When it comes to multilevel marketing (MLM), Primerica stands apart from typical companies. Primerica is a large, publicly traded life insurance company that provides insurance and other financial products.
However, like other MLMs, Primerica’s sales representatives earn commissions not only from their own sales but also from their downline sales. Questions persist about whether the company operates a pyramid scheme, though scandals involving Primerica are far fewer than those affecting many other MLMs and life insurance companies.
Beyond life insurance policies, Primerica offers additional financial services, including mutual funds. This Primerica life insurance review will examine whether the company is a scam and whether you can trust it. We will also share Primerica’s life insurance costs.
Primerica Company Overview
History of Primerica
Primerica began in 1977 when Arthur L. Williams, Jr. founded the company under the name A.L. Williams and Associates. The company initially sold term life insurance policies as a privately held general agency.
Over the following years, the company underwent several mergers and acquisitions. It was first listed on the NASDAQ stock exchange in 1983. Primerica emerged in 1987, and the company has maintained that name ever since.
Following the birth of the Primerica name, the company continued through numerous mergers and acquisitions, which is common in the financial services industry. For several years beginning in 1998, the company operated as a Citigroup subsidiary. The separation from Citi was completed in 2011, and the company has operated independently as a public company since then.
The company generated annual revenue of approximately $2.71 billion in 2022 and employed around 2,621 full-time employees. It also utilizes a network of 120,000 independent sales representatives. Today they sell Primerica life insurance policies, auto insurance, annuities, pre-paid legal services, and other financial products.
Company Investigations
Primerica appears to be among the few MLMs that have maintained a relatively clean record regarding scandals and investigations. While questions about the company operating a pyramid scheme persist, there have been virtually no substantiated claims.
Some sales representatives have grown frustrated because they struggled to generate significant income selling Primerica life insurance products. However, many factors influence a person’s ability to succeed with the company.
One of the most significant scandals involving the company stemmed from multiple 2012 lawsuits in Florida. The lawsuits alleged that company sales representatives convinced firefighters, teachers, and other public workers to invest in risky financial products instead of maintaining their money in more stable government-secured investments.
The company ultimately settled the lawsuits in 2014 for $15.4 million. However, as reflected in Primerica’s life insurance reviews, the company maintains a low customer satisfaction ranking and is not consistently viewed as one of the best life insurance companies.
Current Company Structure
As a publicly traded company, Primerica’s current structure and governance are more transparent than most privately-owned MLMs. The company is headquartered in Duluth, Georgia, and operates like other public companies. A board of directors makes strategic decisions for the company, and the company must file regular regulatory reports with appropriate government bodies.
The company operates in the United States and Canada through its broker-dealer affiliates. Due to the highly regulated nature of their business, the company has found expansion beyond these two countries challenging. Their approximately 120,000 independent sales reps operate through the company’s securities broker-dealer PFS Investments, Inc., in the U.S.
Primerica Products
Unlike other multilevel marketing platforms, Primerica doesn’t sell physical products like diet supplements or cleaning supplies. Instead, Primerica sells financial services products including life insurance coverage and investments.
Their flagship product, Primerica term life insurance, remains their top seller. Additionally, they have expanded their insurance offerings to include auto and home insurance and long-term care insurance.
Another major revenue stream for Primerica is their investment products. They offer mutual funds, annuities, segregated funds, and managed accounts. While all investment products carry inherent risk, Primerica earned recognition on the Forbes list of “America’s 50 Most Trustworthy Financial Companies” in 2015.
Finally, Primerica offers several additional financial services solutions. These products include pre-paid legal services, debt management solutions, and identity theft protection. Most company products target middle-income families seeking insurance protection and investment opportunities.
Customers can obtain a Primerica term life insurance policy for a specified period, typically 10 to 35 years. Primerica is designed for those with strong financial profiles.
The company’s policies begin at $15,000 and, depending on your financial strength, you can secure coverage up to $10 million. Consequently, Primerica term life policies are not intended for those seeking budget life insurance. If you cannot afford Primerica’s term life insurance, you can obtain online quotes from multiple companies through an independent insurance agent.
