Are You Googling Primerica Scam Because You've Heard They Are An MLM?
What's the Deal?
If you are googling Primerica Scam because you just found out they are an MLM (multi-level marketing company) you are not alone.
Every month this term gets some traction so I thought we’d talk a little bit about their business model.
Before anyone gets hot under the collar MLMs are legitimate business models. There are plenty of companies that generate profits through this type of selling.
…so before we get started, Primerica is NOT a scam.
It’s important to know what an MLM is and how it could potentially influence the purchase of your life insurance policy BEFORE you buy coverage from Primerica Insurance.
So What is Multi Level Marketing Anyway?
If you are searching for Primerica Scam chances are you already know they use Multi-Level Marketing (MLM) to push their products.
So what does that mean?
Often referred to as pyramid selling, MLM is a strategy used by companies to exploit referrals to hawk their products. Compensation is commission-based, which is the same throughout the life insurance industry.
Where it deviates is there are TWO potential revenue streams:
Policy sales (all agents get commissions)
Recruitment of a team of salespeople that operate under you (you receive a percentage of their sales)
The Recruitment Angle Complicates Things for Salespeople and Clients
This creates a strong incentive to recruit lots of new salespeople over the course of your career.
Sounds good right? Well not so much. The US Federal Trade Commission reports that 99% of salespeople that join an MLM lose cash.
So if you are looking for examples of a Primerica Scam you aren’t going to find it. Their business model is on the up and up…
BUT there are things you need to consider BEFORE you buy a policy from them.
The Primerica Scam Doesn't Exist:
BUT Their Business Model May Impact YOU as a Client
The most important thing anyone should be aware of if your opt to buy a policy from Primerica is the fact that any agent that represents them ONLY sells their policies.
This is always a problem for potential clients because not all life insurance companies are created equal. If you want to get the best possible coverage for the BEST possible price the only way to do this is to work with an independent agent.
Shopping around always gets you the cheapest premiums.
There is also the added issue that your agent may actually try to recruit you to sell life insurance.
I don’t know about you, but that’s the last thing I want to think about when I am buying my coverage. In fact, I never used my friends and family as a way to make cash. For me, it’s short-sighted. I’d rather find people who are truly in the market.
Like cults, MLMs often have a strong culture of positive thinking that’s centered around blocking out any and all negativity. From the top down, every new recruit is told again and again that they will encounter a lot of people who don’t understand or don’t believe in the mission. They are told these people will attempt to talk them out of the dreams, that they don’t want them to succeed, that they’re jealous and bitter.
3 Reasons Why You Should Think Twice About Primerica For Your Life Insurance
As I noted at the beginning of this post, Primerica is definitely NOT a scam nor is Multi-Level Marketing. That being said, there are valid reasons why you may want to shop around when it comes to your life insurance.
Reason #1: Primerica ONLY Sells Term Life Insurance
Term coverage is what I recommend most of the time. Especially when it comes to families replacing income when a breadwinner dies prematurely. There are, however, other occasions where different types of insurance may be more suitable.
If you’re talking to a Primerica agent, you won’t hear about any other types of life insurance: they can ONLY sell you term coverage.
Reason #2: Primerica's Term Coverage is the Most Expensive in the Canadian Marketplace
When I’m shopping the market for clients to isolate the best rates, Primerica NEVER comes out as the most affordable coverage. In fact, they often sit at the bottom of the rate calculator chart as the most expensive.
When it comes to term insurance, you should be shopping primarily by price. You’re talking about a very simple product and contract.
You agree to pay a guaranteed monthly cost for a specific term (ie. 10 or 20 years) and coverage amount (ie. $500,000).
If something, God forbid, happens to you within the term, the only thing that really matters is that the insurance company cuts a tax-free cheque to your family.
Is it important whether the company is Equitable Life or Manulife? Not particuarly. The insurance industry is highly regulated in Canada – you can expect your a term insurance claim to be paid out regardless of the carrier.
There is NO reason to pay $10 – 30 more per month for your term coverage if you don’t have to. Over the life of a policy, it can add up to literally thousands of dollars!
Reason #3: Primerica's Term Insurance Has NO Conversion Option
Almost all term life insurance policies sold in Canada come with the free option to convert or exchange your term coverage down the road.
This benefit allows you to exchange some or all of your term coverage for permanent coverage without having to provide medical evidence again.
Most consumers don’t purchase a term policy with the intention of converting it into permanent insurance in the future. However, there are situations that can arise where you may want to take advantage of this feature.
This option, in reality, is rarely exercised but it’s very important should you become uninsurable during the term of your coverage. Primerica does NOT have this option.
Check This Example Out
For example, I have a client in her mid-60’s who has a term policy, at a standard health class, with the option to exchange up to the age of 70.
Unfortunately, she suffered a stroke in her early 60’s. Now 67, she wants to put some permanent protection in force so her children aren’t burdened with her final expenses and estate costs.
Because of her recent stroke history, the only option available to her is a no medical policy which is more expensive than the medically underwritten coverage she would qualify for if she hadn’t had a stroke.
Fortunately for her, she does not have Primerica term coverage so she has one more option.
She elects to convert $50,000 of her $200,000 term policy into a permanent whole life policy with her current life insurance carrier. As a result, she is also able to purchase this $50,000 policy at standard health rates.
All she has to do is sign and submit a conversion form to her insurer. This option guarantees her insurability and saves her thousands of dollars moving forward.
Wouldn’t it be nice to know you have this option in place even if you never use it?
In Conclusion the Primerica Scam Search Isn't Necessary, They Are a Legitimate Company
So rest assured, googling “Primerica Scam” isn’t necessary. They are a reputable company, selling legitimate products.
Sure maybe the MLM model doesn’t agree with you – I personally am not a fan but that doesn’t mean their products aren’t legit. They are.
Am I down on Primerica? Not really, I just get a deep sense of satisfaction seeing the look on a client’s face when I tell them they’re saving $10,000 over 30 years by replacing their Primerica term coverage with something more affordable.
Note*** if you do decide to replace any life insurance coverage with any carrier, it’s very important not to cancel your existing policy until the new coverage is in force.
Remember, it’s VERY likely that you can get more affordable coverage if you call Policy Architects today!
We work with the best life insurance companies in Canada to find you the best possible rate for YOUR unique circumstances. The savings are significant and can be in the thousands. Keep in mind, life insurance is a long-term cost, saving $15 per month over 20 years adds up to $3,600.
So Get in touch with Policy Architects Today! Click the button below to get a free quote or schedule a call here.