Primerica

What is the general opinion of Primerica? Have heard that it is a pyramid and others think it is upright. How can I find out about any abuses or problems especially in my area that it might have had?

OMGosh! now most readers of these here forums will know that i am more than a little abrupt and i may not be very nice on occasion. however, i try as a general rule not to openly criticize other investment advisory firms. i especially dont do this when others know my company affiliation (i am also in financial services).

but since you asked, here are some reading materials for you...

Check out www.RipOffReport.com and do a search of Primerica.

the very first heading calls them (and they are well known as) "The Amway of Financial Services".

this is because they do have a tendency to operate as a multi level marketing network - like Amway. MLM has fallen in disrepute because of the many people at the lower levels of the pyramid who support a very few at the top. Primerica also has a bad rep (deserved or not) of hiring advisors and then selling to all of their friends and family (not a bad thing in and of itself - hey, we want to help our friends right?) but the managers take HUGE amounts of the earned income and don't teach the new advisors to fish for themselves. ergo, the advisors leave the business very quickly and a phenomenally large number of them don't survive in the business.

you can also check out NASD Broker Check or the SEC Advisor Information (http://www.adviserinfo.sec.gov).

good luck in your information search.

1MO

Check out http://www.primerica.com to learn everything about the company. Check out my blog about what I write about Primerica at http://obe231.blogspot.com

obe, not to put too fine a point on this, but the nazi's had a few good ideas (economic, weapons technologies, some medical treatments) but their small bits of goodness here and there were GREATLY overshadowed by their evilness ... er ... EVILNESS.

primerica undoubtedly has a few good people who do good work. but their churn and burn and one size fits all overshadows any good they may have ever done.

from the first page of OBE's blog about the virtues of Primerica:

obe is talking here about primerica's philosophy of buying term and investing the rest...

You can withdraw money from mutual funds anytime and if you die someday, your beneficiary will either get your investments or take control of it. So, if you have investments, you want to make sure you name a beneficiary or beneficiaries on them (you don't want the government to take control of it and decide who should get the money).
this reflects on the basic knowledge and training afforded to primerica reps (of which obe is one). as he recommends against permanent insurance from a standpoint of ignorance, he likewise is ignorant on named beneficiaries. this, frankly, invalidates his major point.

of course, he may be assuming that people who recommend permanent insurance do so without regard to fully funding other tax exempt or deferred opportunities. this would be a specious assumption. while i may personally recommend someone begin a permanent policy prior to maxing out their Roth (though never before capturing their 401k match), it is only with the full belief that they will be maxing their Roth's in short order. in this case, it is time for the trusty HP12c to make an entrance.

I find that most life insurance agents and the so-called "financial advisors" are the biggest hypocrites in the financial industry. How can they recommend others buy some sort of life insurance that builds cash value such as whole life and they don't own it themselves? Most people who recommend cash value life insurance either own term insurance or no life insurance at all.
i love your nebulous "most" and "so-called". on the face of it and with every bit of my anecdotal experience talking ... every single professional i know in the business is using permanent protection. that said, some newer agents may not and i fully understand this as they are starting businesses. their cash flow is TIGHT. however, when i transitioned into this business, not only did i keep my existing permanent policies, i added to them. where i did cut back was during the first two years i suspended all investing. by the way, i most certainly recommend permanent insurance yet have term ... that is a sophomoric statement on your part. use of one does not exclude use of the other. finally, all primerica has is term. and of course you know the old adage of the carpenter. when all you have is a hammer, everything looks like a nail.

oh man, i could work his blog all night long.

in my company when a financial advisor is struggling we are all freaked out. i mean come on ... WE hired this individual. we provided training and mentoring. we poured our heart and soul into this individual ... and they did the same for us! when someone doesnt make it with our company, we autopsy the hire. we are the experts. it is our job to select the right people and we have a responsibility to them. sometimes we will make mistakes in the hiring process, sometimes the applicant makes themself sound stronger than they are ... this is a tough biz to be in. but when they leave, we always try to have them leave on a good note.

here is what OBE says on the subject:

6) Okay, the individual doesn't have any of these problems I mentioned above, but still didn't make any money. Then that individual is very dumb or retarded ...

YIKES! sign me up for this company!!!

by the way, i know the mantra for Primerica is that all us others are out there to get you cause you are the best. puhleese. if you wish to enter the debate, please do so on your own merits and not this ol "my dad can beat up your dad" mantra.

