Hey, This is Thomas!
Today I want to talk about something that I wanted to share
a long time ago but wasn’t sure how it would be received.
But I think it’s an important topic
so here it goes.
I want to talk about
the good, the bad, and the ugly of Primerica.
In this video, I will go over the product Primerica offers
the company structure,
and the compensation.
And lastly, the ultimate question:
is it worth it working at Primerica
or is it really just a scam?
Now what makes me qualified to talk about this?
Well, for those who don’t know, back in my early career years.
I actually work at Primerica for 2 years.
At the time, I was working 3 jobs.
I didn’t know anything about taxes,
money or investment.
I was doing everything through the bank but
was not satisfied with their service or advice,
I knew I had to educate myself.
So, I started to learn so that I could become
smarter about money and help my family
make sound financial decisions.
And through a friend’s recommendation,
I joined Primerica.
So first thing first, what is Primerica?
It’s an insurance company that provides
investment, insurance and financial services.
Unlike another company WFG,
which is a brokerage firm meaning they
don’t have their in-house product,
Primerica only offers their insurance products.
They have been around for over 40 years,
and since 2010 Primerica has been publicly
traded on the New York stock exchange,
and back then when I joined,
they said that even the Canada Pension Plan
is investing in Primerica.
I checked today and it’s true.
And since 2013 The CPP investment board
had Primerica shares in their portfolio
until they sold them in 2020.
In insurance products,
Primerica only offers term insurance.
Which means you are covered
for a certain period of time.
On the investment side,
they mainly provide mutual funds.
They collaborate with well-known
investment companies like AGF, Fidelity,
Mackenzie investment and others.
Their core value is
“Buy Term and invest the difference”.
You might have heard this phrase a lot
from people like Dave Ramsey or others.
But it’s actually was first used by
Primerica’s founder Arthur Williams, jr.
The company believes
for the amount of money
you invest into any permanent life insurance,
you can buy the term insurance
to get the basic cover.
And invest in the stock market,
so by the time you retired,
you already have enough saved,
instead of letting the insurance company
take your money.
That’s pretty much the
background of the company.
So, let’s talk about the good bad and ugly.
But before we continue a disclaimer first,
because it has been more than 10 years
since I worked there and
some information could be outdated.
So if any of this information is incorrect,
feel free to comment below.
Lastly, this is just my
personal experience with the company.
Others may have had different experiences.
Let’s talk about the good side first.
It’s very SIMPLE
there aren’t a lot of moving parts.
The insurance company provides a
coverage in exchange for your money.
There is no additional saving
inside the insurance policy.
It’s pure coverage until a certain age.
For the investment side,
it’s really similar to
what the banks offer as well.
Your investment goes up and down
with the market.
Now for their training program,
I personally think Primerica offers a
good structure and environment
at least in the branch that I joined.
In order to become a life insurance agent,
you must first complete a course called
LLQP which stands for
Life License Qualification Program.
And Primerica gives you full support
in helping you with the course.
In fact, back then,
they would offer free tutoring classes
to speed run each chapter.
And they have experienced teachers
to answer your questions.
This is compared to other agencies,
where you might need to do this
at your own expense.
Also, once you completed the course,
you also have to obtain an
error and omission insurance.
This is standard in the industry
just in case you get sued.
The insurance will pay for your damage.
E and O insurances ranges from
$700–1000 per year depending on
your years in the industry
and product you will provide.
And for Primerica,
I remember it’s around $300 – 400 per year
so almost half price.
I believe it’s because they only offer
term life insurance where
there is a lesser chance of being sued.
And the other thing I like about Primerica
is their simple
yet very effective financial concepts.
Like how do you explain
the difference RRSP, TFSA.
How do we explain how much we need
for retirement in 3 sentences?
Even today, I still used these concepts
and presentations to help my clients.
The last thing I like about Primerica
is it’s very flexible,
Before I joined Primerica,
I tried to join different companies
or agencies but failed.
