| Subject: My opinion on Primerica |
Author:
Kevin Irani
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Date Posted: 07:19:54 05/31/06 Wed
Author Host/IP: 70.29.233.87
In reply to:
Scam
's message, "Primerica SCAM!" on 09:24:23 05/25/04 Tue
This may seem like a long message but please take the time to read, I hope this helps everyone!
Technically, Primerica is not a scam. Expressions like "pyramid scheme" are often used to describe Primerica and Amway, buy they aren't. But they are different in their marketing approach. It's called "multi-level marketing." At first joining Primerica can feel really uncomfortable...since we're all used to the usual 9-5 Monday-Friday type of job.
I never worked for Primerica. But, I did attend some of their session, thinking I was going to a job interview. I met some interesting people. But they were offering a sales job, and I just cannot do that. Not in my nature. But don't get me wrong! There are some people who can do that... the problem is I know some who joined this company and started losing many freinds, since all they thought about was money money money...I mean there is more to life then pushing families to switch insurances and make alot of money off of them.
I'm going to explain a bit about the little I know of Primerica, so you can see why it's not a pyramid scheme. I also think it's an interesting story.
What makes Primerica unusual is how it grows. Most salesmen sell to people they don't know. Primerica salesmen are encouraged to sell to people they know, including family, and to market not just the products, but the job as a salesman. You try to make friends and family into customers, and try to turn customers into salesmen!
Of course, your friends and family aren't likely to bite, but they are likely to give you contact info on their friends. This gives Primerica its CULT-LIKE creepiness.
Primerica sells life insurance. Before Primerica, the insurance business was dominated by "whole life insurance." Primerica sells "term insurance." Term was the original form of insurance. The big difference is term is cheap, flexible, has good returns, but it expires. Whole life doesn't expire and is very inflexible and more expensive. Because it doesn't expire, it is virtually fool-proof.
Why buy term? Let's say you are 50, and married to a 50 yr old. You are buying life insurance. The odds that you will both live to be 80 is very small. So if you buy a 30 yrs term life insurance but you both live past 80 you will be uninsured. But much more likely, you will die before 80, your wife will get a fortune. Playing these odds really does make more sense for a lot of people. Paying much more money for an unlikely event like you both living past 80 seems silly.
The drawback? Whole life is secure. It is also much better for the insurance company, apparently (but I cannot remember why).
Term is also very flexible. "Buy term and invest the difference" is the slogan. The other product Primerica sells is using this difference to invest. Combining Life Insurance and Stock Porfolios is the magic the made Primerica a marketing success.
The market reaction was inevitable. First, insurance companies began to offer term insurance to customers. Second, the banks began to move into investments. If I wanted to be facetious, I might say that Primerica was the Apple Computer innovating, thus motivating it's competitors to follow.
Primerica is a very peculiar business. They are out to convince America to switch from whole life to term. Their firm belief in term is almost a religion, and they are on a crusade to save America from the big bad insurance companies.
The really creepy part of multi-level marketing is how everyone gets paid. The money flows backwards; basically, you pay your boss. Everyone you enrole in Primerica kicks-back some of their earnings to you. You kick back to your boss, and so on. The best way to make a lot of money is NOT to be a good salesman, but to be a good RECRUITER. The more successful salesmen working for you, the more money you make.
You can make a lot of money with Primerica. But you need to have the right personality. You really need to be outgoing and social. You won't get anywhere as a book-smart accountant. You need to be a good talker, easy going type of guy... having a large ego won't help too since you will have alot of people trashing talking you, and giving out the negative comments. But it really helps to be a sociopath, able to convince your own friends and family to stake their old age on your "funky insurance," AND to convince them to do it to their friends and family, too.
Well think about it, would you still help families with there finance, but let's say I don't pay you that 100K a year, but you still have to put in the long hours. If you said no it seems like you a driven just for the money, if you said yes, wow shows alot about your character!
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