Monday, April 11, 2011

Pros and Cons of Primerica

Hello All!  My Intention for this blog is to give my "opinion" of  both the Pros and Cons of Primerica.  It is my  intention to be as non-biased as I can.  Hopefully this will help consumers, current primerica reps and those considering the opportunity to make a more informed decision.  If you are here to bash primerica, please do not bother to respond as I will delete your responses.  On the other hand, If you are here to spread untrue rhetoric, good or bad I will be compelled to correct your lies.  I encourage INTELLIGENT, and OBJECTIVE feedback!  Others need not respond!

First of All, let me discuss my background and experiences with Primerica.  I joined in 2004, and as so many others, was ignorant when it came to the basic rules of finance and money management.  I became licensed in both life insurance and securities within the first three months.  I learned a great deal through their very informative web site, and to a lesser degree through my (RVP's) trainings.  I became a "district leader" and earned a few thousand dollars in each of my first few months licensed.  Fast forward three years, I was promoted to RVP.  I opened my own office and had about 30-40 agents (life licensed at peak).   I never earned 100k per year, nor did I build a large hierarchy.  What I was able to do was establish a humble, yet honest and ethical business.  I met dozens of wonderful people and was able to open my mind to many new endeavors.  Overall, my experience at Primerica was positive.  In March of 2011, yes as of this writing one month ago, I decided to part ways with the company and become independent.

What I learned- Some of what I learned through my 7 year tenure in Primerica was through trainings, yet most was through self studying and field experience.  This learning experience has brought me to where I am today.

Positives of Primerica


People- MOST, not all Primericans, are ethical, honest and caring individuals who always have the clients best interest at heart . I forged some wonderful friendships that I cherish to this day.

Education- Albeit basic, being around Primerica allowed me to learn about the basics of personal finance such as ; Rule of 72, Buy Term & Invest the Difference, importance of establishing a will, mutual fund investing, IRA's etc.

Self Development- Primerica promotes self-developmentall the time.  I was introduced to wonderful authors such as Jim Rohn, became a good public speaker, and developed a positive outlook.


Opportunity-   Primerica is one of the few companies that allow untrained, part-time reps the opportunity to learn the industry without having to leave the comfort of their job.

POL- Their intranet web site that has a wealth of resources for the self starter, very intuitive and informative tools for studying to pass exams, and comprehensive resources to further learning.

Competition/Recognition- They have wonderful incentive trips, and are great at recognizing their people for even the smallest accomplishments

IBR-  Increasing benefit rider allows client to increase coverage without proof of insurability of up to 10% per year for up to 10 years

Term Conversions- The ability to convert term to term.  MOST companies do not offer this option.  (Although there are some that will)


Negatives of Primerica

PRICING
- Despite the hype that Primerica's life insurance product is competitive, it usually is not.  Often it is MUCH more expensive.  Arguments will be made by Primerica reps that their product includes so much more than other companies, however after researching the other companies independently, the vast majority beat Primerica rates and offer equal or SUPERIOR features.

Here are 7 DISADVANTAGES TO PRIMERICA LIFE/NATIONAL BENEFIT LIFE'S product:

1) Very Expensive- Generally 15%-50% more expensive than companies with equal financial ratings.  Using myself as an example, I purchased my policy 7 years ago and am paying over 150 dollars monthly to insure my wife and myself.  The same coverage, 7 YEARS LATER, is approximately 25 dollars cheaper each month with a competitor.   Not to mention that it extends my guarantee period.

2) Lesser guarantee periods- Although you purchase a 25, 30 or 35 year term policy from Primerica, your rates are only guaranteed for the first 20 years.  You pay more than you would for a twenty year level term policy, yet you are still ONLY guaranteed for 20 years.  Oh, and by the way, the fact that Primerica has never raised rates, or raised anyone's premium on a 25, 30 or 35 year term policy is irrelavent because those products have not been around for more than twenty years. Either way, their product is more expensive.

3) Unisex rates- Although many Primerica reps promote this as a good thing, it really isn't.  As a matter of fact it ends up costing a female significantly more to insure herself than it would if she were to buy her policy elsewhere.  Because women have a longer life expectancy, EVERY insurance company offers females cheaper rates than males, EVERYONE BUT Primerica.

4) Terminal Illness Rider- Again this is stated as a positive by most Primerica reps, however the fact is that Primerica's Terminal Illness rider IS WEAK COMPARED TO MANY OTHER COMPANIES. There are companies that will offer up to 75% and 750k terminal illness riders for NO additional charge and unlike Primerica will not charge interest on the use of this benefit.*** Primerica has upgraded this rider since my original writing- it offers up to 70% and 400k IF the client opts for there waiver of premium rider***

5)  Only 3 Rate classes.  Most companies offer at least four (no tobacco) rate classes and an additional two to three rate classes for tobacco users, which effectively helps to lower their premiums.

6) Preferred status is only available for renewals through age 55

7) No preferred status below 150k.  Many companies have preferred rates as low as 100k.


Commissions


Life Commissions
-Generally Primerica offers some of the lowest commissions for entry level reps in the life insurance industry.  So unless you are a BIG recruiter/builder, you will make SIGNIFICANTLY less on each transaction.

Securities Commissions


- Primerica's dealer re-allowance does not match up to "street level" Gross Dealer Concession's paid at most broker dealers.  Again, unless you are a BIG recruiter AND an RVP or above, you will make significantly less than your counterparts in the Investment industry.
- Trails are also much weaker, and NOT paid out to anyone below Regional leader.
- Commission rates follow you forever based on your level at the initial sale.  That means that even though you hold the highest designation in the sales force (SNSD),  if you made a trade at the representative level (lowest level), you will continue to earn commissions as if you were still a representative!


Ownership


Primerica's ownership program is designated only for those who reach extremely high levels of income/premium and promoting of other RVP's.  This represents less than 1/10 of  1 percent of the licensed salesforce.  Anyone who does not achieve these levels DO NOT retain ANY ownership of their business and CANNOT solicit a "Primerica" client they discovered for at least 2 years from the date they terminate regardless if it is in the clients best interest or not.  Many agencies/BD's allows agents to transport their clients if they decide to leave.

Flexibility

Despite the fact that I mentioned this as a positive, there are certain restrictions that make operating a business and working in certain industries, or working at all, unavailable.  For example, I worked in education, and wanted to continue my career while running a business (as an RVP) within Primerica, it was NOT allowed.  There are other conflicts such as being a P & C broker which is disallowed to participate in Primerica.  In the outiside (of Primerica) world this would not be a conflict.  Although partnership is promoted in Primerica, offices cannot be co mingled with other professions.  Again this is a Primerica rule, often companies who run one business share an office with those in a complimentary industry.  It actually fosters great referrals!

Thanks for reading my blog!

FOR THOSE WHO ARE INTRIGUED AT FINDING A COMPANY WHO OFFERS THE POSITIVES OF PRIMERICA WITH NONE OF THE NEGATIVES ATTACHED, PLEASE FOLLOW THIS LINK