They either wanted advisor with tons of
Industry experience or
they want full time advisors.
On the other hand,
Primerica allows advisors to work part time
and pretty much they welcome people
with no experience.
Now being too flexible is not always a
good idea either which I talked about it later.
But hey at least I got in and
got to improve my money knowledge.
Alright let’s talk about the
bad side about Primerica.
First is the price competitiveness.
Because Primerica only focuses on
term insurance products,
you might think oh then it’s must be very cheap.
Which is not the case.
Let’s say I am a 30 male non smoker and I want
to buy 1 million coverage for the next 20 years.
With Primerica, it’s roughly $65 / month
whereas the other major insurance companies
like Canada Life and Manulife, it’s around $55.
That’s almost 15% price difference
while providing the same features.
And the older you get,
the bigger the price gap between
Primerica and other companies.
Primerica Agents might say,
oh because we have a terminal illness rider
included already.
Meaning If you are diagnosed
with a terminal illness,
you can get 40% of the dead benefit paid out first.
But based on what I remembered;
you have to be diagnosed with less than
6 months to live to qualify for that.
The second will be the product competitiveness.
They can only offer term life insurance.
There are 2 problems with this.
One being the term insurance product in
Primerica product is a one-way product.
You cannot convert it into permeant coverage
because there isn’t one available.
And back in my days,
there is no living benefits like
disability or critical illness.
So What happens if some one is sick
but not dead yet?
And second is Their philosophy of
“buy term and invest the difference”
isn’t necessarily a bad one in a perfect world.
But what if the client needs coverage after
they turn age 65 because they might still
have a mortgage or other debt?
Or What if the client wants to leave
a legacy to the kids tax-free?
Or what if you want to find other tax shelter
buckets because you maximize your TFSAs,
RRSPs already.
Or business owners who want to have a
corporate owned insurance with a saving
feature so they can invest their
retained income with tax optimization?
And unfortunately,
Term insurance won’t help you
with any of those scenarios.
Lastly, we need to talk about their branding.
Client has to trust you and your company
before they want to purchase insurance from you.
because Primerica tends to have a
negative reputation which I talk more about later.
As an advisor,
you often start the battle with a disadvantage.
Back then, even people want to buy insurance,
after they heard the word Primerica they back off.
And especially nowadays,
people can literally google everything.
And guess what will show up when you
type the word Primerica?
Now I have to say there are
lots of good advisors in Primerica,
but I believe they have to put
extra amount of time and work
to convince a client to go with them
And now, I know you have been waiting for this.
The UGLY part and also
the reason I decide to leave Primerica.
Recruitment
Pretty much the first day I joined Primerica,
the manager told me I had 3 things to sell,
insurance, investment and recruitment.
We were told to recruit anybody.
The reason recruiting people
under your team was so popular was
because once they closed a deal,
you got a cut too.
So the more people you recruit,
the more passive income you have!
Now personally I am not against the concept
and I have a team of advisors too.
Just because like McDonalds or Starbucks
which uses a franchise model,
recruitment is the way to expand
but you need to do it the right way.
what I don’t like about Primerica’s
recruitment model is there is no qualification.
As long as you live and breathe,
pretty much anyone can join
the company and let the system filter.
Either you work as an engineer
or work in the subway,
you can join Primerica which makes
for a lot of unqualified agents who think
they can make a huge amount of money
in a small amount of time.
Sure the 1st year might be ok because you will
have your family and friends to support you.
But because of the price
and product competitiveness,
all the things I mentioned above,
Primerica loses the edge over its competition.
And therefore the 2nd year is a lot
tougher to close business and by the end,
they start to fail and start
calling the company a scam.
But Primerica, in my opinion,
doesn’t really care.
As long as there are more people
joining than people leaving,
they will be profitable.
And back in the days when I joined,
I have to pay $100 as an admin fee to process
my application which I find weird.
Then after I got my license,
I have to pay 30 bucks a month
in order to use their online tools.