Primerica is not one size fits all. its the cash value life insurance that is the one size fits all. Primerica separates savings and life insurance, while other companies bundles them as a single plan. life insurance is a financial tool. Majority of families don't have much savings and in lots of debt, so the need for life insurance is very high. So Primerica shows clients on how much life insurance coverage they need and help the client start building wealth by investing into mutual funds. As clients gets older, their savings increases, their debt decreases, and they have less financial obligations. So the need for life insurance is very low or non-existent. As you can see, you don't need life insurance forever. You only need enough to protect your family from financial devastation. You can only do this with term insurance and investing the difference. Primerica completes the job by doing both things for the client.

What is your argument on why people should have permanent life insurance? You said every single professional you know have permanent life insurance. Are they all from your company?? Because every professional or agents I know outside of Primerica such as Metlife and Prudential told me they either had term insurance or no life insurance, but they have to sell permanent insurance because they earn lots of money by doing so. Even though they know its a bad product, they have to sell it because their income is dependent on it.

Oh by the way, I can name beneficiaries on my mutual funds. Why can't you?

obe, nice cut and paste job off of your web-blog for post #8.

as for my "argument" for permanent insurance, i dont have one. i do have "reasons" why in some cases it is an essential product. honestly, i dont feel the need to regurgitate the entire litany here as on this very web-site there are several voluminous writers who have outlined those reasons.

but how about just a couple:

1. in your blog you state how so many American's have similar lives in that they all have too much debt, not much savings, and want to be wealthy.

- i dont know a single wealthy person who wants their estate diminished by the IRS. permanent insurance is by FAR the best way to leverage this bill. term WONT cut it. if you are making your clients "wealthy" then there is an indisputable need for permanent life insurance.

2. term is the most expensive insurance a person can buy. it is the LARGEST moneymaker for the insurance company BAR-NONE. why is that? all those premiums paid by millions of clients for decades and decades and they only have to pay death claims on less than 2% of the policies.

- i have NEVER met nor NEVER heard of a real person who EVER cancelled policies because "Now, I can self-insure." i have NEVER met a client who could self-insure (and i have some uber-wealthy clients). so, with your plan, i just have to keep renewing my term as it gets costlier and costlier and costlier ... if i can.

finally, i will ask that someone else explains to you why you cannot name beneficiaries on your mutual funds. it will be more 'beneficial' for you to hear it from another and more fun for me.

p.s. can you also name beneficiaries on your checking and savings accounts?

Although I agree with everything else, you can definitely name beneficiaries on a taxable mutual fund account. It's called a TOD (transfer on death) account. The same goes for any brokerage account.

geesh price, delete your post before he reads it. i would like a simple explanation from him. i know i "offered" for someone else to answer ... that was my bad.

and while you can transfer securities UP the uniform TOD security registration act, it is certainly NOT the only way to keep the governments hands off of your dollars. in fact, they will pass no more efficiently this way than if you simply designated it in your will.

not necessarily true for some older folks.

Hee-hee. Sorry about that 1MO. I really doubt that he holds much cred. We have a handful of Primerica migrations at our office and some of the stuff they have to say about the company's culture is hillarious. And judging by the way they perform their duties, we are getting all of the good ones.

They all have expressed a disdain for Primerica's "one size fits all" and they also realize they were extremely limited as to the helpful solutions that could be offered via their former employer and they expressed a bonafide concern as to the practice of replacement and lack of follow-up on the "invest the rest" side of the coin.

p.s. can you also name beneficiaries on your checking and savings accounts?

At my bank, I can name a beneficiary. Check out EmigrantDirect.com

ok ok ok, i screwed this up ... and for frequent readers, you know i am not a fan of eating a little crow.

in my attempt to be entertaining while making a point, i think i lost the point.

bottom line is that when you use a TOD (or its banking equivalent) then i agree that you are avoiding probate. but you avoid nothing else whatsoever. your mutual funds do not gain any additional protection by virtue of doing this. in fact, the nasty ol government can control THE PROCEEDS of a deceased persons account whether it goes through probate or not. probate is just some geeky lawyer making sure stuff goes where the law says it goes. there is a small cost for probate. naming beneficiaries on any account will minimize the amount that goes through probate and thus save you some MINOR cost.

but again, it doesnt protect ANYBODY or ANY-MONEY from the government (which is what obe said and i tried to call him on).

that said, lets look at some of the drawbacks to this. if you are an elderly person and will be leaving ALL of your assets to ONE person, then fine. use a TOD. if you are leaving it to multiple persons or entities and especially if you are trying to give your assets in percentages ... give it up. you just created more problems than you solved.

