Primerica or Something Out There Better

[Rick Deckard]

I feel like I need to post in this thread. I can remember going to my 1st Primerica meeting when I was 22-23 years old. I was into many things most young folks are into and insurance was a difficult thing to grasp and understand but I knew the company was solid and I liked learning about money.

-Of course I joined and then never did much. That's on me not them but you will be asked and almost feel forced to recruit or pitch your family which is a terrible place to start for many.

-While Primerica ultimately was not my path to financial freedom, the lessons I learned about how money truly works and compound interest has brought me a lot of success in terms of investing on my own. Investing money every paycheck or paying ourselves first, very valuable lessons everyone can grow from.

Good luck in whatever path you choose.

 

[toolbelt]

I feel like I need to post in this thread. I can remember going to my 1st Primerica meeting when I was 22-23 years old. I was into many things most young folks are into and insurance was a difficult thing to grasp and understand but I knew the company was solid and I liked learning about money.

-Of course I joined and then never did much. That's on me not them but you will be asked and almost feel forced to recruit or pitch your family which is a terrible place to start for many.

-While Primerica ultimately was not my path to financial freedom, the lessons I learned about how money truly works and compound interest has brought me a lot of success in terms of investing on my own. Investing money every paycheck or paying ourselves first, very valuable lessons everyone can grow from.

Good luck in whatever path you choose.

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Compound Interest Definition | Investopedia

There! We just saved 200,000 people the trouble!

 

[rousemark]

Every time I see the title of this thread one word comes to mind...................

Everything!!

 

[HGIMax]

When it comes to Primerica - there are two main "controversies" that always come up. Both have their place for discussion. Here we go:


* Buy Term & Invest The Difference
I joined the company in 1991 just as they were abandoning the A.L. Williams name and moving towards Primerica Financial Services. It is where I got my start in the industry. At the time, almost all of the life insurance that I saw in the market was traditional Whole Life insurance, which for the most part, is not usually the best choice for middle america, especially when it is the only life policy and when enough face amount is not sold. I loved the concept, and it made a lot of sense to me. I was young and was replacing a ton of Whole Life. There is no doubt that ALW forced the industry to change and adapt. Their first answer to BTID was Universal Life, which was poorly implemented, and quite frankly, a disaster. Eventually the industry came up with much better products, such as VUL and IUL. Still, many of the traditional industry resisted even these cash value policies. While BTID had its place, there are several real issues with it, namely: a) most people stop investing the difference, b) the only investment choice is generally mutual funds, and c) if BTID was in fact successful, you may have created an estate tax problem.

Ultimately I learned that there was no such thing as a bad "product" - only bad implementations of a product. There is a place for all types of life insurance (YES - even whole life), but you need to learn and have the acumen to be able to make proper recommendations. Even today, there is no "one-sized-fits-all" product or concept. While I truly believe that ALW/PFS was an industry disruptor, today they are the dinosaur... Not innovating... They simply have not adapted. Conversely, most of the traditional industry has. No longer are most big insurance companies "anti-term" per se. In fact, many have embraced term insurance as a cash-cow. They realize that it is very profitable, since less than 2% of term insurance companies pay a death benefit, since we are mostly healthy when the term is affordable. Sorry to say, the Primerica crusade is dead. It has been dead for at least 2o years.

* MLM Business Model
I was not a fan of recruiting at all. To me, I didn't get it. I did not like trying to recruit all of my family and friends. Back then, MLM was not as "big" as it is now. The big ones were Amway, Mary Kay and Excel Communications. I'm sure there were many others. After I left PFS in 1994, I was still recruited constantly by many other insurance outfits... Not all MLM either. I soon realized that recruiting was really a function of giant distribution. I worked with traditional brokerages that received overrides from me, so it was still "multi-level pay" but not MLM or network marketing. I found that with many of these MLM insurance groups, they seemed to focus on a "one-size-fits-all" solution, which I never have been a fan of. Ultimately, I figured out that MLM is nothing more than a fancy way of developing a never-ending stream of clients, since most recruits were going to become a client anyway. And let's face it, most recruits aren't going to stick around forever, but that's consistent with the traditional insurance industry. And in the end, MLM is all about building a large enough distribution network of sales people, which should, if done right with enough time, develop a stable and increasing income stream.

Like it or not, it is very popular in the insurance world today. Not just Primerica and WFG, but smaller firms like FEG, PHP and probably 100 that we've never heard of.


