Primerica has offered insurance and other financial services since 1977, initially under the name AL Williams. It was incorporated as Primerica in 2010 as a financial services company known for its term life insurance plans, headquartered in Duluth, Georgia.
Currently, Primerica offers 9 primary solutions: Financial Needs Analysis, Term Life, Investments, Mortgage, Debt Solutions, Auto and home, Pre-Paid Legal, Identity Theft and Vivint (Security and Smart homes company). Their term life insurance includes two options, TermNow and Custom Advantage, accompanied by several riders, which are add-ons for the base insurance policy.
Apart from its products, the company is known for its business opportunity model, where representatives recruit other representatives to gain commissions based on the recruit’s sales and their own. If you want to join the company as a representative or buy products from one of their agents, read this article to uncover if Primerica is a scam.
What is a Term Life Insurance?
A term life insurance is a type of life insurance policy applicable for a specified number of years or “term”, for example, 10, 20 or 30 years. If the policyholder dies within the term and the policy is active, the death benefit is paid out to the beneficiary.
The premiums for term life insurance are generally cheaper when compared to those of permanent life insurance policies such as whole life or universal life.
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Who uses Primerica?
Customers
Primerica is targeted at middle-income families in the United States and Canada and is used by more than 5.7 million policyholders, per their website. Customers can purchase Primerica insurance policies only through its representatives.
Representatives
In addition to its financial products and services, it also claims to provide people with the opportunity to create a stream of income by becoming a sales agent or representative for Primerica. New agents are recruited via existing agents, and the recruiting agents earn commissions from their sales and sales from the downline of the agents they recruited. This model is similar to the method used in multi-level marketing (MLM), where existing members of a direct sales company are encouraged to sell its offerings to others and recruit new members to sell the products to gain commissions once the members they recruit make a sale.
As part of the disclosures on their website, Primerica terms their representatives as private or independent contractors and not employees. Under their Business Opportunity section, they advertise earning money on the side as a part-time or full-time opportunity by selling term life insurance, securities and various other financial products.
Primerica sales representatives must obtain a license before selling many of the products. In addition, they must complete an Independent Business Application (IBA) and pay a one-time fee of $99 in the US and 103$ for Canada, as mentioned on the Primerica website.
Representatives are encouraged to buy a full-service subscription to Primerica’s intranet called Primerica Online (POL), priced at $25 monthly for the US and $28 for Canada. The website states that POL provides reps with tools and resources to help them grow their business.
What is multi-level marketing (MLM)?
In a multi-level marketing (MLM) model, a company relies on independent representatives to sell its products. These representatives form a distributor network and are often incentivized to increase their network by hiring more representatives as part of their team.
The term multi-level comes from the structure where a direct marketing company hires a distributor, being the first level. They hire 2 people under their network. These 2 distributors form the second level and hire 2 more people each, which forms the third level.
Typically, distributors are incentivised to hire more people as part of their team by receiving a percentage of commission from sales made by people they recruit and the people the recruits, in turn, recruit.
Primerica reviews: Scam or not?
Owing to the similarity Primerica’s marketing structure has to MLM and the lack of online quotes available for their products could be why there are claims over the internet about the company being a scam. However, many online sources, including the Forbes Advisor and Consumer Affairs, deem the company legitimate, albeit with a lack of transparency about product pricing.
The company gains credibility by being publicly listed on the New York Stock Exchange. It is rated A+ by the Better Business Bureau (BBB) with 2.53/5 stars.
The question arises for representatives as well. If you are to pay a license fee to sell insurance and other financial products and are looking for higher commissions, why not work with a broker instead?
So, is Primerica a scam? It is not.
Although Primerica is a legitimate company, the several complaints against it all over the internet suggest that it is wise to perform due diligence. As a customer and representative, compare Primerica’s offerings with those of competitors. Forbes Advisor suggests customers choose independent agents offering policies and products from competing companies. This gives you more options and a way to compare prices rather than buying from a representative with limited offerings restricted to one company.
As per the personal experiences of people from Consumer Affairs and BBB reviews, being a representative might not have the benefits promised on the Primerica website. It might take a long time before a representative can make a decent commission on their sales and the sales of the representatives they recruit.
Before you consider buying Primerica products or joining the company as a representative, thoroughly review their website and research reviews by past and current representatives. If someone in your family or friends is talking to you about recruitment, ask them questions about commissions, sales structure and initial investment before joining the company.
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Primerica has not sold Custom Advantage or Term Now insurance for over a year.