If Primerica is so great and noble and is looking to get their clients out of debt and save them tons of money...then why is their term SOOOO expensive?

Their term can run over 100% higher than several term policies among their peers. Do any Primers fee justified in selling the highest term in the business?
If buy term and invest the difference is really what is BEST for the client, then why screw them to do it? At least do it right!

If you do not believe me, let us compare term quotes. You see the difference is that we can do everything you do ( and much more) and we can do it much, much better.

I had the opportunity to work with a Primerica rep about 1.5 years ago. I met him via a member of our church inviting him in to give a few financial planning sessions in a group setting. I'll amit he seemed ok and as if he knew his stuff so I set up an appointment for a meeting at our home with my wife and I. The session went well but he really put the old road block up for me when he asked if I was interested in changing careers and working for Primerica. This is how he ended our first session. Normally I would have taken that as a compliment to my personality or intelligence but he said he wanted to give me an opportunity to make better money that I was currently making. Ok, this is where the big road closed sign came into play. He went on to tell me that I can make better money working for Primerica than I was currently making and he'd give me the training to succeed too. Well, I did my research and found quickly Primerica is a company that works in this fashion and will focus at times more on the recruiting than the sell.

I could go on to tell you more but at the end of the day I did not go with him as my financial planner.

in a pyramid scheme, the ONLY way to make any real money is to recruit more people in your "down-line". thus huge pressure to recruit. and another characteristic is that anyone can recruit. its sorta like a virus. if you have it, you can pass it along.

in any legitimate business the company will recruit new employees. however, in legitimate companies their HR or recruiting staff are usually people with extensive experience and measured success.

that is the insidious nature of Primerica. it looks odd until you squint your eyes a little and tilt your head to the left about 14 degrees ... then it looks right.

i love how primerica boasts the largest sales force in the country while never telling you that over 90% of its sales force is inactive and hasnt met with a client in years.

If Primerica is so great and noble and is looking to get their clients out of debt and save them tons of money...then why is their term SOOOO expensive?

Their term can run over 100% higher than several term policies among their peers. Do any Primers fee justified in selling the highest term in the business?
If buy term and invest the difference is really what is BEST for the client, then why screw them to do it? At least do it right!

If you do not believe me, let us compare term quotes. You see the difference is that we can do everything you do ( and much more) and we can do it much, much better.

Actually, Primerica has one of the lowest term rates in the industry because they just reduced their rates and came out with the new custom advantage term insurance. Where as before, you were partially right that some companies have better term rates than Primerica. But now, Primerica rates are now 30-55% cheaper than their top competitors.

We can compare quotes, but no term policies are similar. But if you want, I'll start off. Here are the data needed to calculate the premiums.
1) Husband: Age 30, perfect health.
2) Wife: Age 30, perfect health.
3) Term policy: 30 year level term on both.
4) Coverage: $500,000 on Husband, $500,000 on Wife.
5) Payment plan: ANNUAL payment
6) Waiver of Premium rider for both husband and wife.
7) Two children. Parents bought $10,000 coverage on them with NO Waiver of Premium.

My premium calculations total out to be: $1070.00/year (roughly $89.17/month). What's your calculations and from what company do you work for? Where do you get your quotes? If you are getting quotes online, then there is nothing to compare here since online quotes only give a rough estimate.

Anyway, I hardly doubt that you can do better than me because you sound like another life insurance salesman. I think you can only do parts of what I can do for families. I take a look at the entire picture of the family situation. I take a look where they are at now, find out their needs and goals, create a budget worksheet, and from there I make my recommendations using the customize, confidential, and complimentary financial needs analysis. I'm life licensed, mortgage licensed, and securities licensed. I can go get my health insurance license if I want to, but I don't have a big market for people who want long term care. I can go get my P&C license if I want, but my state and 26 other states doesn't require me to get it to sell auto and homeowner insurance.

i have to differ with you, your term cannot beat my basic 40 year term policy. click the link below and enter the same particulars you did in you last post and you will see i can easily beat that rate!!!

that said, i found it quite interesting that you implied sturgbe was a life insurance agent (as if that was a bad thing) when you yourself are discussing an insurance topic. when you yourself are acting in the capacity of a life insurance agent when you place any term product. nevertheless, it is more common than you might imagine (in your small cacoon of Primerica) that the vast majority of those in financial services are also fully licensed for brokering variable products. personally i carry a 6,7,63,65, and 26. i would opine that contrary to your implication, most of the regular posters here who are professionals, are similarly licensed. oh, and we are not even talking certifications.

