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The chances are high that you’re reading this article because you’re considering using Primerica for investment, insurance, or financial services. In this article, we’ll help you know more about Primerica. We’ll also cover 3 cases you should know about Primerica.
What is Primerica?
As stated on its website, Primerica is a company that provides investment, insurance, and some other financial services to families.
The company claims to be a leading financial services provider with over 2000 employees on its LinkedIn page. It also says that it has 130,000 licensed independent representatives that are trained to provide financial education and sell highly valuable financial services and products to clients.
Primerica has existed for over 40 years, and it’s currently listed on the floor of the New York Stock Exchange market. You can find it on the exchange platform with the symbol “PRI.”
In addition to the product and services the company offers, Primerica claims that they also provide entrepreneurial-minded individuals with an opportunity to create a resilient financial services business for themselves.
The company has its headquarter in Duluth, Georgia, where it offers its services throughout the territories of Canada, the US, Puerto Rico, and Guam.
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How Primerica Works
The company’s main product is Term Life Insurance. Primerica provides term life insurance at a price that’s quite affordable to most families.
Primerica gives additional life insurance policies that cover 10, 15, 20, 25, 30, and 35 years. However, the options you’ll be presented with are dependent on your age.
Some Primerica policies only give policyholders a fixed amount on premium for a specific period.
Primerica agents are recruited via fellow voluntary agents. The recruiting agents automatically become the upline of the new member.
To become successful, it’s important that you ensure that your downline recruits more; this may increase the amount you’re paid a commission.
At the top of the ladder is the great upline. This is an individual that was recruited directly by the company. The great upline will always motivate those below for recruitment because there are awesome perks for doing so.
Also, Primerica aims at reprogramming the minds of its agents to see possibilities and opportunities that exist in selling its products. It just takes a few minutes for an average person to consider joining the MLM.
After joining the company, Uplines train downlines on strategies they need to do the following:
- Recruit downlines
- Handle rejections
- Follow prospects
- Sell insurance policies
- The company’s culture
Agents working for Primerica are not paid any fixed amount as their pay is directly commensurate to their efforts.
As such, any agent that wants to increase their income from Primerica has to invest time and effort into personal development.
However, it’s not all as rosy as it seems with Primerica having its own scandals hovering across its head. There’s also the general perspective that the payment system schemes in favor of some specific persons and the company’s executive.
While we can’t independently verify the truth in any of these allegations, we’d like to give you an exposé on three interesting cases involving Primerica that you should acquaint yourself with.
Understanding How Primerica Has Been Under Investigation
The scandals involving Primerica are pretty much. However, here are the ones that catch out attention;
Class Action Lawsuit
On the 13th of August 2021, Judith Palmer, Jayson.D.Palmer and Jeniffer Whiterspoon initiated a Class Action Lawsuit against Primerica Life Insurance company for the Insurance company’s refusal to fulfill its legally contractual obligation.
The plaintiff filed the case as they are of the opinion that the MLM Insurance company knowingly and repeatedly refused to notify policyholders on changes to its contract as stipulated by California’s law.
The lawsuit ensued when Primerica terminated the Insurance contract of the plaintiff because they did not pay the required monthly premium.
Understanding the Case
The plaintiff also pointed out that the public policy undergirding the designation notice requirements suggested that Insurance companies must make all efforts to prevent an instance where a policyholder will lose his/her policy because of a premium payment that it mistakenly missed. The plaintiff submitted before the judge that this public policy undergirding should’ve been taken into account as it’s one that’s supported by the Governor of California, the Insurance Commissioner, and the Department of Insurance. As such, the plaintiff maintained the position that California laws are designed to give Insurance policyholders maximum warning before any action is taken as a punishment.
The highly worrisome aspect of this case for all premium buyers and agents is the plaintiff’s belief that Primerica deliberately refused to send sufficient notices to everyone whose Insurance contract was terminated because they didn’t make payment on time. This is particularly worrisome as it paints the company as one that deliberately seeks to dupe its customers.
What’s Next
This case hasn’t come to a conclusion yet. The interesting questions we’ll be keeping tabs on, in this case, are these;
- Whether Primerica is bound by the Designation Notice Requirement issued but not renewed before the stipulated effective date.
- Whether Primerica satisfied or has failed to satisfy the Designation Notice Requirement
- Whether the statutes have been violated by Primerica’s refusal to adhere to the stipulation of the Designation Notice Requirement
- Whether the company breached the stipulations of its contract
- Whether the company failed to conform with required regulations by terminating the contract without notifying the third party or requiring the clients to introduce a third party that can be easily accessible for verification.
For more information about this class action suit, click on this link.
ARELLANO v. PRIMERICA LIFE INSURANCE COMPANY CO
This is a suit brought by Mrs. Arellano against the popular Primerica Life Insurance company.
In the Arellano v. Primerica Life Insurance Company case, the insured purchased a disability policy from Primerica Life Insurance company. This policy is guaranteed to give the insurer $1,500 a month in the case of a total disability.
