiting to get licensed (can’t confirm this) but the bottom line is, you need to get licensed before you can make any real money.
Now let’s talk turkey.
- It’s gonna cost you around $100 just to sign up for Primerica in the first place.
- If you want access to their members-only website, Primerica Online — that’s another $25 per month.
- According to the company, Primerica Online is “an entire suite of tools specifically created to help you succeed at building a lasting and rewarding business” which includes support resources, your own Primerica email address, and a personalized professional website.
But keep in mind that it normally takes at least 3 months to get your required licenses.
If and when you pass your licensing exams, you are now an official Primerica Representative and entitled to basic commission levels.
For insurance plans, this is 25% of the first premium for a 25-year plan. So if the premium is $1000 per year, you will earn $250 upfront.
That’s actually a pretty nice payout for making one sale.
However, it’s worth noting that if a customer ever defaults on their premium payments down the line, Primerica will hit you with a chargeback for that money.
In other words, you won’t really know if you get to keep all your commission money for another 25 years.
That said, most folks that want to have life insurance are doing it for their family’s protection, so unless you’re signing up those who really don’t want or need it, your defaults should be low.
- For investments, the Representative commission is 30% of the dealer cut, which is usually a small number like 4.5%. So if someone invests $1000, you’ll make around $13.
- For loans, the Representative commission is 0.312%. So if you manage to sign someone up for a $10,000 debt consolidation loan, you’ll make $31.
Those numbers are a lot smaller, but at least they don’t come with the potential for chargebacks.
Once you directly recruit 3 new associates (“3 Directs”), you qualify as a Senior Representative.
While this slightly bumps up your personal commissions (e.g. 35% instead of 25% on insurance sales), the real bonus here is now you can receive bonuses from your new recruits below you.
The first way you make money from your downline is your standard overrides.
In this case, your override is 10% so if the Representative you recruited sells $1000 of premium insurance, you get $100 (subject to chargebacks).
While very few sales reps will ever see the highest levels, District Leaders (who sell $2500 of premiums in a single month and have a Senior Rep below them) get a 50% commission on their annual premiums and a 15-25% override.
Division Leaders selling double that get another 10% kick, Regional Leaders hiring multiple Division Leaders earn an additional 10%, and at the top of the food chain is the highest level:
Regional Vice Presidents who are basically treated like gods in the Primerica universe.
Primerica Insurance Commissions
|Associate||-||-||Sign up with Primerica|
|Representative||25%||-||Get your life insurance license|
|Senior Representative||35%||10%||Recruit 3 new Associates, complete your FNA|
|District Leader||50%||15-25%||Promote 1 new SR, generate $2500 in premiums|
|Division Leader||60%||10-35%||Promote 1 new DL, generate $5000 in premiums|
|Regional Leader||70%||10-45%||Promote 2 new DLs, generate $7500 in premiums|
|Regional Vice President||95%||10-70%||Promote 6+ DLs, $20,000 in premiums, get securities license|
Besides getting overrides, Primerica has a second way you can make money from your downline which is unique and a lil shady in my arrogant opinion.
See, for those first 90 days, your newly recruited associates can’t legally sell anything.
But they’re still paying Primerica and are supposed to be learning about the business.
And the way Primerica tells them to do that is by watching the expert who hired them.
That means YOU.
I actually found an unofficial “Fast Start Manual” from a Primerica rep that shows what I mean below:
Long story short: you get to make money from selling to your recruit’s best leads.
Sounds good in theory, but don’t forget that it works both ways – your upline will also get the chance to sell to YOUR best leads while you’re in training.
So it’s kinda like being an apprentice – you gotta pay your dues and earn your way up the ladder.
And of course, the higher you go, the better the money gets.
According to a Primerica-affiliated website I found:
When representatives earn $50,000 in a 12-month period, they’re awarded a special watch. When they reach $100,000 in income, they’re rewarded with a special ring that signifies membership into the exclusive Financial Independence Council. New diamonds are added to the ring with every additional $100,000 they earn.
Long story short, success breeds success.
And big frickin’ rings.
Primerica: Bottom Line
|Primerica's main product (term life insurance) is something most people need and actually delivers.||Primerica is still a network marketing company which means you'll need to recruit in order to make any real money.|
|Not only do they provide protection for you and your family, but Primerica also offers long-term investment strategies.||Primerica's insurance typically costs more than comparable financial products, does not have conversion options, and only applies to low-risk individuals.|
|They've been around for over 40 years and are a rock-solid company overall.||Like most MLMs, they have ongoing legal issues and lawsuits.|
|Primerica and its employees donate a significant amount to charity.||In order to sell Primerica's main products, you'll need to study for and pass an actual licensing exam.|
So, will Primerica leave you Primed for Profit?
Depends on who you ask.
Primerica may not offer any convenient compensation charts online, but they are legally obligated to offer a little information in the form of this disclosure statement.
And there’s a lot more information in their annual report.
Clockin’ in at 188 pages, it obviously wasn’t meant to be read by humans.
But consider me a helpful explanation robot, beep boop.
Here’s some interesting numbers from page 8 of the annual report:
In 2017, there were 303,867 new recruits, but only 48,535 newly licensed sales reps.
That means only 16% of Primerica recruits ended up passing the licensing exam in 2017.
That’s… pretty bad.
But then again, it actually makes sense.
Passing an insurance exam probably ain’t easy.
I’m gonna guess it wasn’t as simple as getting my GED (good enough diploma) after dropping outta high school.
In any case, you can’t sell any Primerica insurance without passing the exam.
Here are some more numbers for ya:
Primerica had a total of 126,121 licensed reps in 2017 and 116,827 in 2016.
That means they added roughly 9,300 licensed reps overall.
But wait a minute, didn’t we just say that they added 48,535 newly licensed reps above?
That’s almost a third of the entire licensed sales force!
Here’s the thing:
The reality of network marketing is that to make any REAL money, you gotta be constantly building your downline.
Cuz if 1 out of 3 licensed reps quit every year…
And you need to have 3 reps in your downline to earn any override commissions…
Well, I think you get the point.
(Isn’t math fun?)
Still, some people manage to make this business work.
A few are absolutely crushing it.
But if you average in all the top million-dollar earners in 2017, Primerica paid out an average of $6,030 to their licensed sales reps.
That’s about $500 per month.
Here’s the thing:
If you’re one of those rare individuals who’s good with numbers and has no problem taking a licensing exam, why not just go get a job selling insurance?
Actual insurance sales jobs pay, on average, a helluva lot more than $6k per year.
Like, 8 times as much.
On the other hand, if you’re looking for a way to make money that doesn’t require selling insurance or recruiting your friends and family, check this out.