This post was originally written in July 2017, upon more recent reviews (April 2019), we found that several links were removed. We have done our best to replace the bad links, and keep the post in tact. If you find any problems, please tell us in the comments section. A good reader experience is our primary goal :)
Since writing our review on World Financial Group, readers have been asking us about a similar MLM called Primerica. We have finally decided it's time for a streetonomic review of Primerica. Our goal is to provide an outside opinion of whether or not you can make money with their business opportunity.
Finding information was surprisingly difficult, which we see as a red flag. Their own website only gives a very limited description of the Primerica Business Opportunity. Despite this hurdle we will share what we have learned from the information we were able to find.
Some of the data used for this review was not supplied directly by Primerica, so we apologize if it is incorrect or out of date. If you are interested in joining Primerica or just want to know more about them, then we hope that you find this review useful.
What Does Primerica Do?
Primerica is a financial services company which sells a range of insurance, investment and debt products to consumers. They recruit and pay their agents through a multi-level marketing system. If you've met a Primerica agent, then you've probably been invited to see a presentation so they can recruit you to their team
Before you look at the Primerica opportunity, you should ask yourself one important question. Do you want to be a financial advisor? If the answer to this question is no, then Primerica is not for you. You can not make money with Primerica unless you are a good financial planner
If you do want to become a financial planner, then you will need to study and pass some exams. First you will need to become a licensed insurance agent, otherwise it would be illegal for you to speak to customers about life insurance. If you plan to get promoted through the Primerica ranks, then you will eventually need to get a securities license too. If study and exams is something you don't want to do, then joining Primerica probably isn't for you.
What is the Primerica Business Opportunity?
The company website describes it as 'a great opportunity for people from all walks of life to achieve their dreams'. If you are looking for financial freedom then they say 'Primerica is the company that can help you discover that freedom'. While this all sounds very positive, they haven't told us anything about how you can make money with Primerica.
he website wasn't quite as detailed as we hoped, but Primerica has also published a view on Youtube about their business opportunity, shown below:
The first thing we learn, is that in this opportunity, Primerica is targeting people who are unhappy with their work lives. There’s even the standard sales pitch version of the definition of insanity, which they get completely wrong! They then have a bunch of people who tell us about the jobs they used to hate, but then they found the ability to dream again.
It goes on to look like a pretty standard MLM promotion. They claim to offer you the chance to own your own business. Without the normal risks etc etc. Ironically if you join MLMs such as Primerica, you are not a business owner, you are an independent contractor. You are a commission based salesperson for the MLM business. You are not a shareholder or decision maker in the business.
After a bit more hype, they finally tell us that Primerica is going to teach us how money works. This did sound interesting because financial literacy is something which we think is important. Then we hear ‘step 2’ in their process, ‘we get you protected’. This is code for ‘we sell you an insurance policy’. Speaking as industry insiders, we’d recommend not buying anything until after you have your own license and have made a few sales. Make sure you fully understand the products before you buy them yourself. It’s too easy to get excited about the opportunity and jump into an inappropriate financial product.
Next we get a glimpse of their strategy which they call ‘buy term and invest the difference’. They claim it’s unique and make it out to be some sort of game changer, but it isn’t. It’s something that any licensed financial planner can help you set up, if it’s right for you. Having said that a real financial planner would know that one strategy isn’t right for everyone.
The video goes on to tell us how great Primerica is, because it was voted on a list 4 years ago, and it’s a public company. They also get to represent some companies as shown in the image below:
No matter what they try and tell you, all this means is that Primerica can sell these products for commission. This is how financial planning works, you get licensed, and you sell financial products. Any financial planner with similar licensing can give you the same service.
The video goes on to tell us about how great the opportunity is, but we saw nothing new with Primerica. We did find it interesting that they referred to themselves as the fastest growing ‘financial services marketing company’. It’s interesting wording because they are creating a category which probably doesn’t exist outside of themselves, WFG and a couple of other MLMs who promote financial services. If I moved to New York and got a brokers license, I could call myself ‘the most successful West Australian broker in New York’. The title might be true, but it also doesn’t mean anything.