Primerica Life Insurance Riders
A rider provides additional protection that policyholders can purchase as an add-on. The following are the riders offered by Primerica:
- Increasing Benefit Rider (policyholders can increase their coverage amount by 10% each year over 10 years)
- Waiver of Premium Rider (the insurer waives premiums for people who are critically ill)
- Child Rider (it covers eligible children listed in the policy)
- Terminal Illness Rider (the policyholder can access their death benefit if diagnosed with a terminal illness)
What Primerica Doesn’t Offer
We already know Primerica offers term life insurance and additional coverage options. The term coverage includes a custom advantage policy (requiring a life insurance medical exam) and TermNow (featuring custom term lengths, with a maximum term of 35 years).
But what does Primerica not offer?
Primerica does not provide permanent life insurance options like whole life insurance or universal life insurance. People seeking either of these products must work with other life insurers.
Company Marketing Practices
Unlike traditional MLMs and other life insurance companies, success with Primerica doesn’t require a vast social media following. The marketing approach focuses heavily on conventional networking and relationship building. Given the nature of the products being sold, customers are more likely to purchase from someone they know and trust.
This approach has both advantages and drawbacks. Some traditional stereotypes about term life insurance sales apply here, and you must be an exceptional salesperson to succeed as a company representative. If you’re uncomfortable with networking, cold calling, and complex sales processes, this likely isn’t the right opportunity.
Making Money With Primerica
Being recognized by Forbes as one of America’s most trustworthy financial services companies demonstrates that Primerica is a legitimate company offering genuine income opportunities. But how much do their sales reps earn? According to Primerica, in 2018, they paid their reps an average of $6,069 over 12 months.
That amount is disappointing. As with all MLMs, some reps earn significantly more, while many agents make nothing. Agents who persist and advance through the ranks earn higher commissions on their sales plus commission from their downline sales.
How to Enroll as a Rep
To enroll as a Primerica representative, you must complete an Independent Business Application and pay a one-time $99 fee. To maintain your business, you must pay the $25 monthly fee to access Primerica Online. Reps can operate without the monthly fee, but they receive access to limited online information only.
Once enrolled, reps must obtain specific licenses to sell all Primerica life insurance products. Most brokers must obtain a state license to sell term life insurance. However, very few (only about 3%) pursue their full financial advisor license to sell the complete product suite.
Compensation Plan
Since Primerica doesn’t publish specific commission percentages on its corporate website, obtaining detailed compensation plan information proves challenging. However, certain aspects are known. You earn higher commissions on personal sales as you advance through the ranks.
A first-level representative earns a 25% commission on their personal sales. At the highest ranks, a Regional Vice President earns 95% commission on their personal product sales. Recruiting also plays a crucial role as you can earn commissions up to 11 levels deep in your downline. Licensing significantly impacts your compensation, as additional licensing enables you to sell additional products.
Sales and Marketing Techniques
The most effective technique for success involves traditional sales methods. While some people feel uncomfortable with this approach, it’s fundamental to this business. The company encourages local agents to schedule a Financial Needs Analysis, or FNA, with potential clients.
This analysis guides clients through their current situation and helps assess which products would benefit them. From there, it’s the representative’s responsibility to persuade the client to purchase.
Comparison to Other MLMs
Compared to other MLMs, the upper-income potential remains similar. On average, Primerica representatives earn slightly more than most MLM distributors. Primerica’s products also provide genuine value because they help people, rather than simply selling them on the latest diet trend or workout routine they’ll likely abandon quickly. Primerica maintains a much stronger reputation than most MLMs today.
Conclusion
Primerica is a legitimate company offering valuable products and services that benefit a broad network of people. Success within the company demands hard work and traditional selling skills.
To become a term life policy seller, you must complete an online application. Advancing through the ranks requires obtaining financial licensing, which can be challenging and time-consuming. However, once you succeed, you can earn residual income from the products you’ve sold for an extended period.
If you need an alternative to MLM, check out our top alternatives list.
