Primerica Financial Services is a financial services company that operates using the MLM business model. Representatives can earn by either selling various financial products and services such as life insurance, mutual funds, variable annuities, segregated funds, loans, long-term care insurance, and prepaid legal services, or by actively recruiting more representatives to do the same and Earn a commission on your sales. Using an MLM business model to sell financial services might draw some criticism, but so far, it has paid off well for Primerica. But if you’re reading this article, then I suspect the bigger question is whether it will also pay off for you.
The company
Primerica, headquartered in Duluth, Georgia, is a subsidiary of Citigroup, which alone should alleviate concerns about whether this particular MLM is a legitimate business. Citigroup simply has too much at stake to risk becoming involved with a dubious subsidiary to tarnish its name. Primerica has gotten a lot of flak for aggressively recruiting just about anyone to become a representative (a danger of using an MLM business format), but the products and services sold under the Primerica name are, by all accounts, legitimate.
The Compensation Plan
For this review, let’s focus on Primerica’s best-known product, term life insurance, which is sold under Primerica Life Insurance Company. This is probably why a large number of agents turn to Primerica Financial Services to begin with.
Entry to Primerica costs $199, which is refundable upon passing a licensing exam. The commission on the sale of term life insurance is 25%. The rep who closes that sale gets the lion’s share of the commission, but has to split the rest among the people in their upline.
As with any business structured around multi-level marketing, you are paid commissions based on your level of sales. Selling term life insurance policies on your own is an unpredictable proposition. So, to improve their chances of earning significant income from Primerica on a regular basis, the savvy rep turns to hiring new reps so he or she can receive a bonus from their sales. The more people you recruit (who actually close the sales), the less actual personal sales you have to make to receive higher income.
The verdict
Primerica gets a thumbs up for being a legitimate MLM business. But like any other MLM business opportunity, success only comes to those who have the right set of skills to keep their business growing until residual income kicks in. Primerica’s idea of ​​recruiting the average Joe into his sales force is great in theory, but one occasionally runs into trouble when recruiting standards are thrown out of whack. Still, it seems to be working well enough for both Primerica and dedicated reps willing to put in the necessary time and work.
If you’re considering a Primerica business opportunity, take a close look at your “warm market” of family and friends (who will likely be your first prospects). Then honestly ask yourself if they would be willing and able to actively sell term life insurance. Even with the proper training, some people just aren’t willing to get into that sort of thing.
In short, you have to ask yourself if you could replicate the success of people higher up in the company. That is a question only you can honestly answer. If you have any doubts about being able to maintain the level of hiring necessary for this particular MLM business opportunity to continue to grow, then keep your options open. There are thousands of business opportunities that could be more suitable for you.