Primerica is one of the many Life Insurance companies you can encounter here in Canada. It can provide you with an insurance, insure your car or your home, can give you means to invest in Mutual Funds and can also help you to clear your debt. There are three other states where Primerica operates: the United States, Spain and Puerto Rico. The company was established in 1977 and was subsequently owned by Citygroup for many years. With the financial crisis kicking in, Citygroup decided to sell Primerica to Berkshire Hathaway, a Warren Buffet company.
Speaking from a position of an independent %LINK1%, I would like to share a few ideas on Primerica’s services and also the world of insurance business. Since most of the articles I came across on the Internet dealt only with the way Primerica operates, I will start with some remarks concerning the Primerica’s major product - Primerica Life Insurance, and then comment on some aspects of the company that most likely have some heavy effect on the quality of their services.
One policy fits all?
There’s not much choice with Primerica, regarding the insurance policies: only the Term Life Insurance policy is being offered. There’s nothing wrong with the term life insurance, but this policy simply cannot be the best choice for just about anyone out there. Sometimes the whole life insurance or the universal life insurance can be better. Sadly they are not offered by Primerica. There are many situations when a different type of life insurance simply fits better, like child with a permanent disability, insurance needed to offset taxes on an investment property, or the transfer of a family business.
How much?
Many of Primerica policies cost much more than the similar policies of their competitors by 30 to 40%. That’s because of the means Primerica operates, but more about that later. But it’s not all that bad with Primerica, because it is one of the very few insurance companies that still offers 25 and 30 year term policies and policies for specific age groups are in fact quite competitive.
Convertibility
Primerica’s customers cannot convert their term life insurance policies, because as I said before, the company does not offer any other type of life insurance. Of course you could keep renewing your policy for as long as you like - or for as long as you can afford it, since it gets more and more expensive with every new term.
In my understanding, these are the main flaws with the Primerica life insurance. But the insurance business - just like any other business - is not just about the product. It is also about the conditions within the company. Let me shortly explain what I have in mind.
The company’s set up
If you choose a career of financial adviser, in order to become successful and to do your job faithfully, you need to 1) have enough knowledge regarding your products and services, 2) be able to shop around for different products to suit your client’s needs, 3) be motivated financially.
Condition 1: Primerica provides only a few weeks training for its new sales representatives who are virtually left to “fake it before you make it”. Now don’t get me wrong: I firmly believe there are plenty of very good advisors within Primerica. But the trouble is that these experienced advisors, instead of spending their time with clients, are mostly recruiting and training new advisors in their team, so the customer I dare say will end up being served by a beginner.
Condition 2: Unless you are an independent %LINK1% or independent financial advisor, you cannot shop around for a better deal, company or product - as simple as that. I just don’t get it: why do people limit themselves to selling only one company’s product?
Condition 3: If you expect to receive all of your commission, than it’s time to wake up: Primerica is a structural company, so you have a structure to feed! Up to 3 other people will share a bit of your commission with you. As the result you earn less money than if you were selling similar products without having to pay the structure above you. So is there no way to make money with Primerica? There sure is one: recruite your own team. Let me summarize: Primerica views its advisors as some kind of financial doctors, curing all the financial diseases of their clients. But hey - there’s something wrong with the picture, isn’t it? Because my doctor actually attends the patients. That’s his job… He doesn’t recruit other doctors to work for him. If you really want to keep up with the financial world, if you really want to become a professional within this field, doing it full time is the way to go. And you can only do it full time if you forget all about training and recruiting.
I will repeat: there are many great advisors in Primerica. But it gets easier to become a good adviser when you don’t limit yourself to one company, or one product, when you get a proper education and don’t have to share your hard earn money with other people.
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