* Conclusion
Many people, including myself, got their start in Primerica, then learned and moved on. If you are looking to be a "financial planner", Primerica probably is not it. Nor is WFG, PHP, HGI, FEG, etc... All of these companies focus on middle america and have a huge focus on recruiting. Many industry professionals think think that MLM recruiting is "unprofessional". Many are right, especially when these recruiting organizations pitch one product or concept. In fact, even though most of these companies (excluding Primerica) offer many products, they generally focus on one product. Unfortunately, that ideology reflects bad on ALL of these companies. Client suitability must be #1. With that said, it comes down to the local leadership with any of these companies.

I have been on both sides of the industry - both traditional and MLM. Both have their pros and cons. Personally, I don't think there is a problem with "how" you build your marketing team (if at all), as long as you are putting your clients and/or recruits first, and you let their needs guide your recommendations.

 

[DHK]

Excellent, well-thought out, and reasonably balanced post!

 

[toolbelt]

"I figured out that MLM is nothing more than a fancy way of developing a never-ending stream of clients, since most recruits were going to become a client anyway."

The problem with that is that these recruits aren't joining to buy a policy, they're joining for the "opportunity" of "owning a business". And the FTC has rules in place regarding the ratio of internal consumption to external sales in the MLM industry. Vemma and Herbalife recently discovered that.

 

[HGIMax]

"I figured out that MLM is nothing more than a fancy way of developing a never-ending stream of clients, since most recruits were going to become a client anyway."

The problem with that is that these recruits aren't joining to buy a policy, they're joining for the "opportunity" of "owning a business". And the FTC has rules in place regarding the ratio of internal consumption to external sales in the MLM industry. Vemma and Herbalife recently discovered that.

I should hope not. The policy should be bought based on the merits of the policy. It is not (and should never be indicated that it is) required. While I certainly believe being "a product of the product", it is illegal to coerce a product as a requirement to join the business.

As I said in my previous post, it always needs to be about suitability - that must always drive correct sales. In a perfect world, every new recruit would purchase a suite of diverse products, but this just doesn't happen. In this business, there is no "auto-ship" and there is a high higher standard of ethics and compliance than there is with MLM companies such as Vemma and Herbalife.

When I was a State Farm agent, most of my policies were State Farm policies. If you worked for NYL, I'd imagine that you would have a NYL policy (if it made sense). Same thing with any of these other companies.

Ethics, suitability and professionalism must always be your strategy when dealing with the public. A recruit is no different that a client that wants to be an entrepreneur. You are under the same code regardless.

 

[DHK]

I should hope not. The policy should be bought based on the merits of the policy. It is not (and should never be indicated that it is) required. While I certainly believe being "a product of the product", it is illegal to coerce a product as a requirement to join the business.

Think about this: If a licensed person buys a product from another licensed person (even if they just joined)... wouldn't that cut down on lawsuits and complaints? Particularly if they bought AFTER they became licensed?

 

[HGIMax]

Think about this: If a licensed person buys a product from another licensed person (even if they just joined)... wouldn't that cut down on lawsuits and complaints? Particularly if they bought AFTER they became licensed?

Maybe. But I know of a case where a newly licensed person bought from his upline (not my company) and due to the newly licensed person's lack of experience, was coerced into purchasing a Transamerica policy that was way more expensive than he could afford. He was told that in "6-9 months" he would be making so much money that it wouldn't matter.

Talk about unethical.

Anyway, after a complaint to the DOI and several meetings with Transamerica big wigs, the company eventually refunded all premiums paid in order to avoid a lawsuit and potential DOI sanction.

So, yes, in theory, but nothing can stop an unethical and greedy trainer from taking advantage of unsuspecting new salespeople. MLM or not.

----------

Another thought. When I was a State Farm agent, I knew of agents that required that their staff (licensed and non-licensed) had their auto insurance from their agent. And some even expected them to own a State Farm life policy from their agent. It wasn't about needs or practicing what you preach. It was about an easy sale for the agent's agency - nothing more. There were agents that PAID the life premiums for the employee, again, just so they could get credit towards contests, travel, etc...

(I will say that State Farm was the most unethical and slimy insurance organization that I have ever been a part of. But that's another discussion for another thread)

Same thing happens in a non-MLM world. No matter how you cut it, it's unethical behavior. It goes right back to what I said in a previous post - it all comes down to the local leadership.

 

[toolbelt]

The problem with a dependency on selling to recruits is the first thing they do when leaving is to cancel the policy. As for auto-shipping, that has merely been substituted with monthly system access fees.