Primerica Financial Services is a financial services company operating under the MLM business model. Representatives can earn by 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 their sales . Using an MLM business model to sell financial services may draw some criticism, but so far it has paid off for Primerica. But if you’re reading this article, I suspect the bigger question is whether it will pay off for you, too.
Primerica, which is headquartered in Duluth, Georgia, is a subsidiary of Citigroup, which in itself should allay concerns about whether this particular MLM is a legit company. Citigroup simply has too much at stake to risk involvement in a dodgy subsidiary to tarnish its name. Primerica has received a lot of criticism 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 in all likelihood legitimate.
The Compensation Plan
For this review, let’s focus on Primerica’s best-known product, term life insurance, which is sold under the Primerica Life Insurance Company. This is probably why a large number of agents enter Primerica Financial Services to begin with.
Entry to Primerica costs $199, which is refundable after passing a licensing exam. The commission on the sale of term life insurance policies is 25%. The rep who closes the sale gets most of the commission, but must distribute the rest to the people in their upline.
As with any business structured around multilevel marketing, you will receive commissions based on your level of sales. Selling term life insurance yourself is a hit. So to increase your chances of regular income from Primerica, the savvy rep turns to recruiting new reps so that he or she can receive an override from their sales. The more people you recruit (who actually sell), the fewer personal sales you have to make to receive a higher income.
Primerica is praised for being a legit MLM company. But like any other MLM business opportunity, success only comes to those who have the right skills to grow their business until an income emerges. Primerica’s idea of recruiting the average Joe for their sales team is great in theory, but occasionally runs into trouble when hiring standards are completely thrown out the window. Still, it seems to work well enough for both Primerica and the dedicated representatives who are willing to put in the time and work.
If you are considering a business opportunity on Primerica, take a close look at your “warm market” of family and friends (who will likely be your first potential recruits). Then honestly ask yourself if they would be willing and able to actively sell term life insurance. Even with proper training, some people just aren’t inclined to get into that sort of thing.
Basically, you have to ask yourself if you can replicate the success of people higher up in the company. That’s a question only you can honestly answer. If you are unsure whether you can sustain the level of recruiting required to grow this particular MLM business opportunity, keep your options open. There are thousands of business opportunities that might be a better fit for you.