The video goes on to tell us a bit about the MLM ranks and has a collection of people, who tell us how great their lives are because of Primerica. Their stories might be true, but that doesn’t mean that the results will be the same for you. We want to know more about how Primerica is going to help us from day one.
The best document we could find for new Primericans is the 2015 Primerica New Recruit Manual, which outlines how the business works. This has not been supplied directly by Primerica, it is from people in their MLM, so we can not confirm if it is still valid or if it's an original unedited Primerica document. we do like the line on the bottom of each page which says ‘for internal use only, not to be used with, or distributed to the public’. We downloaded it from the internet, so it appears that these Primericans perhaps didn’t follow that rule too well.
The manual starts of will some very basic stuff, such as how to dress for meetings, and when to attend training. It then shows you all the licenses you will need to obtain before moving on to the important part… recruiting. Their is a whole page for you to fill in with names and details of potential Primierica recruits. After that we get to the interesting part.
Page 6 of the New Recruit Manual is a script to be used when calling potential leads. The opening part of the script reads ‘I am currently getting my state license, and part of my requirement is to take my trainer to 10 presentations in the next week’. We found this particularly interesting because even though we don’t know which state they are in, we believe this statement is not true.
The real goal here, is to get your upline in front of your warm leads before you are licensed. What this means to you, is that your leads become clients for your sponsor. If you aren’t licensed, you can’t sell products, so there is no point calling your leads until you are ready to make sales yourself.
It looks like they are trying to leverage your relationships with friends and family to get clients for themselves. They may say things to you like ‘why wouldn’t you want to share this’. Or something similar, but we strongly suggest you resist calling your warm market until after you fully understand the products are are licensed to sell them yourself.
We read through the rest of the manual and there is a lot about overcoming objections, and asking your leads for more referrals. There is no mention of studying for your license, or setting aside time for proper product training.
Spending time learning and watching your ‘trainer’, work with their clients would be much more effective to your own future. Feeding leads to your trainer is better for their financial future. You can call us cynical, but this opinion is based on close to 20 years experience in financial services.
It was nice to see that on page 13, they offer some stand responses to standard objections. Our favourite was the one where they purport that your regular job is a pyramid scheme. It’s very interesting that Primerica does not deny being a Pyramid themselves.
You can make money with Primerica by selling a combination of term life insurance, mutual funds, and debt management products. How much you can earn will depend on how well you generate sales. Don't worry if you're not a sales person because Primerica has 'a time-tested method of building a business and earning a potentially unlimited income'. They confirm that you will need insurance and securities licensing to reach maximum income levels.
For more information about the opportunity, we looked at a document called 2017 Introduction to Primerica. This document also contains information which is ‘not available to the public’, which didn’t stop an agent from posting a copy online. We accessed the information and no NDAs have been signed, so we’re going to go ahead and share our findings.
We can now confirm that Primerica’s target market, is ‘middle income earners’. It’s a sector they believe is currently being ‘under-served’. They don’t provide any actual market data, so we can’t confirm how they came to this conclusion. We can however confirm that we have seen several clients from this sector while working with major companies in the traditional financial services market.
As we plod along we find that they also talk about the Millennial generation. There are 93 million of them in the US alone, according to the Primerica, it’s the largest generation (by population size), the US has ever seen. This strategy may sound clever, but we’ve heard it before, except 20 years ago, people were talking that way about Baby-boomers.
We believe that the Millennials represent more people than the Baby Boomers, but we’re not convinced that they have the same statistical significance. For example, do they control a similar portion of wealth? Do they make up a similar % of total population? Many more questions which we could spend days researching. If you’d like to find the answers and share them in the comments section, that would be great.
The unsubstantiated claims continue with references to how more than 50% of financial decisions are made by women. The gig economy is expected to explode over the coming years. Primerica represents a high proportion of Non-Caucasian clients.
Then it gets real interesting. Once of the strengths Primerica lists is their ‘independent contractor sales force’. This confirms our previous assertion that they are not making you a business owner. They are making you part of the ‘Gig Economy’. Like an Uber driver, you are welcome to work for them and earn a commission from any sales you make. They’ll take a cut, but there is no benefits, and no hourly rate.
