Thursday, May 3, 2012

Review of Primerica's Business Structure

What is Primerica all about? Well, the purpose of this article is not to put down Primerica, nor is it to sing the praises of Primerica. My intended goal is to give you the most unbiased and genuine informationto help you decide on whether or not Primerica is for you. Therefore, to be victorious, we must first examine Primerica's history and Corporate Mission. We will then talk about the most prevalent Pro's and Con's concerning the business structure, pay plans and marketing strategy.

Primerica was founded back in 1977 by an old High School Football Coach named A.L. Williams. A.L. Williams was a remarkable personality that like so scores of other geniuses, tripped into his Ah Ha moment. A.L. hated the fact that he saw many of his family members struggle to pay all of their monthly obligations. To make matters worst, he could not figure out why so many would pay for Life Insurance their entire life! Thus the idea of Term Life was created. A.L. believed it made more sense to split your investments from your life insurance and to simply pay for life insurance during the years that you stand to lose the most. These years would be between 25-55 years old when you are just beginning to aggragate your assets. At this age you don't have a sufficient amount of money on hand to pay off the debt you have produced by attaining new mortgages, car loans, student loans, etc So during these years, you need life insurance that would prevent your children from inheriting a ton of debt in the event that you would unexpectedly die. Primerica's whole foundation is built on this point. purchase Term Life Insurance for a 30 year Term, saving hundreds of dollars per year off the Whole Life Insurance Products, and then invest the difference into Mutual Funds that have an usual ROI of 10 12%. So by the time your 30 year term policy expires, you have no debt and enough cash flow to pay off any items purchased at this point.

Now, this is a brilliant way of thinking and a very easy to apply savvy financial move. Just so you know, I sold Primerica Products for years and had a pretty flourishing career with the company. I didn't leave Primerica, because it doesn't work.I left Primerica simply because I found something that worked better for me. This is not to say that Primerica will not be beneficial for you though. The Pro's to working within Primerica are as follows:

1. Very low start up cost of roughly 0 to join
2. Brand recognition, many have already heard about Primerica Products
3. You can make some additional cash flow and build a business at the same time
4. It is truly a product that is needed in this day and age

on the other hand, there are also some Con's to working and developing a Primerica business. It was many of these reasons that caused me to reassess my long term affiliation with Primerica. Some of the Con's to working with Primerica are:

1. Very high attrition rate (most quit after 90 days)
2. You and everyone in your down line must pass a series of test to sell the products (Securities Test Series 63 and 6 Exams and the State Life Insurance Exam) these test are difficult for some, but have prohibited many from working with Primerica. It's tough enough to find people to work the business, but then they also have to take hours of education courses and pass exams
3. The pay is not residual. You are only paid on the Life Insurance Policies you sell once. You are paid a slight residual on the Mutual Funds you sell, but pennies on the dollar. So to keep making money, you need your teams to keep selling policies.
4. You are restricted to the state you live in. You have to get separate licenses for any other state you want to sell policies. So, you will ultimately saturate your communities.
5. To reach the level the Regional Vice President level of Primerica, you must quit your Job and you cannot own other businesses that Primerica deems conflict of interest with them. (This is what got me, being that I owned 4 other businesses at the time).
6. Lastly, the marketing plan is non existent. Your marketing strategy is to sell all your Friends and Family members and then use their warms markets to keep growing your business. Most people hated this!

So again, Primerica does have great benefits, as well as, great short comings. You simply need to decide if the Pro's outweigh the Con's before you make the leap.

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