I felt like I joined a gym membership
which I never used.
I wonder if this is still the case now,
Can anyone tell me if this is still true?
Please let me in the comments below.
2nd is the compensation and that’s something
I didn’t know until I left Primerica.
Because Primerica is 100% commission,
you only get paid on what you close.
And how you get compensated
depends on which level you are in.
Back in my day, there were 5 levels.
For the entry level,
you get a super low percentage of the
commission either on insurance
or investment with Primerica.
As you level up,
the percentage getter higher and higher.
There are a couple of reasons
they set it up like that.
Let’s say if you are in level 3 and you
have a new advisor who is in level 1,
then you get the difference in
between as your override bonus.
Therefore, you want to level up as fast as
possible in Primerica because you don’t
get compensate well in level 1.
On the other hand,
for lots of insurance companies
or brokage firms,
the compensation is already 2x or 3x
even if you are in level 1 as well.
So it makes a huge difference.
Also, one of the biggest problems was
how the promotions worked.
In order to get promoted in Primerica,
it depends on how many people you recruit.
That’s right!
It’s not based on how many clients you
helped or how much business you
brought to the company.
I remember in order to be
promoted to level 2,
you need to recruit three Level 1s.
And if you want to get promoted to level 3,
you need to recruit 9 people to your team.
And for level 4 and level 5
you need to hit both the production
and number of recruitment in your team.
And the worst part,
there was a deadline of 2 years
to fulfill your quota.
Otherwise you have to completely restart.
So what I saw was a lot of
unqualified advisors recruit their parents,
their kids, and their friends to get promoted.
Some of the so-called senior advisors
never helped a single client.
And because I focused on helping clients and
only want to bring good advisors to the team,
at the end,
I was still only a level 1
for the 2 years I was there.
The other thing that I didn’t like
was the environment.
Even though the people I worked with
were super nice and super helpful,
I felt they are little bit too biased –
They always said Whole Life Insurance
was bad,
Universal life was evil and that people got
deceived by the big insurance companies.
But when I studied further,
I realized a lot of healthy or money smart
people use permanent life insurance
to protect their wealth.
And the further I studied,
the more features I discovered
that term insurance didn’t cover.
I tried to ask my Primerica colleagues about
this but no one would give me a logical answer.
Because they can only receive one way training
and no products to compare.
Also every time,
when they compared the
downside of permanent insurance,
I realized they were using 20 or 30 years old
Permeant life products when there was
way more flexibility and
more features in the plan right now.
The other thing is that,
90% of Primerica Advisor has other jobs and
could not commit fully to the industry.
This was because they didn’t make enough
money due to the structure!
Not only did it mean that they cannot provide
the same service compared someone
who worked in the industry full time,
but also the turnover rate was so high which
leaves a very negative image to the client.
Alright in conclusion:
I will say Primerica is just like a University.
It has a lot of good concepts and it helps
young or inexperienced advisors to
sharpen their knowledge and skills.
However just like university, a lot of times,
what we learned there
didn’t always apply to the real world.
And as mentioned, Primerica only has
limited products and
they don’t have the best rate.
Not only that, the commission of the sales
is lower that it cannot be sustained which
forced a lot of agents to work other jobs.
So you either have to do a lot of business
or you need to start recruiting tons of people.
Either way,
it doesn’t have a good long-term
impact on your career.
Therefore, to answer the ultimate question:
is it worth it working at Primerica?
I will say I do not regret that I joined Primerica.
In fact,
I am glad I did in my beginning of my career.
So I was able to learn and
get a foundation of knowledge.
And it definitely helped to
become the advisor I am today!
However, can I have the
same achievement if I had stayed on?
I am sure the answer is
obvious given all the reasons above!
Alright, that’s what I have for today!
But hey,
I really want to know what’s your take on it.
Especially if you are still in Primerica
as an advisor or as a client.
Let me know in the bottom below!
This is Thomas,
and I will see you in the next video!