If you keep reading, you’ll find that the bulk or Primerica’s income comes from sales of term life products. Then on page 11, we see that ‘sales force growth drives Term Life Sales’. There is no mention of customer acquisition, just recruitment. Then again, ‘we get you protected’, was step 2 in the Primerica opportunity video.
This recurring recruitment theme is a serious concern. It appears that most of Primerica’s profits come from existing agents. This suggests that if you join Primerica, then you are the primary source of income for people in your upline! If you want to make money then according to the system, you need to recruit!
We scroll on and find that Primerica are proud to be ‘Not a Traditional Life Insurance Company’. They then show us a table breaking down their income from insurance premiums, investments and other income sources. This is all well and good until we pay attention to the fact that Primerica is not an Insurance Company. They have chosen to compare themselves to insurance companies rather than financial services providers. This could be an oversight, or it could be an attempt by Primerica to make themselves look better than they really are.
Primerica goes on to provide a break down of their licensed sales force. We used their data to create the table below:
If we look at the above table, we see that of all the agents who become licensed insurance agents, less than 3% (1 in 33), make it all the way to being Investment Advisers. This suggests that a large portion of agents either quit Primerica, or fail to advance beyond the first license. This becomes more of a worry when we consider that this does not include all the agents who quit without getting their insurance license
The introduction continues for several pages more full of charts and other fun stuff which could fill up an allotted presentation slot. Feel free to keep reading it, we found enough.
Since our original publishing of this review, some links have been removed. It also has the ‘not for public distribution’ line on each page. Well it turns out that back in 2017, we kept a copy, so here is the Primerica New Recruit Orientation Guide. Our study of this document found:
To succeed you need to 'coachable' and commit to field training. In MLM language, being 'coachable', usually means being able to copy what those above you are doing, it's part of the 'duplication' process. Field training means shadowing your upline, attending client meetings the intention being to learn through observation.
Allegedly the first 90 days are 'the most important of your entire Primerica Career'. The way to get off to a 'fast start', is to build a list of contacts right away, and start recruiting new members to Primerica. They note that recruiting will be your main activity while you are waiting for your insurance licensing.
You can't discuss any products until you are licensed, so in the early stages all you have to do is introduce Primerica in a positive light and book appointments so your field trainer can take it from there (with you observing).
The prospecting skills supplied explain that there are different types of prospects which are hot, warm and cold. The manual suggests you start your business by contacting your 'warm market':
Hot Prospects - Are people in your very close circle of friends and family. You see them often know their spouse and family, and probably know a lot of their other friends
Warm Prospects - Are people you are familiar with, but aren't in your close circle. They might be work colleagues or members of a common club.
Cold Prospects - Are people you've never met
Once you are familiar with prospecting, you'll learn the most important skill, recruiting. The manual describes recruiting as 'the life blood of Primerica', stating that is a 'better way to sell', and a 'better way to prospect'. So we guess that means your prospecting in the first 90 days is actually recruiting.
Some recruiting techniques suggested by this 'time tested method', include 'looking at everyone as a potential recruit'. It doesn't matter if people say 'no' because it's all part of the process of finding the next yes. Remember to play the numbers game because recruiting is 'an all the time activity' and 'the engine of your business'.
Like all network marketing companies, the motivation for the constant recruitment, is money. If you have a downline, you will earn an 'override commission' on any sales generated by them and whoever they recruit (for several layers). Advancement through the ranks, and access to the higher pay scales in Primerica requires recruitment.
The commission you make from your own insurance sales, and the override you are entitled to, are both dependent on your rank in the Primerica hierarchy. We constructed the below table to illustrate how your Primerica commission is calculated at each level (qualification requirements are from a Primerica team page):
Primerica pays override commission based on a 'differential' basis. This means that if a new member is sponsored by someone in your team, you earn the difference between their maximum override, and your own.