everyone here who knows ME, knows i prefer to remain anonymous. nevertheless, at my firm our advisory staff offer products from multiple companies (pretty much any company they would like to represent). so, i will not be listing my company. as you didnt list the insurance company that sponsored your quote, i wont be adding mine. but i ran a range of three companies: (ps. i know your company cause primerica only offers 1 insurance company ... its primerica's way or the highway).

each company I ran offers 1 policy to provide the total coverage. they ranged in price from $729 a year up to $1354 a year. personally i wouldnt recommend the 725 'cause it is from a stock company with a low rating of A (yikes).

finally, as i have stated on innumerable past occasions; if i were buying insurance personally, i would always choose a mutual company first.

obe- not to assume all reps are created equal within primerica I'd like to get your opinion and the opinion of others on this term structure and if it is a normal type of product to sell. As I've posted in the past I did have a primerica rep help me with our financial needs but have since discountinued our working relationship. Anyway, the 20 year term he structured for me went like this:

$700,000 of coverage year 1 for me.
$600,000 of coverage year 1 for wife.
The total annual premium on $700,000 coverage for the first 10 years is $470.50.
The total annual premium charge on $600,000 coverage will be $495.50.
In the 11th year, total annual premiums for the above shown coverage will increase to $1,480 per year for the next 5 years.
In the 16th year, your total premiums for the above shown coverage will increase to $1,923 per year for the next 5 years.
Now, to further complicate this scenario, we also have an additional policy provision that will increase the death benefits for each of us $25,000 per year for the next 10 years. This starts year 2. The cost for each $25,000 of coverage will add another $17.50 (approximate) per year each year to my premium and $25.80 (approximate) per year each year to wifes premium. This goes on for the next 10 years. As such, we will each have added another $250,000 of coverage during the next 10 years. Starting in the 11th year the total cost for this additional benefit will be $183.50 for me and $276.30 for my wife. This is added to the cost for your base coveage. This cost will remain level for policy years 11 through 20.

I'm sure somewhere, someone really thinks this is a really neat policy. To me it is entirely too complicated. Our premiums are constantly increasing each year. You never really know what your cost is going to be. And, ultimately, I think it ends up being expensive term insurance aside from being difficult to understand. Some of the premiums are guaranteed for 20 years. Some are guaranteed for only 10 years and could be higher than projected in years 11-20. Again, too many variables to my liking. It's like they tried to re-invent the wheel.

You should be calling your agent or call the company to explain what is going on with your term policy. But since I'm a technical person who loves to explain everything, I will attempt to analyze what you wrote.

Base on what you wrote, you and your wife have a 20 year term policy with an Increasing Benefit Rider (IBR). The IBR increases your death benefit by 5% (up to $25,000/year) or 10% (up to $50,000/year) of the initial face amount. It starts in the 2nd year and ends on the 11th year. Primerica should be sending you letter every year prior to the increase to give you the option to decline the increase of coverage. Once you decline an increase, no further increases are allowed. If you decide to decline the increases, I would call the company up first about what would happen if you decline the increase. Since you have $700,000, your death benefit will only increase by $25,000/year from year 2 to 11. After that, death benefit and premium will remain level.

During the first 4 increases (year 2 to 5), your premiums will be based on issue age (the age nearest to date of issue of the insurance policy). After that, your premiums will be based on attained age (which is your current age) from year 6 to 11. After year 11, your premiums and coverage remains level until the 20th year. I don't know your age at the 21st year, if you under the age of 70, your premiums will go up every 5 years until age 70, and then every year until age 98. I don't know your financial needs after the 20th year. Maybe you still have some financial obligations, maybe you don't. Maybe you have lots of savings build up that you don't need life insurance anymore. No one knows for sure. That's why I encourage other Primerica reps to follow up with old clients at least once a year.

As for my opinion, it doesn't matter what my opinion is because I don't know your situation. To me, I think its great that you can increase your initial coverage by $25k/year to a total of $250k because no medical exam is required. By the 11th year, you would have $950,000 coverage. If you didn't have the Increasing Benefit Rider, and you wanted to increase your coverage, you would need to provide proof of insurability. Then again, your premium does goes up slightly every year during the increase of coverage. Though, if your income goes up every year, you should be able to afford it. If you can't, you can decline the increase in coverage by calling the company.

Is this a pretty standard format/structure for 20 year term coverage for Primerica or any other insurance provider? Just seems to be complicated and something I have to think about annually, not that thinking about coverage is a bad thing annually but I was hoping to have term and forget about it for a few years.