Formally known as Al Williams, Primerica is a financial services company based on the direct marketing or “MLM” Model with over 100,000 representatives. The company focus primarily on the life insurance with the “buy term, invest the rest” strategy and thus only market Term products. Many people question the “Pyramid” structure of multilevel marketing companies like Primerica. however in my view this is a very minor consideration and the company has a host of other problems which are far worse.
It’s the Attitude
Primerica agents are some of the most disliked within the entire industry. The agents would have you believe this is because Primerica is the single rebel facing off against an entire system perpetuated by evil agents out to make money at your expense. It’s their truth that infuriates the “status quo”. However the reality is far less sinister; it’s the attitude. Primerica agents strut around like they are gods solution to everything wrong with the industry. They constantly lecture the rest of us on how evil we are for marketing whole life products while they convince clients to replace their old whole life policy with a Primerica term.
It would be bad enough if the agents were just cocky, but combine that with the fact that the average Primerica agent is wholly uneducated on the topics they preach. Many Primerica agents are recruited right off of the street thanks to it’s MLM model. These agents are then taught the mantra of Primerica and released into the world to do the lord’s work. The agents that stick around long enough to hit RVP then teach the very same mantra to their recruits and the cycle goes on. Many Primerica agents don’t grasp even the basic concepts of how whole life insurance works; demonstrating a lack of understanding with built in guarantees, and potential dividend growth.
One could argue that passing their state licensing exams proves that they have the required knowledge to sell insurance. However as someone who also passed their state exams I can tell you that this is absolutely meaningless. The exams mostly cover the legal considerations of the industry but cover virtually nothing when it comes to actually helping the client. This may be my own anecdotal experience, but when I got licensed and started selling insurance I knew nothing about the industry. The company that I worked for didn’t really teach, but rather used us as phone fodder. As a result I held some very ignorant views. I didn’t understand that insurance and finance were intertwined. When looking only at insurance and ignoring everything else I couldn’t see the merit of term insurance at all. I actually refereed to it as “Trap” insurance. It wasn’t until I was in the industry for some time that I learned the merits of term when paired with a proper investing strategy. Does this mean I was a bad agent that didn’t do what was right for my client? No. It just means I was ignorant and needed much more training. Even today I’m constantly learning new things and refining my understanding of finances. This long ramble serves to illustrate a point. Getting licensed doesn’t necessarily make you qualified.
One thing I’ve noticed from my friends in Primerica is they brag about replacing those terrible whole life policies far more than actually seeking out new uninsured clients. While It’s fine to replace a policy when the merits are there; Primerica agents see whole life as something that should “ALWAYS” be replaced. Never mind if it’s an important part of a larger financial plan. Never mind if the client is close to retirement age. Never mind If they have had it for years and replacing it would be catastrophic.
The thing Primerica agents don’t get is that term isn’t the one sized fits all solution. Sure young adults with families and kids might very well be better off with term, but not every client is a young adult with a family. Whole life makes a lot of sense for those clients that are looking for final expense policies with guarantees and no risk in the market. It makes a lot of sense for a professional seeking business succession planning. It’s the only real solution for high net worth individuals looking for estate planning. If ever there is a permanent need for insurance than permanent insurance is what makes sense. But god forbid someone halfway through their plan has the misfortune of sitting with a Primerica agent…
Those that have drank the Primerica cool aid will actually argue that whole life companies sell subpar term to encourage clients to purchase whole life. Which makes it quite ironic that companies like New York Life for example (A company I am not affiliated with) has some of the most affordable term rates in the industry. Meanwhile Primerica has some of the most expensive. This means that the whole life company with sub par term actually has better term than Primerica.
The agents will often rebut this with the argument that Primerica term has a lot of features that makes it worth paying the premium. Such as the guarantee to purchase more insurance at a guaranteed rate. Besides the fact this feature isn’t unique to Primerica, in many cases the client would still be better off purchasing twice as much insurance at a more affordable price now than waiting to double the insurance later. In fact in some cases you can buy twice the amount of insurance for the same price.
Primerica agents will be the first to slander other professionals as greedy bastards out to benefit themselves at their clients expense. This doesn’t really hold up to water. Firstly a professional can make much more charging a client yearly for assets under management than with whole life retirement alternatives. Secondly how is making $600.00 off of a whole life case any more “greedy” than up selling the client twice the insurance and still walking away with $600.00? At that point it’s about advising the client the pros and cons of both and letting them decide.
This doesn’t mean that Primerica is a bad company. Nor does it mean that if you have Primerica insurance you should replace it. I’m sure some Primerica agents are well meaning and don’t necessarily fit into this list, the vast majority in my experience have a cult like mentality and could do with opening their minds a bit. There is no universal solution. And we should always have be open to the idea that we aren’t as smart as we think we are. We can always learn something from somebody.