If you pass your insurance licensing and become a representative, you can start selling insurance. You will earn 25% commission on every life insurance policy you sell. You will also generate 70% of commission for your upline from the same sale. When you are starting out in Primerica, your upline will earn 2.8 times more commission than you on any sales you complete
Your upline will try and use this big difference in pay to motivate you. They might say something like 'keep recruiting and one day you'll get here too.' The Finance Guy thinks that this is unfair. Nobody should earn more than you for the work you do, but that's just the opinion of someone with several years financial planning experience. We'd question the true motives of a 'mentor figure' who will get most of the reward from your work
What is the Primerica Fast Start
We already know that this is part of the 90 day plan, but for more information, we found a copy of the 2015 Primerica fast start manual. This is a 90 day plan to help get you up and running as fast as possible.
Once again this document was provided by active Primericans and not directly by Primerica. We can’t confirm that this is an official document, but these people went through the system and are the result of official Primerica processes.
The first point in their game plan, is ‘everyone is focused on recruiting.’ Once again there is no mention on looking after clients, or ensuring that your own financial literacy is up to date.
Again a key to success is buying an insurance policy from Primerica. While it’s true that it’s important to believe in your products, can you really believe in them if you’re not even licensed to sell them yet? This manual also has versions of warm market lists, prospecting sheets, and of course scripts, and of course objection handling. This manual does not call your regular job a pyramid, once again doesn’t prove Primerica is not a pyramid.
In a previous version of the 90 day plan, which has now been removed from the internet, we learned a few things too. We aren’t sure why the previous document was removed. Maybe the Primerica agents who posted it quit, maybe they changed their website. It could also be that they weren’t supposed to be sharing Primerica’s inside secrets. Before the link was removed, we did read the document and the research below is from it. We found:
If you follow the Fast Start guide then 'every goal or dream you have, can and will be accomplished'. You'll be in a great position to make money because 'you’ll have an unlimited number of appointments to go on because of all of the new recruits coming on to your team'
There is a 4 point game plan, which basically involves focusing on recruiting, and making sure that you buy Primerica products yourself. It’s disappointing that the focus isn’t on improving your financial education and finding retail clients. Perhaps that’s because there are very few retail clients in Primerica. With all the focus on recruiting, we can assume that most of the money comes from inside the MLM network. This is problem because it means that only the people at the top of the system can turn a profit.
Following the Fast Track program could have you on the path toward earning '$30k - $50k in income your first year, and $150k - $250k plus your second year'. The first step is to book 15 'kitchen table' appointments for your field leader in your first 30 days. This is something the Finance Guy disagrees with. This former financial planner would suggest only approaching people you know after you've got some experience and built up enough confidence in the products and how they work.
The manual then provides a telemarketing script for booking appointments. The script involves calling people you know and telling them that you are 'very excited' about working for a new company and asking them to 'help you out' by letting your 'trainer' come and show it to them, as part of your learning. The script then goes over a few possible scenarios, all of which end with you asking what time you can come over and show them Primerica.
We found it odd that script instructs you not to confirm appointments. They suggest you tell your friend that the appointment is in your diary so unless you hear from them, you'll see them at that time. People sometimes forget, or circumstances come up. Professionals confirm every appointment (even if it's just via a text message). If you don't confirm appointments then you will waste a lot of time showing up to cancelled appointments
It is our opinion that they don't want you to confirm the appointments because this would give the prospects a chance to cancel. If a client can't keep an appointment then your confirmation call is a chance for you to reschedule. If they are simply disinterested, then they were never going to buy so cancelling the appointment saves you time.
The manual explains that the best results come from the 'right market'. They suggest focusing on married couples who are employed with financially dependent children. Clients also get points for having a mortgage and being aged 22-55. Now find 15 people from your warm market who best tick the boxes.
You can also improve your results by ticking boxes on the company side of the appointment. These include being motivated, wanting more money, being competitive, have people skills and you must be credible
Some more tips for success from the fast start manual include:
- Show up to all training and meetings
- Bring guests to the 'opportunity meetings'
- Listen to Primerica recommended CDs
- Read Primerica recommended training and books
- Plug In
Theses tips for success including the phrase 'Plug in' remind us very much of Amway. This is not good thing because we believe that you can't make money with Amway.
The fast start guide gives an overview of the different ranks in Primerica and how to achieve them. It then explains that if within the first 30 days of joining, you can achieve 50,000 in 'builders track points', you can earn the $300 fast start (which might be paid in scholarships and vouchers). Your points must include at least 4 insurance sales. You can also get points for attending meetings and coaching sessions, and generally plugging in.
