Monday, May 10, 2010

Response to Anonymous Comment

I was recently recruited by Primerica and went to the initial meeting and received an invitation to a second meeting. The recruiter told me to do as much research I needed to to make sure I wanted to pursue this, and being a journalism major I had no problem digging to find out what Primerica is really all about.

My sister was also recruited a couple years back and she saw right through the recruiter and decided to pass on the "opportunity." One of my mom's friends was also recruited and she went through with it but never made any profit.

The fact of the matter is Primerica charges too much for the "training" because a background check and "insurance" would not cost that much. That's how they make the majority of their money. If you do the math (quoted from [the company charged him $199 instead of $99, you can do the math with either number, though. The results are still startling]):

"For every 10 people you recruit, 6 will quit and 4 will pursue their life license. Of the 4 that pursue 1 will fail the test and quit, 1 will pass the exam and never sell insurance, 1 will pass, do 2-3 transactions and quit and 1 will become a "success." So, for every 10 recruits, 7 do nothing with the $199.

Let's do a little bit of math for the month of February. 16,500 divided by 10 is 1650. There are 1650 groups of 10. According to the "formula of success" 7 out of the 10 will not use the $199 they paid. 1650 multiplied by 7 is 11,550 people who did not use their $199 fee for licensing. 11,550 times $199 is $2,298,450. The goal for March is 30,000 recruits. 30,000 divided by 10 is 3000 times 7 is 21,000 times $199 is $4,179,000. In one month off of recruits alone Primerica made enough to pay the "guy on the CD who makes 2 Million Dollars a year" his money for the year and some change."

Is there money to be made in Primerica? Probably. Are their claims on how easy the money will come misleading? Absolutely. I personally will not be working for Primerica because as my sister put it, who is a college graduate and already banking over $55,000 a year out of college, "Anything you have to pay to do is a scam." Do your research, and keep in mind that a blogger with their own experience with Primerica is more credible than a business rep who is paid to write good things about the company.

Also, the Better Business Bureau lists Primerica with only 2,000 employees. Where'd the other 98,000 go?

For being a journalist, you seem to be an amateur since you clearly don't know what you are talking about. Prior to August 2007, a new representative would have to pay $199 to cover the cost of the state licensing fee for life insurance. Individual states charge anywhere from $300 to $500 to obtain this license, which covers pre-licensing school, books for the school, background check, licensing fees, and other fees that the state may charge. I join the company in 2004 and paid $199 to join this business. The remaining costs was covered by the company. After the company convention in August 2007, the company provided two options for new representatives. They may pay either the $199 or $99 plus $25/month. Whether the new recruit pays $199 or $99, this money goes to the state insurance department.

What does the $99 plus $25/month cover? It covers everything that I previously said and much more. With the $99 plus $25/month option, it encourages new representatives to be engaged in their business and get full access of the company support system. Besides covering the cost of a life insurance license, it also covers the cost of a securities license, which cost almost $500. A new representative must qualify for District Leader in order for the company to pay for the securities license. Other requirements apply.

The $25/month part is a full online subscription to the company support system called Primerica Online or POL. POL has tons of information and resources to help representatives build their business. There are training videos, life insurance exam simulator, Morningstar program (for securities license reps only), help desk, virtual baseshop, contest information, legal department, and a downloadable software called Call Atlanta. Call Atlanta is a financial tool where the representative can complete the financial needs analysis. It is also a place where client information is stored. In short, think of it as an online office manager. If representatives have a mobile device that supports Windows 6.1 or higher, they can make transactions without the need of having paper applications. For example, life insurance applications can be filled out on the electronic device and it can either be transmitted wirelessly to the home office or through their computer that has Call Atlanta installed. Is the company making money from the $25/month subscription? They probably are. Then again, it does cost lots of money to keep these servers running and keeping them secured. How much? I really don't know since I don't work for the company. The company works for me. The $25/month subscription can be canceled anytime, but speaking from experience, it will be very difficult to build without it. To me, its worth the money to have it if you are serious about building a business. You also get your own Primerica web page that you can show to the public.

If you were to hire you own office manager or have legal questions or need to manage your clients or employees, it would cost you lot more than $25/month. Primerica Online is the one-stop resource center for all Primerica representatives.

All these expenses that a Primerica representative pays can be a tax write-off. Primerica reps that earn income of at least $600 will get a 1099-MISC form. Therefore, they pay taxes at the end of the year because they are consider business owners or self-employed.

As for your sister who says "anything you have to pay to do is a scam" is somewhat right and somewhat wrong. It all depends on the situation. In business, you have to pay to get it started. Is that a scam? In real estate, you have to pay to get your real estate license. Is that a scam? With Primerica, you have to pay $99 to get your life license and your securities license. Is that a scam? The answer is no. However if you pay to join a company and someone earn a profit from it, then that falls in classification of a pyramid scheme. In Primerica, the company or the representative does not earn a profit by recruiting. As I said before, the $99 is paid to the state.

As for the 2000 employees you mention, there are also over 100,000 licensed representatives. The 100,000 licensed representatives are not employees. They are independent business contractors. Employees are hired by the company. Representatives voluntarily join the company for the opportunity to build a business.

Your sister may be earning $55,000/year, but what if she gets fired from that job? Is your sister really worth $55,000/year? If she trains someone, does she get compensated? I have the opportunity to earn unlimited income at Primerica. The harder I work, the more I will earn. I also have the opportunity to earn overrides. Every time someone I train gets licensed and helps a family, he or she gets paid full commissions base on their sales level. Every time they get paid, I get paid too. That is an override. Anyway, your sister made her choice on working for someone else than to work for herself.

Is there money to be made in Primerica? The answer is yes. Primerica serves middle income families. Majority of middle income families are struggling with debt, have no savings plan, and either have no life insurance or lack adequate coverage. Primerica helps families in all these areas. As big as Primerica is, the company has less than 2% market share. There's a tremendous opportunity for anyone to build a business in Primerica. They just got to get to work.

If you are a journalist, you should visit the company's headquarters in Duluth, GA to get all the information you need. The editor of spent nearly a year investigating the company and wrote a statement on his findings on the website.

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