The insured was later diagnosed with a concussion from falling into a pothole at a shopping mall. This concussion affected the insurer’s capacity to work at his place of work, which is a call center with over 100 employees.
The Claim
The insured claimed that he also suffered a major psychiatric breakdown from the accident as she attempted to commit suicide. She was later admitted to a hospital for an estimated six months period.
Due to these issues, Primerica Life Insurance paid the insured for a 12-months period, after which the company terminated the insurance contract based on a neuropsychological evaluation that’s inconclusive.
The insured was hospitalized again after seven weeks for suicidal ideation. A year into the suit, the insurer initiated the disability claim contract again.
However, the insured approached the court on the basis that;
- Primerica Life Insurance Company acted in bad faith by terminating the claims on the policy
- Refusing to recognize the diagnosis from registered medical professionals
The Condition
But, Primerica, through its defendants, claims that the grounds for insurance have been nullified on the basis that the Arellanos did not satisfy all grounds for coverage. Some of the conditions Primerica believed the insured failed to meet are the following;
Condition 1: Primerica explained that all insured should ensure that their application is “true and complete.” However, the company believes that the application was largely made up of false information.
Although Mrs. Arellano maintained that she submitted only accurate pieces of information, Primerica itself does not have a shred of evidence to maintain its position. Since there’s no admissible evidence to prove their point, the defense was ruled out. On this matter, the only evidence shown by the defendant is the insurance application.
However, the law governing the state has expressly stated that an insurance application cannot be admitted in a civil case. The only exception to this is where the application was attached to the policy when during the delivery process.
As a judgment, the jury awarded the insured the following;
- $1.29 million as compensation for humiliation, anxiety, inconvenience, and emotional stress caused by the termination of the contract
- Punitive damage of $2.5 million against the insurer
- A fine of $2.5 million in punitive damages against the insurer claims department
- $243,000 in future policy benefits, unpaid policy benefits, and the reduction of life enjoyment potentials
SEC Investigation
The Security and Exchange Commission is investigating PFSI, a broker-dealer that’s affiliated with Primerica Life Insurance Company, Primerica Financial Services Home Mortgages, and Primerica Financial Services.
PFSI is being investigated for failing to supervise one of the registered representatives of the company who sold unregistered securities in a Ponzi scheme. SEC detected that these sales were not reflected on PFSI’s books, neither did PFSI approve sales. During the said period, the registered representative (Dearborn) sold over 14 offerings. Through these illegal sales, hierarchies raised over $27 million from unsuspecting investors. When this ponzi ended in 1994, investors lost all the money they invested in the scheme.
With this infraction, Dearborn was deemed to have violated Section 10 (b) of the exchange act and Section 17 (a) of the securities act.
For making misrepresentations of material facts to company investors, the offerer’s financial condition, and the risk involved in the investment, Dearborn has violated Section 10( b ) of the Exchange Act and Rule.
Should You Join Primerica?
In my opinion, joining Primerica is neither a good nor a bad decision as it all depends on your capacity, will, and skill in following through with the intricacies of the business.
However, before making a decision to join, it’s imperative that you acquaint yourself with what it takes to succeed on MLM. Here are some things to consider before investing with Primerica;
Reasons not to invest with Primerica
As said earlier, Primerica is an MLM company, which means they recruit people on a commission basis to sell their services. This is typical to most MLMs and it doesn’t feel genuine to most people setting up an account with them.
Anytime you approach an agent to invest, you’re likely going to be dealing with someone who’s trained at selling you a product with the expectation of getting paid a commission. As such, the seller is often preoccupied with selling you the product while refusing to tell you the truth. The chances are high that you’ll be tricked into paying far above what you need.
Also, many professionals are of the opinion that co-workers and leaders lack the professional experience to properly invest and guarantee quality. Rather, employees focus more on recruiting than actually developing and selling their products.
Reasons to invest with Primerica.
Enough of the negatives; let’s elucidate a bit on the positive.
It’s pretty easy to get started with Primerica as the company will handle your cash and invest it as desired.
One of the biggest perks of investing with this company is that they’ve made the entire process of purchasing their investments as simple as possible. You don’t have to log online regularly or contact any of their agents after purchasing their financial products.
Also, their website is very easy to use. A simple click on your wanted feature will automatically guide you to your desired information. Financial investments made in their Roth IRA can easily be tracked to know how your fund is performing.
Primerica may also its partners an opportunity to make money to help their families when they bring in other team members. A commission may be paid to agents and their uplines when they bring in new downlines.
Please note that we receive a comment that this may not happen. Here’s the note: Agents and Advisors are not paid any commissions for recruiting or licensing new agents. Commissions and overrides are only paid when business is conducted with a client. We have not confirmed whether this is the case, so feel free to do your own due diligence.
Ultimately, the decision to join Primerica is up to you. While there are rumors that Primerica runs a scam, the company has an impressive A+ rating, so all of these are important to note.
In Summary
Primerica is an MLM company that’s publicly traded on the floor of the NYSE. However, most MLM company’s are notorious for scams and unfair practices. In this article, we’re taking a look at some common cases we think will help guide your perspective about using the company or not.