Are Primerica Agents Making Money
We know that it is possible to make money with Primerica. We've been told that this is 'a time-tested method of building a business and earning a potentially unlimited income'. If you follow the fast start program, we are told that we can earn '$30k - $50k in income your first year, and $150k - $250k plus your second year'.
While these statements sound good, we thought we'd find out how much Primerica agents are earning now. After all that should give us an indication of how likely it is that we can make money with them.
We were unable to find a full version of their income disclosure statement, but there was a reference to personal incomes on the general page. Here we learned that the average annual income for Primerica representatives in 2016 was $6,088. That's less than $120 per week!
We have no doubt that some representatives earned a lot more than this, but that also means that a large amount of representatives also earned absolutely nothing. Maybe the vast majority who join, never follow the fast start program. It's also possible that the Fast Start Program is all hype and no delivery.
Why Is It Difficult to Make Money With Primerica
The main reason people aren't making money is because they aren't making sales. We learned this from the 2016 Primerica Annual Report. In 2016, Primerica agents sold an average of 0.22 life insurance policies per month. That's only 2.6 sales for the year! The same report shows that this was a good year. The figures in 2014 and 2015 were even lower!
Even though the company made over $1.5 Billion in revenue in 2016, the average representative only made a sale once every 4.5 months. We know that some representatives made a lot more sales, but this also means that several made no sales at all.
We believe that the constant focus on recruiting is part of the problem. Like all network marketing companies, Primerica teaches representatives to 'recruit everyone'. The problem is that while everyone is focused on recruiting, nobody is focused on finding retail customers. This makes it very difficult for representatives to turn a profit because not enough money is coming in from outside of the MLM network.
Can You Build a Team With Primerica
If you want to become above average, and earn more than $120 per week, then you will need to build a good downline. Remember, you can't earn 95% commission on your own sales until you've recruited enough people to become a Regional Vice President (RVP).
To find out how well the Primerica representatives grew their teams in 2016, we again looked at the annual report. We constructed the table below using information found in it:
We see that at the end of 2015, Primerica had a total of 106,710 licensed representatives across USA and Canada. During 2016, they managed to sign on a total of 262,732 recruits, or around 2.6 recruits from each consultant. It turns out that only 44,724 (17.02%) of these recruits became licensed. That means that less than 1 in every 5 recruits completed their insurance license.
If you're not licensed with Primerica, you can't move from associate to representative, and can't make sales or earn significant commission. We can't confirm, but we will assume that recruits who don't become licensed all quit Primerica. This would infer that in 2016 82.98% of new recruits quit Primerica without completing the initial training.
The total number of Primerica representatives grew by 10,117 or 9.5% during 2016, yet in the same time, 44,724 new representatives joined. From this we have calculated that 34,607 or 32% of existing representatives quit Primerica during 2016.
This should give you an idea of what it would be like to build a downline team with Primerica. In order to earn overrides, you will need to sign up 5 new recruits so that 1 of them can become a representative. Building a team in these conditions will require constant recruitment because every year 1/3 of your existing team will quit. Every time a representative quits your team, you will need to sign up five more recruits just to replace them.
If you can't recruit enough new representatives to replace the 32% who quit, then your team is will be shrinking. This would become difficult as your team grows. Imagine if you had 50 representatives in your downline. That means that you should expect 16 to quit. To replace these 16 represenatives, you'd need to sign up 80 new recruits. To grow a team with Primerica, you need to find new recruits at rate of more than 160% per year.
Imagine if all businesses were like this. What would it be like at your work, if every year they hired 5 new staff for every 3 existing staff members, just to keep up with everyone who was quitting? Would you accept a new job with a company where 4/5 of staff quit before they earned a paycheck?
We had a look at Primerica reviews on Glassdoor, and found an interesting blend. Some reviews written by current representatives seem quite positive. However there’s also quite a few former Primerica representatives who share some of our concerns. A common theme is that it’s difficult to make money with Primierica.
Is Primerica an Illegal Pyramid Scheme
Network marketing companies are legal as long as they are backed by a product or service. They only become illegal pyramids if you are being paid for recruiting new members to the system. Having said that, the line between making sales and recruiting new members if often quite a blurry one.
As noted above, the annual report showed us that in 2016 each Primerica representative signed up an average of 2.6 new recruits. During that same time, the same representatives made an average of 2.6 life insurance sales. Is this a coincidence, or is that most of the insurance policies are being sold to new recruits?
In the 'Doing it Right' section of the new recruits manual, Primerica states:
'You do not get paid for recruiting. That would violate anti-pyramid laws and is a practice Primerica does not permit. Please remember that recruits are never required to purchase any Primerica products or provide referrals in order to become a Primerica Representative.'
It's nice to know that new recruits aren't required to buy any products, but that doesn't mean that they aren't encouraged to buy them. In the same manual it tells us that recruiting is a 'better way to sell'. This can only be true if the new recruits become customers.
The 'Building Credibility' section of the manual states:
'Credibility is essential to your future success', it goes on to say 'One of the best ways to establish your credibility is to complete your own FNA and start working on your own financial program. You will become familiar with the FNA process and understand what is required to begin your own journey down the road of reaching financial independence.'
So you aren't required to buy products, but if you want to be successful, then it's essential. Completing your Financial Needs Analysis is one of steps in the 30 day fast start program. Doing so will earn you 1,000 points toward your $300 bonus. Buying your own life insurance policy will get you another 2,500 points. Once again, we can't be certain, but we believe if you join Primerica your field trainer will try and sell you an insurance policy while you are still a recruit.
We would suggest waiting until after you have your license done so you can be your own first client. Then again we are not getting paid a commission and are not worried that you only have a 1 in 5 shot of actually getting that license.
We looked up Primerica on consumer affairs, and found that some people do feel that it’s a pyramid scheme. There are also quite a few customer complaints about Primerica insurance policies.
If MLM Doesn't Work, Why Does Primerica Use It
We regularly say that you can't make money with network marketing. We have never said that network marketing companies can't make money. In 2016, Primerica reported a total profit of almost US $338 Million. A big part of their profit came from the fact that they use multi-level marketing.
In the annual report they proudly say 'RVPs’ efforts to expand their businesses are a primary driver of our success.' They go on to mention that because of the constant recruitment, 'our sales force is able to continually access an expanding base of prospective clients without engaging costly media channels ' In other words paying the MLM incentives is much cheaper than using advertising and other branding techniques
The company mission statement says they want to help their clients achieve financial freedom. We believe that all representatives are part of the Primerica client base. Perhaps they should work harder on their mission because we haven't met a lot of people who could be free on an income of $6,088 per year. Then again this shows that commission only contractors are a lot cheaper than regular staff, so it helps with the profit line. Perhaps the best way to make money with Primerica is to become a shareholder.
Should You Join Primerica
At the beginning of this post, we said you should only join if you want to be a financial planner, but you can also join if you want to work in recruitment. If you are interested in becoming a financial planner, we recommend you consider this as well as several other opportunities.
The last time the Finance Guy joined an independent financial planning group, he got 95% of the commission he generated from day 1. Furthermore he owned his client base and was able to sell it when he decided to leave the industry. At Primerica you will not earn this level of commission until you reach the top of the pyramid.
If in any given year, you decide to join the 32% of representatives who quit Primerica, there is no guarantee that you can sell your clients. In the Annual report, they mention:
'Primerica Ownership Program. This program provides qualifying RVPs a contractual right, upon meeting certain criteria, to transfer their Primerica businesses to another RVP or a qualifying family member at such time as they desire.'
If you attend a presentation of the opportunity for any MLM you will probably hear claims that you can earn passive income and work on your own business. No matter how many times they make this claim, it simply isn't true. Maintaining a downline requires constant work, and if you quit you can't sell your 'business', unless the company allows you to.
In our opinion you are unlikely to make money if you join Primerica, but that's just our opinion. What's your opinion? We'd love to hear from you in the comments section below, specially if you can share your experiences with Primerica.
For more posts like this, look at our list of mlm reviews.